05/31/2010 11:00PM

Darley Australia cutting jobs


Darley Australia, the Southern Hemisphere division of Dubai ruler Sheikh Mohammed al-Maktoum's global breeding and racing empire, will cut some jobs after posting a loss of about $23 million last year, according to a report in the Sydney Morning Herald.

As part of its required filing with Australia's corporate regulatory agency, Darley Australia's filing reported that "the company's ability to continue as a going concern is dependent upon the continued financial support of its ultimate shareholder," Maktoum. Earlier this year, Forbes estimated that Maktoum's personal wealth had dropped by 33 percent to about $12 billion after the global economic crisis, a credit crunch, and indebtedness to neighboring emirate Abu Dhabi stifled Dubai's recent development and tourism boom. The Morning Herald reported that the operation will cut about 30 jobs at its Twin Hills Stud.

In 2008, Darley bought Australia's famed Woodlands operation for about $420 million, resulting in a much higher operating loss that year totaling about $206 million. Other good news from 2009: the combined Australian operation saw revenue increase 6 percent to about $837 million.

Maktoum remains one of the world's wealthiest men and is still deeply committed to his worldwide Thoroughbred operation, as the Australia stud's report indicated.

"The ultimate shareholder is expected to continue to provide financial support, which it has done for a number of financial years and has continued to do subsequent to year end, to ensure the company meets its cash flow obligations for at least 12 months after the date of signing of this financial report."

But the report also said there is "uncertainty" as to how long Maktoum would continue supporting his Australian venture if losses and asset deficiencies continue to mount. The operation's liabilities rose from about $756 million in 2008 to about $840 million in 2009.