Chairman’s Message
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During the past 12 months, Europe has witnessed much turbulence accompanied by the sovereign debt crisis; unfortunate events that led us to adopt a cautious policy in case any future unforeseeable events impact upon our company’s performance.
While the world economy’s performance fared better than had been expected during the first quarter, largely owing to healthy growth in Asia, we were soon witnessing fresh turmoil in the financial markets as fiscal sustainability issues in advanced economies began to rise. Concerns over the sovereign debt crisis faced by European Union members led to a crisis of confidence in the financial markets; a fact which forced the ministries of finance in European countries to establish a financial entity, the aim of which was to secure financial stability across Europe. Although these measures succeeded in soothing further financial concerns, economic difficulties continued for European Union members, thereby impacting the recovery of the global markets. Meanwhile, here in the Middle East, the tightening of credit by the major regional banks continued to cast a shadow over financial markets and particularly the real estate market, which relies heavily on financing to carry out its activities. This undermined hopes of a rise in investor confidence and property values. In spite of these factors, and buoyed by sound government economic and financial policies, Abu Dhabi’s real GDP grew by 7.6 per cent from AED 481 billion in 2009 to AED 517.8 billion in 2010. While restricted by the challenging circumstances under which we operated, Reem Investments was nevertheless able to put in a strong performance. This was the result of conservative measures we had taken in previous years to protect ourselves from market forces. These measures included our master development policy to sell land plots to strong established players as well as our decision not to revalue our land at Najmat Abu Dhabi during the boom times in order to post healthier profits. Last but not least, we adopted measures to control costs and followed a prudent investment strategy. It is with great pleasure, therefore, that I am able to announce a profit of AED 238.7 million for 2010. In addition, the Board of Directors is proposing a 50% capital reduction in order to further enhance the financial efficiency of the company. Our strong financial position is proof that we are well equipped to meet the demands ahead as we look to build on our ongoing development and exploit new business opportunities for your benefit. H.H. Sh Tahnoon Bin Zayed Al Nahyan |