Investment Corporation of Dubai (ICD), the state-owned investment company, reported a flat net profit for the six months to June 30 of 10.35 billion UAE dirhams ($2.8 billion), despite a 13.1 percent increase in revenue to 93.25 billion dirhams.

The company, whose portfolio includes the Emirates and flydubai airlines and Emirates National Oil Company, among others, said in a press release on Wednesday that its biggest revenue gains came via its oil and gas and transportation businesses.

It added that the size of its asset base increased by 2.2 percent since the end of last year to 786.8 billion dirhams, which was primarily due to an increase in loans and receivables through its banking arm (it owns a majority stake in Emirates NBD, plus minority stakes in Commercial Bank of Dubai and Dubai Islamic Bank), as well as the acquisition of Alec Engineering & Contracting - the construction company that is currently working on the expansion of passenger facilities at Al Maktoum International Airport.

Liabilities increased by 2.1 percent to 572.1 billion dirhams - mainly as a result of increased customer deposits within the banks.

Mohammed Ibrahim Al Shaibani, executive director and CEO of ICD, said in the press release: "In the first half of 2017 the portfolio of ICD continued to deliver strong operating and financial results and steady growth. ICD remains focused on expanding its capabilities and investing in opportunities that will support long-term growth and contribute to the prosperity of Dubai.”

A note to the company's accounts filed on Nasdaq Dubai show that ICD purchased a 90 percent stake in Alec Engineering & Contracting for a consideration of just over 1 billion dirhams.

According to the note, 921 million dirhams has been paid, with a further 90 million held as deferred consideration.

Alec was sold by Abu Dhabi-based family-owned group Al Jaber in April. It had been attempting to sell off a number of assets as part of a plan to restructure its debts.

Alec is run by chief executive Kez Taylor and managing director Barry Lewis. It has carried out several major projects at Dubai International and Abu Dhabi International airports in recent years. It has also built the new Bvlgari Hotel & Resort in Jumeirah for Meraas Holding, which is due to open next week, and in September, it was appointed by ICD to build the One Za'abeel tower project overlooking Za'abeel Park.

ICD's purchase of Alec adds to a portfolio of investments in construction companies that includes South Korean contractor Ssangyong Engineering & Construction and United Kingdom-based structural steel specialist Cleveland Bridge & Engineering.

(Writing by Michael Fahy; Editing by Anoop Menon)
(michael.fahy@thomsonreuters.com)

© ZAWYA 2017