Dubai's SWF ICD reported a 21.4 per cent decline in full-year net profit for 2016. Hats off to them for not trying to equivocate. On the other hand ADCB stated "...[ADCB's] fundamentals and underlying performance remained healthy..."
Net interest and Islamic revenue grew at 15 per cent QoQ whilst the equivalent expenses grew at 30 per cent. I personally don't consider that healthy. Maybe ADCB defines fundamentals differently. Perhaps listed companies should be explicit about what they mean by fundamentals and how they are calculating them from the financials. It would be beneficial if the Securities and Commodities Authority insisted on clarification of such statements. The Central Bank of the UAE is also a regulator in this situation and we would benefit from their insight in the matter. Financial performance should not be glossed over using vague, undefined terms.
Similarly du, the telecommunications company, announced in the beginning of its commentary that it "has made steady progress in the second quarter of 2017, with a 6.2 per cent increase in revenue and a slight improvement in net profit.” The problem is that du’s financial statements clearly state that its operating profit dropped, by 2.3 per cent. We don’t have to argue about what core income is here, du clearly defines and unfortunately the slight deterioration in operating profit is not discussed.
Let me close with great news for start-ups: Dubai will start issuing a one year “licence light”, which is faster and easier to obtain than a normal licence. A simple benefit: you don’t need to lease offices. This is valid for only a year before there is the need to renew as a regular licence. A great step forward.
Sabah al-Binali is an active investor and entrepreneurial leader with a track record of growing companies in the Mena region. You can read more of his thoughts at al-binali.com