Dubai: DIFC Investments (DIFCI), the investment arm of the Dubai International Financial Centre (DIFC), yesterday announced that its losses in 2010 were 52 per cent less than those of 2009.

DIFCI incurred a loss of $272 million (Dh999 million) in 2010 compared to $562.3 million in 2009.

"Amidst the backdrop of the ongoing global downturn, DIFC continued to be confronted with a demanding business environment in 2010," said Ahmad Humaid Al Tayer, Chairman of DIFCI, in a statement to Nasdaq Dubai yesterday. "Nevertheless, as compared with 2009, improvements have been achieved in DIFCI's financial performance for 2010."

DIFC Investments booked a loss on the fair value of investment properties of $374.3 million in 2010 compared with $438.6 million a year ago, according to the DIFCI statement. It had a gain of $5 million from investments in joint ventures and associates after a loss of $85.3 million a year ago.

Cost savings

The company made significant progress in cost savings last year as its general and administration expenses declined 31 per cent from $152.23 million in 2009 to $105.31 million in 2010.

While its net finance costs declined from $98.46 million in 2009 to $68.58 million in 2010, the company rescheduled interest and principal repayment on two $500 million loans owed to the Dubai government last year.

Attributing the bulk of the losses last year to devaluation of its real estate investment, the company said the losses were within its expectations.

"When releasing the financials for 2009, we were cognisant that the economic environment in 2010 would be unsettled and pose challenges to DIFCI's business," Al Tayer said.

The company yesterday reported that in 2010 it undertook prudent management of its investment portfolio by divesting selective non-strategic investments while retaining key assets in the portfolio.

Going forward, the company plans to make selective disinvestments.

"The year 2011 will see the execution of selected disinvestment plans and expects further value improvement in various funds and assets, which would also depend on the resurgence of global markets," the DIFCI statement said.

DIFC Investments owns and operates office buildings in the DIFC, which is home to the regional offices of banks including Citigroup Inc., Standard Chartered and Morgan Stanley.

DIFC Investments expects to complete the sale of business software company SmartStream Technologies Group Plc. this year, the company said yesterday. It bought the company in 2007.

DIFCI also plans to complete the sale of high-end Kuwaiti fashion retailer Villa Moda in 2011, having indicated its intention to sell the company in 2009.