Dubai Holding records 60% jump in net profits to Dh204 million in 2011

Dubai: Dubai Holding Commercial Operations Group LLC (DHCOG) reported a 60 per cent jump in net profits to Dh204 million in 2011, up from Dh127 million recorded in 2010.

It's recurring revenues increased by 7 per cent to Dh6 billion, while total revenues stood at Dh8.8 billion, a company statement said. Total assets, at the end of December 2011 stood at Dh97.4 billion while its total debt decrease byDh1.24 billion.

"Debt to asset ratio improved to 0.13 while debt to equity ratio improves to 0.93," the company said in a statement.

DHCOG, a Dubai Government investment arm, comprises four business subsidiaries: Jumeirah Group, Dubai Properties Group (DPG), TECOM Investments (TECOM) and Emirates International Telecommunications (EIT).

Ahmad Bin Byat, Chief Executive Officer of Dubai Holding, said: "The positive results of 2011 demonstrate DHCOG's resilience and strong business fundamentals across the portfolio. Despite continued challenging economic conditions globally, 2011 proved to be a good year for DHCOG. The deleveraging of our debt commitments has been one of the highlights of 2011 and will continue to be our priority in the years to come.

"In line with our strategy of strengthening the recurring income streams, properties and land sales represented only 31.6 per cent of our total revenue in 2011, compared to 58.1 per cent in 2010."

DHCOG's urrent liabilities decreased from Dh31.2 billion in 2010 to Dh26.6 billion in 2011, down 15 per cent due to a decline in trade payables, customer advances and contractor liabilities. DHCOG concluded the year with a strong cash balance of Dh2.3 billion, an increase of 50.5 per cent compared to Dh1.5 billion in 2010.

Bin Byat commented: "The Group is well positioned, with long-term recurring revenues and a diverse portfolio of income-generating assets, to build on the healthy performance of our underlying businesses. We have a robust balance sheet, which provides us with the flexibility to support our businesses in delivering strong performance and revenues."

Total debt decreased by Dh1.2 billion to Dh12.8 billion in 2011, of which Dh2.4 billion is short- term borrowing.

DHCOG deleveraged its debt commitments, by paying down the CHF 250 million bonds in July 2011 through cash generated from operations and from sales of non-core assets. It further paid down $500 million bonds which matured in February 2012. Repayment of the bonds, along with consistent and strong operating performance, triggered positive rating actions by Fitch Ratings and Moody's Investors Service, both of which placed DHCOG on a stable outlook in February 2012.

Jumeirah Group's performance was driven by the strong occupancy rate of 78 per cent, above industry average rates. Jumeirah recorded a 5 per cent increase in its Revenue Per Available Room (RevPAR), compared to 2010. Consequently, Jumeirah achieved strong growth of 9 per cent in its room revenue as well as 7 per cent in food and beverages revenue.

DPG significantly contributed to the Group's revenue through its growing recurring revenues from leasing, land sales and facility management businesses, as well as from the handover of some of its projects. Its leasing portfolio saw strong increase in occupancy rates of up to 90 per cent in residential; while the facilities and property management business grew by 22.1 per cent.

TECOM's revenue for 2011 was driven by strong occupancy rates across its mature business parks and a low churn rate of its partners. It continues to enjoy high occupancy rates averaging 88% in Dubai Internet City, Dubai Knowledge Village and Dubai Media City, which represent superior levels compared to Dubai's average commercial occupancy rate of 56%.

EIT had a successful partial exit from Axiom Telecom at an attractive valuation. Despite a challenging political environment, Tunisie Telecom delivered a solid performance, while du captured 46% mobile users market share in the UAE.