EPS figures calculated from Net Profit / 3,245,814,000 shares outstanding.
DIC share price as of 30 Oct 2008 was 1.91 dhs, so 2008 estimated PE is about 1.91 / 0.80 = 2.4, based on Q3 earnings, which is much less than the market average PE of about 10. 2008 PE estimate based on M9 earnings is 1.91 / 0.69 = 2.8, which is a bit more but still makes DIC shares look like one of the bargains of the Dubai stock market. However, of that AED 635m profit for the quarter, about AED 480m came from revaluation of properties and profit from sale of investments. Strip that out and do a PE calculation on the remainder, then it's much closer to the market average of about 10. A similar calculation for the M9 earnings gives a PE about 5 or 6.
The gains from sale of investments includes AED 235m from the sale of a stake in the DIC subsidiary M'Sharie. A statement from DIC in September 2008 said "The divestment of M'Sharie will allow Dubai Investments to raise a capital of Dhs400m." (see the M'Sharie sale topic).
On the downside, DIC took a 112m dh hit on investment valuation for 3Q 2008, vs a small increase in 2007 3Q.
Overall, DIC profit is still increasing quarter by quarter (2008 Q2 was AED 550m and 2008 Q1 was AED 490m) so DIC should go over the AED 2bn level for total 2008 profit, however, they can't sell M'Sharie again - they'll have to find something else to unload, especially as revaluation gains may be harder to come by with the current financial turmoil, and possibility of property prices in Dubai stagnating or falling.
Net Profit of AED 635m was below what the CEO Khalid bin Kalban had forecast a month ago (see DIC 2008Q3 profit forecast). According to Reuters, he said "We expect profit for the third quarter to be between 650 million to 700 million dirhams". DIC shares fell marginally today to AED 1.91 - results were released after market closed.
Good news, the CEO of Dubai Investments expects continued growth in the last quarter of 2008. Except he didn't say what assets they were going to sell to trump the AED 235m from M'Sharie. Mind you, they only sold 40% of M'Sharie - maybe they'll sell the other 60% in another private placement instead of doing the M'Sharie IPO?
Press Release 30 October 2008:
Dubai Investments net profit soars to AED 1.67 billion for nine month period ended 30 September 2008
Achieves increase of 137% in net profit for the quarter
Dubai Investments PJSC (DIC) maintained its excellent earnings growth with net profit for the nine month period ended 30 September 2008 (‘the Period”) surging to record levels. Net profit for the Period increased to AED 1.67 billion from AED 1.07 billion for the same period last year, an increase of 56 per cent. Total income for the Period increased to AED 4.10 billion from AED 2.59 billion for the same period last year, an increase of 58 per cent.
The net profit for the third quarter of 2008 (3Q08) increased to AED 635 million from AED 268 million for the third quarter of 2007 (3Q07), an increase of 137 per cent. The total income for 3Q08 increased to AED 1.44 billion from AED 812 million, an increase of 77 per cent.
Total Shareholders’ Equity (“Equity”) at 30 September 2008 was AED 7.38 billion, representing a growth of 66 per cent over Equity of AED 4.44 million at 30 September 2007. This was achieved due to significant growth in net profit and increase in share capital on rights issue. The return on average equity achieved for the Period is 27%. The earnings per share (EPS) for the period is AED 0.49, higher than the EPS of AED 0.36 for the previous period.
“Our exceptional performance even during these difficult times of financial uncertainty reflects our ability to deliver results exceeding expectations on a sustainable basis”, said Khalid Bin Kalban, Managing Director and CEO of Dubai Investments. “This growth has been achieved mainly through the outstanding performance of group companies and through significant gains from our real estate ventures. The strategic divestment of 40 per cent of M’Sharie LLC has also contributed to the phenomenal results achieved. We expect to maintain this growth momentum into the future due to the diversified nature of the Group and further drive up the profits in the last quarter of 2008.”
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