x Abu Dhabi, UAESaturday 29 July 2017

Dubai Holding proves to be sweet spot of emirate's recovery

The Dubai conglomerate that owns the Jumeirah Group and Tecom has boosted profits and reduced its debt, helped by the emirate's rebounding tourism and retail sectors.

The Dubai conglomerate that owns the Jumeirah Group and Tecom has boosted profits and reduced its debt, helped by the emirate's rebounding tourism and retail sectors.

Dubai Holding Commercial Operations Group (DHCOG), which also owns Dubai Properties Group, reported that its annual net profit surged 44 per cent to Dh324.3 million (US$88.2m) as it reduced its cost base and increased margins.

But the results also included a Dh2.4 billion impairment related to its property assets and part of its telecommunications portfolio.

Total revenues including land and property sales reached Dh8.8bn last year.

"Dubai Holding is in the sweet spot of the Dubai recovery in terms of retail, tourism and hospitality sales," said Ghassan Chehayeb, a credit analyst at Exotix.

"Recurring revenues are up, impairments are down and they seem to be managing their liquidity well."

The group is one of three large Dubai conglomerates seeking to reduce their debts after the financial crisis, which took a heavy toll on the emirate's property holdings as well as many of its international investments bought when asset values were at their peak.

"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," said the chief executive, Ahmad bin Byat.

The results come amid improving sentiment towards some Dubai Inc companies triggered in part by a rise in visitor numbers to the emirate and increased footfall in shopping malls.

That encouraged Dubai to return to the international bond market for the first time in almost a year this week with a planned $1bn sukuk sale.

Dubai Holding expects to profit further from the expanding tourism industry and said it anticipated room revenues to improve at the Jumeirah Group, which operates the Burj Al Arab hotel.

Jumeirah is planning to open at least seven hotels this year in locations including London and Baku.

 

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