Jebel Ali Free Zone makes profit of AED139.7m ($38.04m) in 2010, versus AED286.7m in previous year
Full-year profit at Jebel Ali
Free Zone (JAFZA), a unit of state-owned conglomerate Dubai
World more than halved, and the firm said it was
eyeing options to refinance an Islamic bond due in 2012.
In a statement accompanying its financial results, JAFZA's
chairman said the company was considering refinancing options
for its AED7.5bn ($2.04bn) Islamic bond, or
sukuk, its only outstanding debt.
"The establishment commenced work on the liability
management and is currently exploring various refinancing
options," Chairman Hisham Abdullah Al Shirawi said in a
statement, referring to the sukuk.
The dirham-denominated sukuk is not guaranteed by the
government of Dubai and bondholders are predominately local
The free zone, located on the outskirts of Dubai along the
main highway which connects the city with neighbouring Abu
Dhabi, is owned by Dubai World, which earlier this year
finalised an agreement with its lenders to restructure some $25
billion in debt.
Part of the agreement includes asset sales.
JAFZA made a profit of AED139.7m ($38.04m) in 2010, its financial statements showed, compared with
AED286.7m in the previous year.
Impairments of investment properties hit AED198.3m, weighing on profitability, against AED28.4m in 2009, the statement said.
Total impairments stood at AED247m.
The need to refinance debts among Dubai's state-linked
entities is expected with upcoming maturities totalling about
$30bn to 2012.
The emirate overstretched itself building palm-shaped
islands and other large-scale projects financed with short-term
But recent political instability across the region and
returning investor confidence in Dubai has attracted buyers into
Yields on Dubai names, including the Jafza sukuk, have
narrowed in the last few weeks, with growing buying interest in
the bond. One Dubai-based fixed income trader said the market
has already priced in the refinancing of the sukuk.