Dubai's Jafza sees 20% decline in H1 profit
Dubai state-owned industrial hub Jebel Ali Free Zone (JAFZA) said on Monday that profit for the first half of the year fell 20 per cent as higher financing costs more than offset a rise in revenue.
The company, which completed a three-pronged financing package to repay a US$2bn-equivalent Islamic bond earlier this year, made a profit of DH212m ($57.72m), down from Dh265m in the same period last year.
Revenues rose to Dh712m in the first half of 2012 from Dh662m in the first half of 2012, company financial statements showed.
The company, which runs an industrial free zone on the outskirts of Dubai, incurred net financing costs of Dh243.8m for the first half, an increase of 40 per cent from the same period last year when such costs were Dh173.5m.
In June, JAFZA, a unit of state conglomerate Dubai World, repaid the Dh7.5bn sukuk ahead of maturity after it secured refinancing through a $1.2bn sharia-compliant loan, along with a new $650m sukuk and internal resources.
Jafza also announced yesterday that it had welcomed 236 new companies in the first half of 2012.
This meant the free zone recorded a 26% growth in comparison to the same period last year, with the its total clientele rising to 6,750 at the end of June, 2012.
Ibrahim Al Janahi, deputy CEO of Jafza, said: “Our remarkable growth in the first half of 2012 reaffirms Jafza’s indisputable status as the region’s top trading and business hub and a leading driver of Dubai and the UAE’s economic growth.
“The Free Zone’s consistent performance also reflects the visionary leadership of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, vice-president and prime minister of the UAE and ruler of Dubai, who, through his forward looking business friendly policies helped the Emirate and the country, regain the growth momentum.”
“Dubai has recently approved a number of new projects in diverse sectors, from real estate to transport and logistics that would contribute significantly to the economy in the coming years. Dubai is the main contributor to the non-oil sector of the UAE economy,” added Al Janahi.
With the launch of newly built free zones such as Dubai World Central, Abu Dhabi’s Kizad and ALMARKAZ, an increase in competition for clients is expected in the second half of 2012. However, Jafza remain optimistic. “Jafza continues to see increasing growth momentum as it approaches the end of Q3. Looking at trends Jafza expects even better growth in the number of new companies at the end of the FY 2012,” it said through a statement.