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So, is the glass half full?
Dubai Investments posted a 25 increase over its total assets, but it also showed a significant drop in profits over last year’s results. So is the glass half full, or half empty? It’s a question of perspective.
May 3, 2009 1:17 by Dana El Baltaji
Dubai Investments posted a net profit of AED269 million, and a consolidated income of AED831 million for the first quarter of 2009, ending March 31. It reported a 25 percent increase over its total assets reported on March 31, 2008, from AED 11.47 billion to AED14.36 billion.
“Dubai Investments has maintained its track record of good results even in these difficult times” said Khalid Bin Kalban, managing director and CEO of Dubai Investments said in a statement. “These results exceeded our expectations and we anticipate the positive trend to continue in the future. We are now targeting new geographical markets to generate additional revenue streams which would enable us to absorb some of the effects of the downturn”
In spite of the company’s growth, however, Dubai Investments posted a 47 percent drop in share prices, from AED0.15 per share this time last year to AED0.08 per share on Sunday.
Last year, Dubai Investment posted a net profit of AED488.28 million for the first quarter of 2008, AED219.28 higher than 2009’s figure.
Kalban announced on Wednesday the company’s profits in 2009 are reasonable considering the market conditions, adding that due to the slump in the property market, income from the company’s real estate ventures have dropped by 86 percent.
“The main constraints came from the real estate arm,” Kalban said. Profits from the company’s real estate projects fell to AED15 million, a AED95 million drop over the same period last year.
The Dubai property market began slowing in September 2008, when the global financial crisis hit the region. A report published by Swiss-bank UBS predicts prices will drop by 70 percent from their peak in the fourth quarter of 2008 before they begin to stabilize.
The bank expects prices to fall to AED500-800 per square foot from AED1,850 per square foot, the report said.