Dubai Holding, a global investment holding company, today announced the financial results for its business group, Dubai Holding Commercial Operations Group (DHCOG), for the year ended 31 December 2014.
DHCOG had another strong year in 2014 and reported total revenue up 14% to AED 13.2 billion (2013: AED 11.6 billion) with recurring revenues up 8% to AED 7.6 billion (2013: AED 6.9 billion). DHCOG saw steady progress with improved revenue, gross profits and gross margins. Normalised EBITDA grew by 25% to AED 6.9 billion (2013: AED 5.5 billion) and net profit rose 42% to AED 4.7 billion (2013: AED 3.3 billion).
Commenting on DHCOG’s results, Mohammad Abdulla Al Gergawi, Chairman of Dubai Holding, said: "2014 marks 10th year of Dubai Holding’s operation and was another strong financial year. 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."
Continuing, Al Gergawi said: "Central to Dubai’s diversification is the plan to turn it into a global powerhouse for innovation and the Group is investing heavily in support of this aim. We have a number of programmes already running and our AED 4.5 billion bundle of initiatives will help drive forward Dubai’s agenda to become the innovation capital for more than 2 billion people who live in the region around us. We are fully committed to Dubai’s long-term economic growth."
Ahmad Bin Byat, Chief Executive Officer of Dubai Holding, said; "DHCOG goes from strength to strength. Our business units continue to outperform our expectations and we have robust growth strategies to keep this momentum going. In addition to our focus on innovation, we continue to drive the development of the Islamic Economy, with a special focus on the development of the Halal Food sector, the growth of the SME sector and the long-term success of the tourism industry. Overall we continue to be well positioned for the year ahead and are pleased to report an encouraging start to the 2015 year."
DHCOG continues to strengthen its balance sheet along with its liquidity and cash position. At the end of 2014, DHCOG’s debt-to-equity ratio stood at 0.52 (2013: 0.61).
Operational highlights In 2014, Dubai Holding completed 10 years of operations, contributing significantly to the UAE’s economy by driving the growth of a diverse range of sectors including ICT, media and entertainment, industrial, education, life sciences, design, tourism and real estate. Dubai Holding continues to play an influential role in delivering on Dubai’s long-term growth strategy and initiatives such as Tourism Vision 2020, Dubai Smart City, Innovation Hub and Capital of Islamic Economy.
Dubai Holding’s commercial operations arm, DHCOG, operates in 24 countries through four leading business units. These are: TECOM Investments (TECOM), which manages business parks in multiple sectors; Jumeirah Group ("Jumeirah"), a global luxury hotel company; Dubai Properties Group (DPG), one of the largest fully integrated real estate and community development businesses; and Emirates International Telecommunications (EIT), which runs a portfolio of regional and international technology and telecommunications assets.
TECOM continues to play an instrumental role in transforming Dubai’s economy. In 2014, TECOM took up the mandate to drive Dubai’s efforts to become a global engine for innovation, media and content and to integrate the industries it operates in within the UAE national innovation system. This will be achieved through pioneering projects including business innovation incubators, financial funds and smart laboratories.
TECOM’s 11 industry-specific business parks employ over 74,000 individuals through 4,658 businesses based there. TECOM also offers 400 educational programmes.
TECOM’s Dubai Design District (d3), which aims to create a sustainable, innovative and thriving ecosystem for the region’s design industry, continues to develop Phase 1 as planned and is expected to be ready to welcome new business partners very soon. During 2014, d3 attracted 161 local and international design companies.
TECOM’s Dubai Industrial City announced the launch of its Halal Cluster, a dedicated platform for companies and investors operating Halal businesses in the UAE, an initiative that is in line with Dubai’s strategy to become the global centre for the Islamic Economy.
SmartCity Dubai, the international business parks development arm, made significant progress in 2014. SmartCity Malta occupancy levels stand over 72%, while SmartCity Kochi’s first phase was substantially completed, with new agreements to develop an additional 4 million square feet of space.
During 2014, TECOM saw an increase in commercial office revenues due to continued high levels of occupancy of over 95% in its established business parks, increased occupancy and higher rents in newer business parks, such as; Dubai Outsource Zone, Dubai Studio City, International Media Production Zone and DuBiotech.
Jumeirah continued to expand its geographical footprint during the year. Jumeirah signed multiple new management contracts including: four in China - Guangzhou, Nanjing, Wuhan and Haikou; one in both Goa in India and Mauritius, as well as additional hotels in Dubai. Jumeirah also launched a new contemporary hotel brand, ‘Venu’ and completed refurbishments at its hotels, Emirates Towers and Mina A’Salam.
The construction of Madinat Jumeirah Phase IV, the 430-room resort development opposite Burj Al Arab, is on track for completion in 2016. At the same time, designs for expanding facilities at its flagship hotel, Burj Al Arab, as well as the new phase of the Jumeirah Beach Hotel are also under finalisation.
Jumeirah operates 22 hotels, resorts and residences in the Middle East, Europe and Asia including over 200 food and beverage outlets, employing over 14,000 staff.
Jumeirah performed well during 2014 with stable occupancy levels in Dubai and increased levels across the international portfolio, especially in Frankfurt and Spain.
In 2014, DPG established Dubai Properties (DP) to focus solely on delivering an integrated, end-to-end project development solution for the Group. Since then, DP has launched new residential and commercial projects across Dubai including the second phase of Mudon Villas; and Manazel Al Khor and Dubai Wharf as part of its destination, Culture Village.
DPG has a residential leasing portfolio of 25,000 units and a commercial portfolio of 2.8 million square feet. Masat, DPG’s portfolio management company that manages the residential, commercial and retail leasing portfolios in DPG’s districts and destinations, saw leasing revenues rise across its residential portfolio due to rate increases for new customers across Al Khail Gate, Shorooq and Ghoroob which continued to maintain occupancy levels of 99%. The commercial portfolio also saw strong leasing revenue growth from both the release of new inventory, especially Bay Avenue, as well as average occupancy levels reaching 80% in retail spaces such as The Walk, which has undergone major enhancements to cater to increasing visitor numbers.
Ejadah, DPG’s asset management arm, also witnessed strong performance and its revenues continue to see double digit growth.
EIT’s portfolio companies demonstrated stable overall results. ‘du’ has continued to show strong growth in customers, revenue and profits while both Tunisie Telecom and Go showed growth in mobile customer base and market share. Forthnet recorded positive growth of its customer base specifically for its triple play offering. There were no investment exits during the year, and the Group will continue to seek and assess viable divestment opportunities.