Dubai Investments (DI) expects to post a 5 per cent increase in first-quarter profit and better full-year net profit than last year as the diversified investment company grows its various businesses, its chief executive said yesterday.
“We see there is some improvement happening in the market, with that improvement we are optimistic and positive that we will show better results by year end compared to 2015,” said Khalid bin Kalban.
Full year-net profit last year fell 16 per cent to Dh1.1 billion from Dh1.3bn a year earlier because of the one-off gain of Dh472 million from the sale of a 66 per cent stake in the pharmaceuticals company Globalpharma to France’s Sanofi in 2014.
The sovereign wealth fund Investment Corporation of Dubai is the largest shareholder in DI, with an 11.5 per cent stake. DI’s 41 businesses range from manufacturing to financial assets, but its biggest income comes from real estate. Its flagship property is the Dubai Investments Park mixed-use project.
DI is planning a Dh2.5bn mixed-used Mirdif Hills project, for which it plans to borrow about Dh1.2bn from local and regional banks, said Mr bin Kalban. The loan for the mixed use project will most probably be secured before June.
The project includes residential units, a hospital, a hotel and retail outlets.
Mr bin Kalban is not worried about the slowdown in the property market, which has softened compared with last year.
The company is expanding outside the UAE for the first time with a project in Saudi Arabia. Riyadh Investment Park, a 2bn Saudi riyals (Dh1.95bn) mixed-use project in the Saudi capital scheduled to be finished in three to five years.
DI is also looking to launch similar projects in Morocco and Angola, but is waiting for government approval on these projects.
DI is also seeking to expand its portfolio with acquisitions in two sectors: health care and education.
“For diversification we need to go into sectors where we have not invested yet,” said Mr bin Kalban. “There are opportunities and these two sectors [health care and education] are stable and their reward is reasonable.”
DI, which had planned to float one of its units this year, has postponed plans for the initial public offering because prevailing market conditions and weak investor sentiment for flotations.
The company is targeting assets of Dh20bn by 2020, compared with Dh15.5bn at the end of last year.
The company’s shares fell 2.4 per cent yesterday but were up 6.2 per cent for the week and are up 18.3 per cent for the year to date. They last traded at Dh2.39 apiece, and have ranged over the past year between a high of Dh3.20 in October and a low of Dh1.48 in late January.
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