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The state-backed firm said it has delayed a planned listing of subsidiary Emicool until market conditions improve.
Dubai Investments (DI), the government-backed firm listed on the Dubai Financial Market, aims to expand into Europe as part of a $1 billion investment plan to boost its asset base by around a third within the next five years, the chief executive officer said.
The conglomerate, in which sovereign wealth fund Investment Corporation of Dubai owns an 11.5 percent stake, said in a statement that it plans to boost its asset base to 20 billion dirhams within the next three to five years through new acquisitions and increasing its stake in existing assets.
The firm had assets of 15.3 billion dirhams ($4.16 billion) as of 31 December 2015, across a portfolio of 41 companies in a range of sectors, such as property, manufacturing, contracting and financial investments. It aims to diversify into new sectors such as asset management, healthcare and education, the statement added
"If you look at what we are going to invest through acquisitions and investments and real estate we are talking about $1 billion in future acquisitions and developing major real estate projects," Khalid Jassim bin Kalban, DI's managing director and chief executive officer, told reporters on the sidelines of an annual general meeting last Wednesday.
DI's keystone project is the mixed-use Dubai Investments Park, which it is looking to replicate outside the United Arab Emirates. It is already developing the Riyadh Investment Park in Saudi Arabia, as well as similar upcoming projects in Ethiopia, Angola and Morocco.
DI is currently waiting on a response from the Moroccan government on its proposal to develop a project in the kingdom, and Kalban said the company hopes to use this as a springboard to expand across the Mediterranean Sea into Europe.
"Yes, that is the whole idea. We need to be there," he said when asked whether he would like to expand into Europe. "We would like to do this in North Africa because of its proximity to Europe."
Divestment seen boosting Q1 2016 profits
DI reported a 16 percent drop in year-on-year net profit for 2015 to 1.1 billion dirhams at its annual general meeting.
Kalban said he expected the firm's first quarter net profit to be higher than that of 2015.
"The profit will be better than in the first quarter of 2015 because of the exit the company is going to announce in the first quarter of 2016," he told reporters but declined to elaborate, saying only that an announcement would be made at a later date.
DI posted a net profit of 282.18 million dirhams in the first quarter of 2015, up 6 percent from the same period the previous year.
Kalban said the divestment in 2016 would bring the company "in the first quarter approximately 136 million [dirhams] and the subsequent quarters, quarter two and quarter three, the potential of 75-80 million [dirhams]."
DI's share price on the Dubai Financial Market (DFM) slumped 13.3 percent in 2015, but has recovered by nearly a fifth since the start of the year. The DFM General Index has recovered 12.22 percent since the start of the year, but is still down 10.55 percent compared to 12 months ago.
Emicool listing delayed
Kalban had said last month that the company planned to list one of its subsidiaries on the DFM, but he said on Wednesday that this has now been put on hold and will be reviewed later in the year.
"We have one company, Emicool, which is district cooling, that was supposed to be listed on the DFM by May or June this year. Our financial advisor is advising us not to, or delay it a little bit, due to the market circumstances," Kalban said.
"[If] the market keeps performing the way it is we may list this company by the third quarter. But if the market weakens then we will think of something else," he said. "We have had companies approach us to do a trade sale, to sell our shares to them rather than go public, which we are now weighing to see what price and valuation."
While the market may not be ready for a listing, Kalban said it was a buyers' market and he sees "plenty" of opportunities to snap up distressed assets.
"We want to grow and there are many opportunities, especially now when the market is dull. There is a lot of opportunities and we have to be ready with cash to be able to buy those companies... Some of them will be reflected in the second quarter of 2016."
DI, established in 1995, has amassed over 19,800 shareholders since it was listed on the DFM in 2006.
© Zawya 2016
