Dubai’s ICD reports Dh60.8 billion net profits on Dh310 billion revenue

Investment Corporation of Dubai, an investment arm of the Government of Dubai, reported a 68 percent jump in net profits to a new record of Dh60.8 billion on Dh310.2 billion in revenue for the year ended 31 December 2023.

This growth has been backed with strong growth reported by the Emirates Group that includes the world’s largest international passenger carrier Emirates Airline and its ground handling and ticketing arm Dubai National Air Travel Agency (Dnata) that recently reported a 71 percent jump in net profits exceeding Dh18.7 billion (US$5.1 billion) in 2023-24 financial year ending March 31 2024, compared to Dh11 billion (US$3 billion) recorded the previous year. This is a new profit record for Emirates Group.

Emirates Group revenue increased 15 percent to Dh137.3 billion (US$7.4 billion) compared to Dh119.8bn (US$32.6bn) in 2022-23 financial year, driven by strong customer demand across its businesses. At the end of the financial year, Emirates Group had a strong cash balance of Dh47.1 billion (US$12.4 billion). Emirates Group declared a Dh4 billion (US$1.1 billion dividend to its shareholder – the Government of Dubai through Investment Corporation of Dubai (ICD).

Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates airline and Group, said, “Throughout the year, we saw high demand for air transport and travel related services around the world, and because we were able to move quickly to deliver what customers want, we achieved tremendous results. We are reaping the benefit of years of non-stop investments in our products and services, in building strong partnerships, and in the capabilities of our talented people.”

“Both Emirates and Dnata have forged successful business models leveraging Dubai’s unique advantages, in turn generating enormous value for Dubai and the communities they serve around the world. The Group’s excellent financial standing today places us in a strong position for future growth and success. It enables us to invest to deliver even better products, services, and more value to our customers and stakeholders.”

The ICD Group’s total assets reached a new record of Dh1.32 trillion, up 12 per cent or Dh145.3 billion, and liabilities Dh1.01 trillion, up 11 per cent, primarily pushed by the 16 per cent asset growth in banking. Non-banking operations grew their assets up by 5 per cent whilst reducing their indebtedness. The Group’s share of Equity increased by Dh21.4 billion, rising to a record of Dh237.9 billion.

“Economic growth in the UAE is broad based, led by robust activity in the tourism, construction, manufacturing, and financial services sectors. Foreign demand for real estate, increased bilateral and multilateral ties, and the UAE’s safe haven status continue to drive rapid growth in housing prices and an increase in rents, while adding to ample domestic liquidity,” according to Ali Al Eyd, Head of the International Monetary Fund team that visited the UAE two weeks ago.

“Impacts from geopolitical tensions have been contained thus far, while the authorities delivered a rapid response to address the recent flooding episode. Overall real GDP is projected to grow by around 4.0 percent in 2024, and average inflation is expected to remain contained close to 2 percent.”

Its revenue of Dh310.2 billion is 16 percent or Dh42.8 billion up from 2022, driven primarily by significantly higher passenger traffic in transportation as well as the asset growth and higher interest rates in banking and financial services sectors. The net profit attributable to the equity holder was Dh50.3 billion, up 69 per cent.

A number of Dubai Government-owned businesses are part of ICD, including Emirates Airline and Group, Emirates NBD, Ethra Dubai, Wasl Properties, among others.

Oil & Gas revenues declined as global oil prices retreated from their 2022 peak. Overall revenues grew faster than operational costs, boosting margins.

“The Group reported a record Net Profit of Dh60.8 billion, up 68 per cent with an increase of Dh24.6 billion predominantly from transportation, up 119 per cent, and banking and financial services, up 69 per cent, lifting their net profit to new highs. The strong momentum in real estate and hospitality sectors contributed to the record profits posted by many businesses in the Group. Oil and gas and aluminium production generated good profits, albeit lower than last year,” it said in a statement.

Mohammed Ibrahim Al Shaibani, Managing Director of ICD, said, ”ICD announced today its best-ever performance, a truly exceptional achievement as the Group posted, for the third consecutive year, tremendous growth and reached an unparalleled level of revenue and profitability, primarily driven by airlines and banking sectors.

“The strong regional economic momentum and increased competitiveness of our businesses created an effect of scale resulting in higher margins and performance of our portfolio companies operating in the transportation, banking and financial services, and other segments.

“Overall, the improved liquidity, asset quality, and the reduced leverage in non-banking operations further strengthened the Group’s financial position; assets and equity reached new records.

“As we continue to pursue growth and diversification, I am confident our businesses’ resilience and strength as well as ICD’s investment strategy will help us fulfil our mandate to maximise value for Dubai.

ICD was established in May 2006 by Decree (11) of 2006 and mandated with the consolidation and management of the Government of Dubai’s portfolio of commercial companies and investments. ICD also provides financial and strategic oversight to portfolio companies to maximise value for the long-term benefit of the Emirate of Dubai.

ICD’s portfolio comprises some of Dubai’s most recognised 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 of Dubai.