DHCOG Returns to Profit in 2010 Group records AED 127m net profit; Revenues increase 43%

DUBAI, 14 April 2011: Dubai Holding Commercial Operations Group LLC (DHCOG), which has three core business subsidiaries, Jumeirah Group (Jumeirah), Dubai Properties Group (DPG), and TECOM Investments (TECOM), today announced its audited financial results for the full year ended December 31, 2010.

Financial Highlights

• Total Revenue AED 13.5 billion
• Operating Profit AED 6.5 billion1
• Net Profit AED 127 million2
• EBITDA reached AED 7.6 billion3

DHCOG’s 43% increase in revenues to AED 13.5Bn, up from AED 9.4Bn in 2009, was driven by the handover of completed projects in the Built to Sell portfolio of Dubai Properties Group in communities such as Business Bay, and Dubailand. In addition, the recurring and solid revenue streams achieved by DHCOG’s other subsidiaries were in line with the previous year’s performances.

EBITDA, for the year was AED 7.6Bn3, a considerable improvement compared to EBITDA of AED 1.1Bn3 in 2009. DHCOG also improved its operating performance by achieving an Operating Profit of AED 6.5Bn4 for 2010, against an Operating Loss of (0.02)3 in 2009. DHCOG achieved a net profit of AED 127m compared with an AED (23.5) Bn loss in 2009.

1 Excluding Impairments
2 Including Impairments
3 The comparison is based on reported 2009 amounts which excludes impairments
4 Operating Profit/loss excluding impairment charges

Jumeirah saw a sizeable improvement in both operating and net profit in 2010. Net profits increased by 58%, while operating profits increased by 30%.

DPG revenues increased by 175% as a result of an increase in land and property handovers. The overall occupancy levels increased to an average of 72% following the launch of new communities such as Shorooq, Ghoorob and Layan. These levels are almost double than those recorded in 2009.

TECOM’s 2010 revenues of AED 1.8bn, excluding the telecom portfolio revenues, were mainly driven by its recurring rental income from its business parks, where lease rates held up strongly in comparison with the wider commercial real estate market in Dubai. The largest contributors to revenues in 2010 were the business parks, providing 85% of total revenues, thanks to resilient occupancy rates. In 2010, TECOM’s Emirates International Telecommunications LLC (EIT) telecom subsidiary produced strong results. Both Tunisie Telecom and GO delivered substantial dividends to shareholders with GO achieving higher revenues due to a 36% increase in its TV subscribers. du’s market share grew significantly to 40%, translating to an increase in revenues of 32%.

Ahmed Bin Byat, Chief Executive Officer of Dubai Holding said:

DHCOG’s strong performance in 2010 is a result of the turnaround strategy implemented in response to the changing business environment. This strategy was based on the realignment of the businesses, focusing on sustainable revenues and core competencies of each subsidiary, and streamlining operations and cost base.
We believe that DHCOG is focused on its core objectives, and its subsidiaries are all well positioned, each within their key sector, to continue to provide a solid performance both operationally and financially.
We also anticipate the performance of our businesses will respond positively to the improvement in Dubai’s economic situation. Led by forecasted steady GDP growth rate, the global rebound in trade driven by the Eastern Markets, a strong oil price and stability of the country, we expect to see all lines of business perform steadily.
Future Outlook

In 2011 DHCOG will actively engage with the market, repay its upcoming bond maturity, and continue to focus on reducing exposure to non-core assets.

Jumeirah’s ambitious global diversification strategy will accelerate with hotels and resorts forecast to be open or under development in the next two years, with a minimum of six coming to market in 2011. Meanwhile, additional operational and cost strategies implemented by TECOM will bring further long term benefits during 2011. And DPG will continue to leverage its leasing portfolio and deliver further projects in 2011, including the Built to Sell community Remraam, Bay Avenue, a retail destination at The Executive Towers, The Beach Club at Jumeirah Beach Residence and a further phase of the Villa project.