Dubai Holding subsidiary slumps to $6.4 bn loss

the extent of debt crisis in the emirate,after another group,

Dubai World,rattled global markets in November last year with

plans to delay its debt repayment.

DHCOG is part of Dubai Holding,a conglomerate owned by emirate ruler Sheikh Mohammed bin Rashid Al Maktoum. Dubai Holding is reported to have debt worth USD 12 billion.

In a statement,DHCOG said it has recorded a loss of 23.5 billion dirhams (about USD 6.4 billion),including impairment

charges,for the year ended December 31,2010.

The company posted a “net loss (excluding impairments) of one billion dirhams for the year ended December 31,2009…”

“Impairment charges on the statement of income for the year ended 2009 stood at 22.5 billion dirhams as compared to 7.6 billion dirhams in 2008,” it noted.

The firm had reported a net profit of 17.4 billion dirhams in 2008.

Following the poor result,the Dubai Stock Exchange’s key DFM Index tumbled three per cent to close at 1,531.15 points.

Meanwhile,the company’s revenues fell 28 per cent to 9.5 billion dirhams in 2009 compared to the year-ago period.

“The decline in revenues and operating profits reflects the decrease in land sales due to the significant reduction in demand within the real estate market and the re-phased handovers of projects,” the statement noted.

Dubai Holding’s Chief Executive Officer Ahmad Bin Byat asserted that DHCOG is well placed to meet its financial obligations this year.

“There is no need to restructure outstanding debt as discussions are taking place with banks to roll over our existing facilities at commercial terms,” he added.

Striking a positive note,the firm said the realty market would stabilise this year and recover from 2011 onwards.

DHCOG comprises Dubai Properties Group,Sama Dubai and high-end hotel operator Jumeirah Group,among others.