Mumtalakat posts 211pc jump in operating income

MANAMA: Mumtalakat, the sovereign wealth fund of Bahrain, has reported a 211 per cent jump in consolidated operating income at BD125 million ($332.4m) for 2019 on the back of a solid performance by portfolio companies.

The group said in a statement yesterday that the income growth last year when compared with BD40.2m in 2018 ($106.9m) was a result of focus on revenue enhancement and cost control.

This has also reflected in increasing the group revenues by 11pc to BD2.3 billion ($6.1bn) compared with BD2.1bn ($5.6bn) in 2018.

Mumtalakat’s total assets value reached BD7.1bn ($18.9bn) in 2019.

The results reflect another year of solid financial and operational performance across the group.

Despite a challenging year in the commodities market, Alba reported positive results for 2019, with revenue increasing by 13pc and sales volume by 33pc. The smelter also inaugurated its Line 6 Expansion Project boosting its per-annum production to become the world’s largest smelter ex-China.

Gulf Air recorded a 13pc increase in revenue from BD365.1m ($971m) in 2018 to BD412.7m ($1,097.6m) in 2019, primarily due to operating new destinations and increased capacity after delivery of the Boeing 787 and Airbus A320Neo to the fleet.

Batelco Group grew its net profit by 3pc. Last year Batelco launched National Broadband Network (BNET), the group’s new independent wholesale unit which aims to provide fibre broadband network services to all licensed operators in Bahrain.

McLaren had a positive year in 2019 with an 18pc increase in revenue coming from the higher volume of cars sold.

Mumtalakat completed a number of transactions in 2019 including investing in Grupo Premo (Premo), the leading Spanish manufacturer and distributor in the electromagnetic inductive components field which is used in automotive, telecommunications and electronics industries, and Bahrain-based Elm education platform (Elm), a fund dedicated to developing the education sector in Bahrain and the wider Middle East and North Africa region whose investments include the American University of Bahrain which opened its doors to the public in September 2019.

Commenting on the financial results, Deputy Prime Minister and chairman of Mumtalakat Shaikh Khalid bin Abdulla Al Khalifa said, “Despite the challenging global and regional economic environment, Mumtalakat has exhibited resilience and growth as it continues to play a vital role in the local economy supported by the group’s solid financial and operational performance.”

Mumtalakat chief executive Khalid Al Rumaihi said, “During 2019 Mumtalakat secured new investments and continued to work with its portfolio companies to focus on revenue enhancement and cost control which has contributed to a significant increase in operating income. This is in line with Mumtalakat’s ongoing efforts to maintain a balanced, diversified and sustainable portfolio.”

Profit before impairment losses increased by 47pc from BD56.4m ($150m) in 2018 to BD82.9m ($220.5m) in 2019. The increase was primarily on account of the increase in operating revenue and increased fair value gain on investments.

The group net result showed a loss of BD52.8m ($140.4m) in 2019 which was primarily due to non-cash impairment losses, recognised on goodwill relating to Alba, amounting to BD135.7m ($360.9m).

These losses, while impacting the group net results for 2019 do not represent a cash loss but rather represent a reduction in the value of goodwill on Mumtalakat’s books of accounts.

Last year was particularly challenging for the commodities market which led to a weakened global aluminium price outlook.

This resulted in Mumtalakat recording impairment losses on goodwill related to Alba in the amount of BD135.7m ($360.9m).

Upholding principles of prudence and transparency, Mumtalakat took the non-cash impairment on goodwill to reflect current market conditions affecting the industry.

Since its establishment in 2006, the sovereign wealth fund’s portfolio has grown from 29 companies mainly in Bahrain to over 60 companies across various markets.




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