Dubai’s ICD reports Dh36.1b net profits in 2022

By Saifur Rahman

Investment Corporation of Dubai (ICD), an investment arm of Dubai Government whose portfolio includes Emirates Airline and Group, FlyDubai, Emirates NBD Bank, Dubai Islamic Bank, Commercial Bank of Dubai, Ithra, Dubai Duty Free and other important assets, reported a 58 percent jump in revenue exceeding Dh267.4 billion (US$72.86 billion) in 2022, up from Dh98 billion (US26.7 billion) in 2021 with a record net profit of Dh36.1 billion.

The net profit attributable to the equity holder was Dh29.8 billion (US$8.11 billion). All business segments contributed to this remarkable achievement.

This is boosted by Emirate’s NBD bank’s net profit of Dh13 billion, Dubai Islamic Bank’s Dh5.6 billion net profit and Emirates Group’s record profit of Dh10.9 billion (US3 billion), reported by Emirates Group earlier this month – that make up the bulk of the Dh36.1 billion net profit. For the financial year ended 31 March 2023, the Emirates Group posted a record profit of Dh10.9 billion (US$3.0 billion) compared with an Dh3.8 billion (US$1.0 billion) loss for last year, Emirates Group said in a statement issued earlier.

Credit rating agency Standard & Poor’s (S&P) Global projected that Dubai’s real gross domestic product (GDP) will expand by about 3 per cent in 2023, driven by the city’s relatively well-diversified and service-oriented economy. Dubai has been repaying its debt, including $2.9bn in bonds from 2020 to first-quarter 2023 and reduced its loans from Emirates NBD by 30 per cent over the same period.

“We forecast a reduction in government debt to about 51 per cent (US$66 billion) of GDP in 2023 from a cyclical high of 78 percent in 2020,” said S&P Global.

The components of S&P Global’s gross general government debt estimate for 2023 include 44 per cent in loans from Emirates NBD, US$20 billion in loans extended by Abu Dhabi and the Central Bank of the UAE in the wake of the 2009 financial crisis and outstanding securities issued by the government, and other bilateral and syndicated facilities.

Sheikh Ahmed bin Saeed Al Maktoum, Chairman of Dubai Fiscal Committee, Chairman and Chief Executive, Emirates airline and Group, said, “The [Emirates] Group is the biggest player in the UAE’s aviation sector, which supports over 770,000 jobs and generates an estimated contribution to GDP of over US$47 billion (Dh172.5 billion). With our growth plans, and in line with the Dubai Economic Agenda D33, we expect to significantly increase our contribution to the UAE’s GDP over the next decade through direct and indirect employment, supply chain spending, tourism spend, and trade and commerce benefits from the movement of cargo.

“In 2022-23, we’ve not only brought back most of our operations but also grew our footprint and capabilities by investing in people, product, and new technologies – demonstrating our agility and ability. We continue to lay strong foundations for future success and join hands with partners to grow our business and to collaborate on innovative solutions for travel and aviation. As our business expands, so does our ability to make a positive impact on the communities we serve. We are steadfast in our commitment to deliver value to our customers and stakeholders while minimising our environmental impact.

“We go into 2023-24 with a strong positive outlook and expect the Group to remain profitable. We will work hard to hit our targets while keeping a close watch on inflation, high fuel prices, and political and economic uncertainty.”

Assets grew 6.9 per cent reaching a record Dh1.17 trillion supported by the much higher level of activity overall. Liabilities increased to Dh908.1 billion, whilst borrowings and lease liabilities declined 9 per cent. The Group’s share of equity increased by 13.6 per cent rising to a new record of Dh216.5 billion.

“Revenues reached a record Dh267.4 billion, up 58 per cent with an increase of Dh98 billion compared to the prior year period, due to a significant surge in travel and tourism activities reflected in the Transportation and other segments, and a jump in Oil & Gas revenues on much higher oil prices. Overall, revenues grew faster than operational costs, boosting margins,” a statement said.

The Group reported a record net profit of Dh36.1 billion, with Transportation returning to profitability in an impressive turnaround, Oil & Gas increasing its profit by 82 per cent, and the Other segment up by 115 per cent buoyed by strong fundamentals in the real estate and hospitality sectors and record earnings from aluminium production. Banking and Financial Services, the largest contributor this year, generated Dh15.3 billion net profit.

Mohammed Ibrahim Al Shaibani, Managing Director, Investment Corporation of Dubai, commented: ”The Investment Corporation of Dubai announced today record revenues, earnings, assets and equity for the year 2022, a truly exceptional achievement with improvements seen across all businesses. With the strong momentum in the Dubai economy, the ICD Group was able to further deploy its operational capacity in an agile manner and benefited both from a scale effect and a strong discipline on costs, producing its best ever performance.

“The Group’s balance-sheet ended the year in a very favourable position, with improved asset quality, liquidity and leverage and a record equity base.

Overall, the Group emerges resilient and stronger than ever from a volatile period marked by geopolitical conflicts and rising interest rates , and I am confident that our businesses will carry on building on these strengths to weather the uncertain global economic outlook as well as seize opportunities and conquer new markets.”

Shayne Nelson, Group Chief Executive Officer of Emirates NBD Bank, said, “Dubai’s economy is forecast to deliver strong growth in 2023 and the Group’s solid balance sheet is ready to support our customers and help them grow both locally and internationally.”

Also published on Medium.