Flydubai and Emirates woes negate positive banking and oil and gas performance
Dubai fund ICD posts flat H1 profits on weak airline performance
The Investment Corporation of Dubai (ICD), the emirate’s sovereign wealth fund with strategic holdings including airlines Emirates, flydubai, a stake in Emirates Global Aluminium and lender Emirates NBD, posted flat profits for the first half of 2017. A sharp drop in transportation income cancelled out gains elsewhere for the fund.
Net profit for equity holders in the 6 months ending June 30 rose 0.6 per cent to Dh8.26 billion compared with Dh8.21bn in the same period last year, the fund said in a statement on Nasdaq Dubai. Revenue rose 13.1 per cent to Dh93.25bn from Dh82.48bn.
Profit before tax in the fund’s transportation segment – which account for more than half of total revenues – plunged 52 per cent to Dh1.1bn for the period compared with last year, dragged lower by Emirates’ woes in the early part of the year.
The airline took a hit during the first months of 2017 amid tough operating conditions, which included travel restrictions on US routes, a ban on laptops and subsequent restrictions on larger electronic devices due to terrorism concerns.
Emirates has subsequently recovered, reporting a 77 per cent year-on-year increase in profits for the six months to the end of September.
But losses at fellow ICD subsidiary flydubai increased 59 per cent to Dh142.5 million for the six months to the end of June, attributable to higher fuel costs.
“The portfolio of ICD continued to deliver strong operating and financial results and steady growth,” said Mohammed Al Shaibani, executive director and chief executive of ICD, in an emailed statement.
“ICD remains focused on expanding its capabilities and investing in opportunities that will support long-term growth and contribute to the prosperity of Dubai.”
Pre-tax profits at ICD’s oil and gas services rose 38 per cent year-on-year to Dh1.8bn thanks to a recovery in markets. Banking and financial services profits rose 4 per cent to Dh5bn, thanks to a similar rise in profitability for the period from Emirates NBD.