Investment Corp. of Dubai, the main state-controlled holding firm of the emirate, has reported its first loss in at least eight years as the coronavirus pandemic weighed on earnings at its portfolio companies.
The firm posted a loss of AED15.5 billion ($4.2bn) after a profit of AED18bn a year earlier, according to a statement, which was largely attributed to losses primarily from transportation and, to a lesser extent, hospitality activities, as a result of the coronavirus crisis.
A statement on the firm’s website said: “The pandemic restrictions imposed across the globe affected all travel, hospitality, retail and real estate activities to various degrees and contributed to a material decline in the price and demand for oil.”
It added that profits mostly came from “resilient backing and financial services operations”.
This was the firm’s first loss since 2012, according to data compiled by Bloomberg. Revenues were AED136.1bn ($37bn), down from AED228bn ($68bn) last year, while net impairment on losses on financial assets was AED8.5bn ($2.3bn) in comparison to the 2020 figure of AED5bn ($1.36bn).
Mohammed Ibrahim Al Shaibani, managing director, ICD Dubai, said: “Despite the severe effect of the pandemic on the group’s revenue and profitability, ICD was able to secure a solid balance sheet, sustainable operations and financial stability in 2020 owing to proactive steps taken by the group.
“From the outset and as the pandemic raged on, the group focused on preserving the continuity of its businesses and safe operations for their employees and customers. As the global crisis continued, the group entities regularly reviewed the adequacy of their plans, reducing costs and adapting their model.”
Investment Corp. of Dubai owns Emirates airline, which has seen bookings slump as demand for travel cratered. It also has holdings in banks, including Emirates NBD and Dubai Islamic Bank, as well as Emaar Properties.
Emirates Group, owner of the world’s largest long-haul airline prior to the Covid-19 pandemic, last week reported $6bn in loss – its first loss in three decades.
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