Dubai’s ICD reports Dh14.8b 1H net profits

Investment Corporation of Dubai (ICD), the investment arm of Dubai Government, reported a 1000 percent growth in net profits exceeding Dh14.8 billion in the first half of 2022, on Dh121.1 billion revenues reported in the same period that saw its assets value exceeding Dh1.14 trillion by the end of the first half of this year that reflects the strong growth witnessed by major businesses in Dubai. In the first half of 2021, ICD reported net profits of Dh1.49 billion.

“The ICD’s first-half revenues registered a 61 percent increase while its profits grew more than 10 times compared to the same period last year,” a statement said.

ICD group portfolio includes some of the most sought after businesses in the region, including Emirates Airline, Dnata, FlyDubai, Dubai Aerospace Enterprises (DAE), Emirates NBD Bank Group, Commercial Bank of Dubai, Borse Dubai, Dubai Islamic Bank, National Bonds, Emirates National Oil Co. (ENOC), Dubai Multi-Commodities Centre (DMCC), Dubai Duty Free, Emaar Properties, Ithra Dubai, IDC Brookfield, Dubai Investments, Dubai World Trade Centre, Atlantis the Palm, Mandarin Oriental, New York, Dubal Holding, Emirates Global Aluminum (EGA) and Ducab, among others.

Among these, the four aviation businesses – Emirates Airline, Danata, FlyDubai and DAE – together make up 25 percent of ICD’s portfolio while its banking assets represent a further 23 percent of the portfolio.

Emirates Group, which includes Emirates Airline and Dnata, recently reported net profitsof Dh4.2 billion (US$1.2 billion), a record half-year performance, and a turnaround of almost Dh10 billion from its Dh5.7 billion (US$ 1.6 billion) loss for the same period last year.

Emirates Group also reported an EBITDA of Dh15.3 billion (US$4.2 billion), a marked improvement from Dh5.6 billion (US$ 1.5 billion) during the same period last year, illustrating its strong operating profitability.

Emirates Group revenue was Dh56.3 billion (US$15.3 billion) for the first six months of 2022-23, up 128 percent from Dh24.7 billion (US$6.7 billion) last year. This was driven by the strong demand for air transport across the world with the further easing and removal of pandemic-related travel restrictions.

Although Emirates Group’s financial year starts from April 1 every year, its financial results between January 1 and June 30 are calculated within ICD’s half-yearly report. Similarly all group company’s financial results are added to the ICD’s financial report.

Emaar Properties earlier reported a 66 per cent jump in its earnings before interest, taxes, depreciation, and amortisation (EBITDA) to Dh6.11 billion ($1.66 billion) compared to H1 2021, as a result of higher revenue with improving margins and continued cost optimisation. Led by the strong performance of its core property development business, and complemented by growing recurring revenue operations, Emaar recorded a robust first half revenue of Dh13.57 billion ($3.69 billion), a growth of 10 per cent compared to H1 2021.

The successful launch of properties by Emaar, both in the UAE and international markets, and focus on sales of under-construction projects resulted in Emaar achieving record first half group property sales of Dh17.67 billion ($4.81 billion), an increase of 5 per cent compared to the H1 2021 sales of Dh16.84 billion ($4.58 billion).

The group reported record first-half net profits of Dh14.8 billion, up more than ten times over the same period last year, with transportation returning to profitability in a significant turnaround, Oil & Gas improving its profits by 190 percent, and the other segment increasing by 129 percent buoyed by record earnings from aluminium production and strong fundamentals in the real estate and hospitality sectors.

The results attributable to the equity holder were net profits of Dh12.2 billion. The group’s share of equity increased by 4.8 percent to Dh199.8 billion.

ICD’s assets resumed their growth and reached a record Dh1.13 trillion on the back of a much higher level of activity overall. The group’s liabilities were up marginally to Dh887.5 billion, while borrowings and lease liabilities slightly declined.

ICD’s Board, chaired by Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, Chairman of The Executive Council of Dubai, Chairman of ICD, and in the presence of His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai and Vice-Chairman of ICD, approved ICD’s consolidated financial results for the six months ended 30 June 2022.

Sheikh Hamdan bin Mohammed said: “The 61 percent growth in ICD’s revenues and a more than ten times increase in its profits during the first half of 2022, despite the global economic slowdown and uncertainty worldwide, reflects the resilience and robustness of Dubai’s economy and the prudence of its fiscal policies. The exceptional results are a manifestation of HH Sheikh Mohammed bin Rashid’s vision to ensure that Dubai remains at the forefront of championing global economic recovery.”

The group, mandated with the management of the Government of Dubai’s portfolio of commercial companies and investments, witnessed a significant surge in travel and tourism activities, reflected in the growth in Transportation and Other segments, while its Oil & Gas revenues received a sizeable boost on the back of substantially higher international oil prices.

Mohammed Ibrahim Al Shaibani, Managing Director of ICD, said: “ICD’s record revenues, earnings and assets for the first half of 2022 are an impressive achievement as the expansion of our businesses accelerated despite the global economic slowdown. Benefiting from favourable local and regional economic momentum, our companies redeployed operational capacity whilst maintaining a strong discipline on costs. Despite the challenging global economic outlook, ICD maintains a strong balance sheet, is confident of the growth potential of its businesses and will remain cautious and selective in how it deploys new capital whilst exploring new investment opportunities.”

Business analysts say the efficient handling of the COVID-19 pandemic and the successful hosting of Expo 2022 has helped Dubai to attract massive international tourists, High-Net Worth Individuals (HNWIs), foreign investment that helped the economy to rebound, that helped ICD’s business units to report record growth. Their continued success will help Dubai Government to reduce its debt obligations in the coming years.

ICD, the principal investment arm of the Government of Dubai, was established in May 2006 and mandated with the consolidation and management of the Government of Dubai’s portfolio of commercial companies and investments. ICD was also assigned the provision of strategic oversight to portfolio companies through the development and implementation of effective corporate governance policies, and sound investment strategies. ICD is focused on maximizing stakeholder value for the long-term benefit of the emirate.

ICD’s portfolio comprises some of Dubai’s most recognized companies, and represents a cross-section of vital economic sectors that the Government of Dubai has deemed strategic for the continued development and growth of the Emirate. The sectors include financial services, transportation, energy and industry, real estate and construction, hospitality and leisure, retail, and other holdings. In addition, ICD has embarked on a disciplined and sustainable strategy of global investments, which are synergistic with its existing portfolio, to extend Dubai’s presence and expertise into international markets.