Jebel Ali Free Zone (Jafza) said 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 $2 billion-equivalent Islamic bond earlier this year, made a profit of Dh212 million ($57.72 million), down from Dh265 million in the same period last year.
Revenues rose to Dh712 million in the first half of 2012 from Dh662 million in the first half of 2012, company financial statements showed.
The company incurred net financing costs of Dh243.8 million for the first half, an increase of 40 per cent from the same period last year when such costs were Dh173.5 million.
In June, Jafza, a unit of state conglomerate Dubai World , repaid the Dh7.5 billion sukuk ahead of maturity after it secured refinancing through a $1.2 billion Shariah-compliant loan, along with a new $650 million sukuk and internal resources.
Jafza, the flagship business unit of Economic Zones World, said 236 new firms joined in the first half of 2012, an increase of 26 per cent in comparison to the same period last year.
This lifted the free zone’s total strength to 6,750 at the end of June, 2012. These companies together generated trade worth Dh253 billion, accounting for more than a quarter of Dubai’s total trade and half of the Emirate’s total exports. The Free Zone companies in FY 2011 also sustained over 170,000 jobs in Dubai.
Ibrahim Al Janahi, Deputy CEO 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.”
He said Dubai had 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.
Jafza has attracted more than 200 leading multinationals in diverse sectors into the Free Zone in the first half of 2012, which includes more than a dozen companies having a gross annual turnover of over Dh1 billion. Among the prominent companies that have joined Jafza in the first half of 2012 are multinational giants such as Bauer Kompressoren, Germany and NSK Bearings, UK (machinery & equipment); Framecad International, New Zealand (building material); CNPC, China (engineering) and Giordano from Hong Kong (fashion & garments).
28 per cent of the new companies that joined Jafza in H1 2012 are from Europe, 25 per cent from the GCC, 20 per cent from Asia Pacific, 10 per cent from America and the Middle East and 7 per cent from Africa. The firmographic analysis shows the strongest interest from European companies in Jafza followed by companies from the GCC and Asia Pacific.
In terms of business activities at the Free Zone trading continues to be the leading sector (81 per cent) followed by service and industrial sectors, which once again endorses Jafza’s unbeatable position as the region’s trading hub.
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 FY 2012.