AED 2.1bn Dubai Holding’s commercial operations’ net profit in H1 2014
AED 2.1bn Dubai Holding’s commercial operations’ net profit in H1 2014September 7, 2014
- Al Gergawi: Our solid earnings highlight the strength of our financial position and the success of our strategy
- Al Gergawi: We continue to invest in the sectors vital to Dubai’s economic development
- Bin Byat: While we enhance the Group’s earnings we look for new and innovative opportunities aimed at further developing the fields we operate in
Dubai Holding, a global investment holding company, today announced the financial results of its business group, Dubai Holding Commercial Operations Group (‘DHCOG’), for the first half of 2014, ending 30th June 2014.
DHCOG continued its strong performance in all of its business lines, which are geared towards supporting the Emirate’s strategy to diversify its income sources and strengthen its position as a leading international financial, economic and tourist hub.
During the first six months of the year, DHCOG’s revenue were up to AED 5.6 bn and EBITDA was at AED 2.8 bn. DHCOG’s net profits reached AED 2.1 bn during the period.
Commenting on DHCOG’s H1 results, H.E. Mohammad Abdulla Al Gergawi, Chairman of Dubai Holding, said: “Our ability to continue to generate solid earnings highlights both the strength of our financial position and the success of our strategy that is focused on investing in sectors vital to Dubai’s economic development. We are confident that our financial position will strengthen further once construction starts in the strategic projects we announced recently.”
H.E. Al Gergawi affirmed Dubai Holding’s commitment to supporting Dubai’s vision and added: “Our strategy follows the growth trajectory of the UAE and Dubai in particular, and we are focused on enhancing the efforts to build a sustainable, knowledge-based economy.”
Also commenting on DHCOG’s H1 2014 financial results, Ahmad Bin Byat, Chief Executive Officer of Dubai Holding, said: “Our solid performance during the first half of 2014, comes as a direct result of our team’s dedication to enhance the Group’s earnings and maintain a regular cash flow, while continuing to look for new and innovative opportunities aimed at further developing the fields we operate in. We are confident that our performance will continue to improve over the second half of the year and we expect our annual net profits to exceed AED 4 bn.”
H1 2014 Operational Highlights
Dubai Holding operates in 24 countries through four leading businesses. These are: Jumeirah Group, a global luxury hotel company; TECOM Investments, which manages businesses parks in multiple sectors; Dubai Properties Group, one of the largest fully integrated real estate and community development businesses in Dubai; and Emirates International Telecommunications, which runs a portfolio of regional and international technology and telecommunications assets.
During the first half of 2014, Jumeirah Group expanded its international portfolio and signed an agreement to operate a luxury resort, currently being developed on the Mauritius Islands and expected to be launched in 2018. Jumeirah has also signed an agreement to operate 169 luxury serviced residences, in addition to the 207-room luxury Jumeirah Guangzhou Hotel, which is already nearing completion.
As part of the Group’s international expansion plans, Jumeirah is currently studying opportunities abroad in Mecca, Madina, Riyadh, Jeddah and Khobar in Saudi Arabia as well as in Qatar and Bahrain. Jumeirah has recently opened a hotel in Kuwait. Hotels in Oman, China and Bali are scheduled to open soon.
Earlier this year, His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President, Prime Minister and Ruler of Dubai, had approved the fifth phase of the Jumeirah Beach Resort expansion plans, which is valued AED 1.5 bn and expected to be completed by 2018.
On the other hand, TECOM Investments continued to attract local, regional and international institutions operating in various sectors, including education, logistics, industries, media, research, science and other fields. During the first half of 2014, TECOM’s Dubai Design District issued more than 140 licences to local and international design companies.
During the same period, Dubai Industrial City announced the launch of its Halal Cluster, a dedicated platform for companies and investors operating halal businesses in the UAE. This initiative is in line with Dubai’s strategy to become the global centre for Islamic economy.
Amongst the projects launched by TECOM Business Parks during the first six months of the year, is the Butterfly development. The two-tower retail and commercial project is located in Al Sufouh, offering 255,000 sq. ft. of first-class facilities and infrastructure, tailored office space, retail facilities, a spacious outdoor plaza and advanced security systems.
Meanwhile, Dubai Properties Group (DPG) launched new projects during the first six months of 2014 introducing almost 800 residential apartments. These include the units within its luxury residential project Manazel Al Khor, which is located in DPG’s creek-side Culture Village destination. They also include the units in Remraam and Mudon’s second phase of luxury villas which was launched after the strong demand in Phase one. Dubai Properties Group has also completed all works on Bay Square project and started delivering the units.
During this period, Dubai Properties Group has also undertaken major enhancements to its iconic tourist attraction, The Walk at JBR, which will pave the way for increased attractions for growing visitor numbers.
In May 2014, TECOM Investments and DPG introduced new commercial incentive packages to encourage hotel and leisure industry investors to enter the three and four-star hotel segment. This initiative came as part of Dubai Holding’s strategy to further support the development of Dubai’s tourism sector and in particular the objectives outlined in the Emirate’s Tourism Vision 2020. The total number of rooms estimated from Dubai Holding’s 40 plots is between 7,500 and 8,500 rooms.
At the beginning of the second half of 2014, Dubai Holding announced the launch of Mall of the World, a 48 million sq. ft., climate-controlled development located by Sheikh Zayed Road. The project will house the largest shopping mall in the world with an area of 8 million sq. ft., in addition to the world’s largest theme park, which will be covered by a glass dome that will be open during the winter months.
Additional districts within the project will include a wellness dedicated zone, a cultural celebration district as well as a wide range of hospitality options comprising 20,000 hotel rooms. Once completed, the City is projected to become a year-round destination, welcoming around 180 million visitors annually.
The Mall of the World is developed by Dubai Holding as part of its efforts to support Dubai’s vision to become a leading global business, tourism and culture hub. Dubai Holding is currently appointing specialised consultants and expects to commence work on the first phase of the project during the first quarter of 2015.
During the first six months of 2014, the Group focused its efforts on lowering its debt profile and maintaining an optimum debt to equity ratio. To that end, DHCOG utilised available liquidity to repay its EUR 750 million bond in January, and voluntarily repaid the entire outstanding principal USD 319.3 million of an amortising facility originally maturing on December 31, 2015.