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Wed 27 Jan 2010 11:30 PM

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Dubai Investments sees strong Q1 profits led by core business units

CEO said that company will 'definitely make a profit in Q1'.

Dubai Investments sees strong Q1 profits led by core business units
POSITIVE OUTLOOK: Dubai Investments expects to post a profit in Q1 of 2010 due to the stronger performance of its core business units. (Getty Images)

Dubai Investments Co, which swung to profitability at the end of 2009, expects to post a profit in the first quarter on stronger performance for its core business units, its chief executive said on Wednesday.

Speaking to Reuters, Khalid bin Kalban said: "2010 looks very positive for Dubai Investments."

Declining to be more specific, he said: "We will definitely make a profit (in Q1)."

He added that the company's industrial, real estate and financial units were driving growth.

The company posted a fourth quarter net profit of $38.39 million, versus a loss of $23.6 million in 2008, it said on Wednesday.

Full year net profit attributable to shareholders declined around 40 percent to $262.18 million against $430.1 million in 2008.

Kalban told Reuters earlier in January he expected 2010 to be a difficult year for Dubai's real estate sector and sees room for further correction with major projects scheduled to open in 2010 adding to surplus supply.

Dubai Investments, which derives its revenue from the UAE and other Gulf Arab countries, attributed a decline in revenues to economic slowdown as a result of the financial crisis affecting the real estate sector.

The emirate of Dubai, which owns stakes in major local developers, received about $20 billion from neighbouring Abu Dhabi and the UAE central bank in 2009 to help firms meet their obligations.

The emirate's once booming real estate sector - which boasts the world's tallest tower and artificial islands shaped as palm fronds - came to a grinding halt at the end of 2008 as developers slowed or cancelled projects.

Property prices have fallen as much as 60 percent since their peak in the third quarter of 2008.

Dubai Investments competes with developers Emaar Properties and Deyaar in Dubai's residential sector, and launched its first residential project, Ritaj, in 2006.

The group's assets were up by 6 percent to $4.12 billion in 2009, the company said on Wednesday.

Dubai's sovereign wealth fund Investment Corporation of Dubai has a stake in the company.

Dubai Investments' shares closed 3.5 percent higher at $0.24 per share earlier on Wednesday outperforming the market which rose 0.6 percent. (Reuters)