Dubai Investments expects double in Q3 profit

PROFIT BOOST: Dubai Investments Co expects profit in the third quarter to more than double. (Getty Images)

Dubai Investments Co, the UAE's largest diversified holding firm by market value, expects profit in the third quarter to more than double on the private placement of one of its units and property sales.

Chief Executive Khalid bin Kalban told Reuters late on Sunday the group was planning to expand its real estate business by buying land in Saudi Arabia and said its glass unit planned acquisitions in the kingdom and the United Arab Emirates.

"We expect profit for the third quarter to be between 650 million to 700 million dirhams," Kalban said in an interview.

The firm, whose business ranges from glass-making to pharmaceuticals, made a net profit of 268 million dirhams ($148.8 million) in the corresponding period last year.

Dubai Investments said on Sept 23 it had raised 400 million dirhams ($108.9 million) by selling a 40 percent stake in its private equity arm M'Sharie in a private placement.

"When we bought the real estate units we knew there would be increase in prices and now we are profit-taking," Kalban said, adding that real estate would contribute about 300 million dirhams to its third quarter net income.

Property sales in the second quarter surged almost four-fold to 776.5 million dirhams compared to the year-earlier period and costs rose 43.8 percent to 948.1 million dirhams in the same period.

"In the medium to long-term there is upside potential in the real estate market," Kalban said.

"Until 2010 we are in the safe side with our focus on the real estate business as we have presold the assets, but have not booked the profits."

Kalban said Dubai investments was also looking to finalise a deal with Saudi firms to buy land in the country by year-end to develop real estate at an initial investment of about 500 million riyals ($133.3 million).

Helped by a more than fivefold rise in oil prices since 2002, the world's top oil-exporting region has witnessed a boom in the real estate and financial services sectors.

Dubai Investments has 40 subsidiaries, including Emirates Building Systems, which sells steel structures, and Dubai Investments Real Estate Co, which is building office towers, industrial complexes and residential units.

The group bought a 10 percent stake in a new Saudi steel firm to tap into growth in the world's largest oil exporter in September and Kalban said its glass unit was looking to tie up two deals in the kingdom and one in the UAE by the first quarter of next year.

Shares of Dubai Investments were down 0.33 percent at 08:44 GMT, underperforming the market, which rose 1.78 percent.

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