The Abu Dhabi tourism development company which is building local branches of the Louvre and Guggenheim museums posted a widening loss last year amid the emirate’s property slump and said it could take seven years to turn a profit.
The state-owned Tourism and Development Investment Company (TDIC) opened a slew of resorts and handed overs hundreds of villas in 2012 but said it might need to sell more assets this year.
“Asset sales remain a viable option for the company and with the success realized on our first two commercial sales the board will make the appropriate determination as we progress through 2013,” Shaun O’Connor told Reuters in an emailed statement.
He gave no details of the assets which were sold.
Abu Dhabi, capital of the United Arab Emirates, is investing billions of dollars in tourism, industry and infrastructure as it diversifies its economy away from oil.
But property prices have dropped significantly with residential real estate prices down some 50 per cent from their peaks in 2008.
TDIC made a net loss of Dhs2.17 billion ($591 million) in 2012 due to impairments and depreciation compared with a loss of 1.27 billion in the previous year.
Last year’s asset sales, along with the handover of a large number of residential units, lifted TDIC revenues to Dhs1.27 billion from 333.8 million in 2011.
Total impairments and depreciation amounted to Dhs2.26 billion, leaving TDIC with total assets of Dhs41.48 billion in 2012 compared with 43.37 billion the previous year, its financial statements showed.
The company ended the year with a cash balance of over Dhs2.4 billion last year.
The company has committed to its board to deliver positive results in another five to seven years, O’Connor said.
The Louvre museum is scheduled to open in 2015 and the Guggenheim in 2017.