GFH registers $21.36m profit for first quarter

MANAMA: GFH Financial Group (GFH) has reported a 6.47 per cent increase in revenues, which reached $70.12 million for the first quarter of 2019 compared with $65.86m in the first quarter of 2018.

This underscores GFH’s continued success in implementing its strategy, which remains highly focused on diversifying and enhancing revenue streams and income generation across its core business activities.

Net profit for the first quarter of 2019 was $21.36m compared with $36.48m in the prior-year period, a decrease of 41.44pc.

The group reported consolidated net profit of $20.7m as against $36.89m in the first quarter of 2018.

The decrease in net profits is attributed primarily due to lower contribution from the group’s commercial banking arm and extended closure of investment funds, which are expected to realise during the second quarter.

The group’s sale of 40pc stake in its Bahrain-based Al Areen Hotel, against acquisition of the hotel tower in the Villamar development, contributed $29.4m to the proprietary investments revenue stream.

The investment banking business also contributed $7.4m, whereas the real estate business reported $8m contribution from the Harbour Row projects.

The group treasury contributed $11.3m during the quarter following GFH’s new strategy towards developing treasury recurring income.

Profit from continuing operations was $21.17m compared with $35.73m in the first quarter of 2018, a decrease of 40.75pc.

Operating expenses were $21.43m compared with $21.29m in the first quarter of 2018, increase of 0.6pc.

Finance costs increased to $23.71m from $7.17m in the comparative period of 2018, primarily due to the additional money market funds raised as part of the new treasury strategy.

Cash received was $40.72m representing 58.07pc of revenues recorded during the quarter.

Total assets increased from $4.99 billion at 2018-end to $5.91bn as of end-March 2019, an increase of 18.44pc, while liabilities also increased to $4.5bn as of end-March 2019 from $3.57bn at end-2018, primarily due to additional money market activities.

Total equity as of end-March 2019 was $1.05bn as against $1.06bn for end-2018, after factoring in profits for the quarter and appropriation for cash dividends approved by shareholders.

Earnings per share were 0.64 cents compared with 1.02 cents in the comparative prior-year period.

GFH chairman Jassim Al Seddiqi said the firm’s investment focus remains on “diversifying the business and investment portfolio to deliver steady revenue generation through varied business lines”.

“Notwithstanding sizeable investments made into further developing the business, we have delivered sound performance, that we expect to further enhance in the rest of 2019 as we build on the momentum,” he added.

GFH Group chief executive Hisham Alrayes said, “During the first quarter, we have been able to exit part of our proprietary investments to a strategic partner and took ownership of the Villamar Hotel in the Bahrain Financial Harbour. This will allow us to complete the project faster and achieve higher returns for our shareholders. We have also launched our Britus $200m education platform during the quarter and have been able to sign to acquire six new K-12 private schools in the region. We believe education is a highly specialised investment line and have plans to build on our track record and portfolio in this sector. Treasury activities have also been increasing. With momentum from the fourth quarter of 2018 and further gains in the first quarter of2019, we see this as an important recurring business line for GFH going forward.”



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