April 1, 2013 / 8:56 AM / 5 years ago

UPDATE 1-Profits surge at Dubai ruler's flagship firm

* DHCOG’s 2012 net profit rises to 1.2 bln dirhams from 204 mln

* Writedowns fall close to zero as property market recovers (Adds details, background)

DUBAI, April 1 (Reuters) - The flagship company in the ruler of Dubai’s personal business empire increased profits sixfold in 2012, benefiting from cost cuts and a recovery in the emirate’s property market.

Dubai Holding Commercial Operations Group’s (DHCOG) net profit rose to 1.2 billion dirhams ($326.7 million) from 204 million dirhams in 2011, it said in a statement on Monday on the Nasdaq Dubai bourse, where its bonds are traded.

Impairment charges dropped to just 7 million dirhams from 2.4 billion in 2011, said the company, which has booked billions of dollars of writedowns on its real estate business since Dubai suffered a corporate debt crisis in 2009.

Revenues at DHCOG, the main business unit of Dubai Holding rose 3.8 percent to 9.2 billion dirhams.

“Whist the economic environment, especially in Dubai, ...has improved, we have worked hard across all our businesses to drive revenue and operational improvements,” Chief Executive Ahmad Bin Byat said in the statement.

Dubai’s economic recovery has been helped by its role as a tourism and business hub for the region and its strategic location between Europe, Africa and Asia, and a pick-up in residential sales has boosted the property market.

Revenues from property sales, rental and hotel occupancy contributed to the increase in net profit, the company said.

As well as property division Dubai Properties Group, DHCOG incorporates hotels group Jumeirah, business park TECOM Investments and Emirates International Telecommunications.

DHCOG had a cash balance of 1.7 billion dirhams at the end of 2012 after it repaid a $500 million bond.

It transferred some legacy real estate projects to its parent company, decreasing its current liabilities from 26.6 billion dirhams in 2011 to 21.2 billion dirhams in 2012. DHCOG’s total debt stands at 11.7 billion dirhams, it said.

Dubai Group, another unit of Dubai Holding, was one of several of the emirate’s state-linked entities which was forced to enter into debt restructuring talks after the global financial crisis in 2008.

$1= 3.6730 UAE dirhams Reporting by Mirna Sleiman; Editing by Dinesh Nair, John Stonestreet

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