DIC 2009Q3 profit AED281m -56%

[sharewadi]

Dubai Investment Company financial statements on DFM website this morning.

Net Profit after Minority Interests deduction is AED 266 million for 2009Q3, down 58% from AED 635m from DIC 2008Q3 profits. EPS is AED 0.07.

Net Profit for 2009M9 was AED822m, down 51% from AED 1.67 billion. EPS is 0.23.

DFM 01 November 2009:

(DIC) Dubai Investment Company: Discloses its reviewed interim condensed consolidated financial statements for the period ended 30/09/2009

DIC 2009 3Q summary and analysis

Sales revenue rose about 20% to AED 290m (not property sales which is listed separately)
Property sales fell to AED 78m, less than a fifth of AED 420m in 2008Q3
Gain on fair valuation of investment properties fell from AED 241m to AED 153m
Gain on fair valuation of investments rose from AED 112m loss to AED 52m gain
Gain on sale of investments plummeted to almost nothing: AED 806k vs AED 239m

Costs and expenses were relatively unchanged - Direct operating costs were down somewhat from AED 665m to AED 514m.

EPS for 2009 Q3 is AED 0.07.
Annualised EPS is AED 0.28.
PE based on 2009 3Q results, and today's share price of AED 1.20, is about 4.3.

So if a fair PE is about 10, then fair price estimate for DIC shares could be about AED 2.80 based on earnings. Although traditionally, DIC has traded at a lower PE than market average so that might be a bit optimistic. I'm encouraged by the increasing proportion of earnings from sales. I assume that's revenue from their various industrial units such as glass manufacturing? Any comments?

Calculation results in a slightly higher figure of AED 3.07 if 2009 M9 EPS figure of AED 0.23 used.

DIC shares are down 5.5% in the first hour or so of trading this morning. The Dubai index is probably down 3-4% (my trading screen giving the wrong figure at the moment).
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[sharewadi]

Reuters 01 November 2009:

Dubai Investments Q3 profit slips 56 pct by John Irish Dubai Investments Co (DIC) posted a net profit of 280.7 million dirhams ($76.25 million) in the third quarter, down 56 percent on the year earlier period, driven by lower income from property sales. The conglomerate, which operates in the investment, manufacturing, dairy production and real estate sectors, posted a net profit of 634.9 million dirhams in the third quarter of 2008. Profit fell as income from the sale of properties slumped to 77.7 million dirhams from 419.69 million dirhams in the year earlier period, according to a statement on the Dubai bourse website.

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[sharewadi]

Press Release 01 November 2009:

Dubai Investments PJSC reports profit of AED 822 million for the nine month period ended 30th September 2009 Dubai: Dubai Investments PJSC (DIC), the largest investment company listed on the Dubai Financial Market, today announced its financial results for the nine month period ended 30th September 2009. DI reported consolidated total income of AED 2.7 billion for the Period, with profit of AED 822 million. Total Assets as at 30th September 2009 increased to AED 15 billion, while Net Worth increased to AED 7.8 billion. The annualized return on Share Capital achieved for the Period is 31%. “These results were driven largely by a sharp focus on cost efficiency and a re-orientation of strategies aimed at facilitating long-term growth,” said Khalid Kalban, Managing Director and CEO of Dubai Investments PJSC. “DI’s strength lies in its diversified structure with subsidiaries operating in the Manufacturing, Contracting, FMCG and Property segments. DI also manages an investment portfolio comprising of equity securities focused on regional markets and investments in funds, structured products, bonds etc. This allows us to realize synergies and successfully negotiate changing macro-economic environment as well as industry-specific challenges,” Kalban added. “Furthermore, DI’s investment portfolio is spread across different geographical locations, which helps to mitigate risk levels. This structure is primarily responsible for DI achieving consistent profits each quarter, even under challenging market conditions.” The Period was marked by several achievements for DI, with many key projects completed and new strategic initiatives gaining traction. Construction of Phase 1 of Ritaj, the maiden residential project of DI’s real estate arm Dubai Investments Real Estate Company, was completed during the Period and the project is now ready for handover to customers. Phase 2 of the project is planned to be handed over in March 2010. As part of the continuous expansion of Dubai Investments Park, the largest integrated business and residential community in the Middle East, the development of areas 1 to 6 of Phase VI was completed during the Period, while work on area 7 of Phase VI and the entire phase VII is currently in progress. One of the key highlights during the Period was the commencement of commercial operations of Emirates Float Glass LLC (EFG), a state-of–the-art float glass manufacturing facility set up with technological assistance from US-based PPG Industries. Located in Abu Dhabi, EFG is currently working at full capacity, producing 600 tons/day of world-class clear float glass. With the UAE Government moving to increase infrastructure expenditure under the draft UAE Federal Budget, construction activities are expected to increase considerably in the years to come, benefiting companies operating in the real estate, construction and contracting sectors. Dubai Investments is looking to capitalize on new opportunities arising as a result of this timely stimulus measure taken by the Government. Sounding upbeat about the company’s growth prospects, Kalban said, “DI’s focus for the near future will remain on identifying new geographical markets and business segments which will enable us to increase our revenue streams and deliver beyond expectations.”

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[sam111sam]

Mainly based on the better performance on industrial unit (Glass)
and
The delivery of 50% of the units in the RE project Retaj

Mr Kalban forecast for 2010 to be a better year in general, specially on the industrial activities

DIC had been very profitable, But I always had my doubts on the source of the profits being pure revaluation that can go the other way also

I only believed them when the actually distributed 10 Fils cash dividend at the hight of the crisis in April 2009

Based on the 4Q forecast, I would expect 29 Fils profit for 2009...so another 10 Fils dividend when conditions are better in April 2010 is not a day dream !