Dubai Holding Commercial Operations Group profit grows 41 per cent

Dubai Holding Commercial Operations Group (DHCOG), the non-financial arm of the government-owned conglomerate Dubai Holding, recorded a 41.7 per cent increase in net profit last year as all lines of its business grew.

The group, which owns the Jumeirah hotel chain, Tecom Investments business parks, the developer Dubai Properties Group and some telecoms interests, said its profit increased to Dh4.6 billion last year from Dh3.3bn in 2013.

Total revenue grew 13.6 per cent to Dh13.2bn last year from Dh11.6bn in 2013. Recurring revenue was up 8.5 per cent to almost Dh7.5bn from Dh6.9bn in 2013. Revenue from property and land sales rose 21 per cent to Dh5.6bn from Dh4.6bn in 2013.

“DHCOG is delivering consistently growing recurring-revenue streams, which enables us to take advantage of emerging opportunities in further support of Dubai’s diversification strategy,” said Mohammed Al Gergawi, the chairman of Dubai Holding.

The firm has a number of programmes and Dh4.5bn in initiatives to help meet its goal of turning Dubai into an innovation capital, he said.

Ahmad bin Byat, the chief executive of Dubai Holding, said that “in addition to our focus on innovation, we continue to drive the development of the Islamic economy, the growth of the SME sector and the long-term success of the tourism industry”.

Total equity rose 17.6 per cent to Dh21bn last year from Dh17.9bn a year earlier, lowering the firm’s debt-to-equity ratio to 0.52 from 0.61 in 2013. The firm, which repaid a €750 million (Dh2.98 billion) bond in January last year and prepaid an amortized loan in April, has its major upcoming debt maturity in February 2017, when a £500m bond is due.

The firm plans this year to start work on the first phase of Mall of the World, which is estimated to have a total cost of US$6.8bn and will be built over 10 years.

Tecom Investments contributed to the growth in the property portfolio, with commercial office occupancy in its business parks rising to 89.1 per cent, the firm said without giving a comparative figure for 2013.

“Tecom continues to play an instrumental role in transforming Dubai’s economy,” the company said. “This will be achieved through pioneering projects including business innovation incubators, financial funds and smart laboratories.”

The Jumeirah Group, which operates 22 hotels across the Middle East, Europe and Asia, is on track to complete by next year the construction of Madinat Jumeirah phase IV, the 430-room resort development opposite the firm’s flagship hotel, the Burj Al Arab.

Room revenues at the group rose 3.1 per cent last year, with occupancy levels of 76.5 per cent and revenue per available room growing by 2.8 per cent. Last year the group signed new management contracts in countries such as China, India and Mauritius, along with additional hotels in Dubai.

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