Dubai Financial Market's first nine months net profit reaches Dhs865m

DFM Company recorded total income of AED1 bn, including Dhs409m representing the operating income for the first nine months of 2007, Dhs126m representing returns on investments made by DFM Company, and Dhs468 million generated by the Initial Public Offering's (IPO) profits.

DFM Company recorded a net profit of Dhs865m for the first nine months, while total expenses reached Dhs139m during the period.

DFM Company's total profits from operating activities for the first nine months of 2007 reached Dhs397m, including total profits from operating activities for the third quarter totaling Dhs117m.

Essa Kazim, Chairman of Dubai Financial Market, said:

'The performance of DFM during the third quarter reflects the investors' high level of confidence in DFM. Although the volume of trading dropped significantly during the third quarter as result of the summer period, the value of trading has witnessed only a slight drop. The daily value of trading recorded an average of Dhs930m during the first nine months of 2007, a drop of just six% compared to the daily value of trading during January-June 2007, which reached Dhs990m.'

'DFM's management also maintained good profit levels by depending on the best approach to investing DFM Company's liquid funds. This has also been reflected in the balance sheet, showing total funds that were invested in accordance with Sharia. These funds that total Dhs3bn achieved profits totaling Dhs145m for the first nine months of 2007,' he added.

He noted: 'The IPO profits totaling AED468 million were reflected in the income statement. In addition, net revenue generated from issuing shares, which reached Dhs31.8m, was also shown as part of the ownership equity. This confirms the right of the existing shareholders in taking part of that profit, which also shows the Dubai Government's commitment when it offered DFM Company's shares to public.'

The balance sheet also showed intangible assets totaling Dhs5.8bn. Kazim explained: 'Intangible assets represent the value of rights granted to the company, such as Dubai Government's exclusive right to DFM to operate as the only stock market in Dubai. These rights also include the right to use the DFM name and brand.'

Kazim concluded: 'In accordance with international financial reporting standards, DFM has a grace period of 12 months to identify the fair value for each of these mentioned rights. Currently, measures are being taken to appoint a specialised consultant to evaluate the value of these rights. As part of its precautionary procedures, the management has initially accrued the amortisations of intangible assets by Dhs26.8m for each quarter, totaling Dhs80.4m for the first nine months of 2007. This amount was also taken into consideration when calculating the net profits for the period.'