Investment Corporation of Dubai (ICD), the emirate’s sovereign wealth fund with holdings in strategic companies such as Emirates airline and Emirates NBD, said net profits fell by 21 percent for 2016, driven by lower yields in the transportation services segment.
The principal investment arm of the Dubai government said net profit for 2016 dropped 19.6 percent to $6.02 billion (AED22.1bn) with revenues dropping mere 0.5 percent to $48.04bn (AED176.3bn).
The net profit attributable to the equity holder of ICD, however, declined by 21.4 percent to $4.9 billion (AED18bn).
ICD said the decrease in profits was primarily driven by the impact of increased competitive pressure on yields in the transportation services segment, and a comparison with a previous year’s gain on discontinued operations resulting from the sale of Standard Aero. In May 2015, Dubai Aerospace Enterprise sold StandardAero to private equity firm Veritas Capital.
Both Emirates and flydubai, two of its principal holdings in the transportation services segment, reported significant drops in their respective net profits earlier this year.
According to ICD, assets increased to AED769.9bn, up 6.9 percent from 2015, due to increase in loans and receivables in the banking and financial services segment and aircraft fleet upgrades in the transportation services segment.
Liabilities rose 7 percent to AED560.5bn from 2015 because of higher customer deposits in the banking and financial services segment.
The group’s share of equity increased by 7.2 percent from 2015, as a result of operating profits, ICD said.
“In 2016 the portfolio of ICD demonstrated resilience by delivering a strong operational and financial performance despite challenging market conditions,” said Mohammed Ibrahim Al Shaibani, executive director and chief executive officer, ICD.
He said ICD remains focused on expanding its capabilities and investing in opportunities that will support long-term growth and enhance the prosperity of Dubai.
ICD also holds stakes in companies such as Dubai Aerospace Enterprise, flydubai, Dubai Islamic Bank and Nasdaq Dubai.
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