Dubai: Delivery of properties and better earnings have helped Dubai Holding Commercial Operations Group (DHCOG), to return to profitability, recovering from a loss of Dh23.5 billion in 2009 to a profits of Dh127 million in 2010, the company said in a statement.
Dubai Holding, one of the emirate's large conglomerates owned by the government, went through a restructuring process in 2009, when it realigned some of its companies under more focused verticals to reduce costs.
All of its three core subsidiaries, Jumeirah Group (Jumeirah), Dubai Properties Group (DPG), and Tecom Investments, performed well.
The company reported a 43 per cent increase in revenues to Dh13.5 billion, up from Dh9.4 billion 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.
Ahmad 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."
Earnings before interest, tax, debts and amortisation (EBITDA), for the year was Dh7.6 billion, a considerable improvement compared to EBITDA of Dh1.1 billion in 2009. DHCOG also improved its operating performance by achieving an operating profit of Dh6.5 billion for 2010, against an operating loss of Dh3 billion in 2009. DHCOG achieved a net profit of Dh127 million compared with an Dh23.5 billion loss in 2009.
Jumeirah saw a sizeable improvement in both operating and net profit in 2010. Net profits increased by 58 per cent, while operating profits increased by 30 per cent.
DPG revenues increased by 175 per cent as a result of an increase in land and property handovers. The overall occupancy levels increased to an average of 72 per cent 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 Dh1.8 billion, 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 per cent of total revenues, thanks to resilient occupancy rates. In 2010, Tecom's Emirates International Telecommunications LLC telecom subsidiary produced strong results. Both Tunisie Telecom and GO delivered substantial dividends to shareholders with GO achieving higher revenues due to a 36 per cent increase in its TV subscribers. Du's market share grew significantly to 40 per cent, translating to an increase in revenues of 32 per cent.
"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," Bin Byat said.
