Mubadala swings back into profit

Mubadala, the Abu Dhabi investment fund with a mandate to boost the emirate's local economy, swung to a net profit in 2012, helped by improved margins at some of its core businesses and lower impairments, it said on Thursday.

Abu Dhabi is investing billions of dollars in industry, tourism and infrastructure locally as well as overseas through state-backed entities such as Mubadala.

However, earlier this month Mubadala signed a $2 billion loan refinancing with banks to replace a $2.5 billion loan agreed in 2010.

Spreads on Mubadala bonds widened slightly on Thursday with the $500 million 7.625 percent bond maturing 2019 bid at 128.5 cents to the dollar to yield 2.520, compared with 2.515 on Wednesday.

 A $750 million 5.5 percent bond maturing 2021 was bid at 117.5 cents to the dollar to yield 3.03 percent, compared with 2.962 percent on Wednesday.

The fund made a profit of Dh455 million ($124 million) in 2012, compared with a loss of Dh3.2 billion in 2011, when it booked heavy impairments on its financial portfolio.

The fund, which has a local joint venture with General Electric and interests in the semiconductor, oil and gas, aerospace and real estate sectors in the region, increased its revenue by 12 percent last year to 31.3 billion dirhams, boosted, it said, by higher semiconductor sales and land sales.

Losses from financial investments fell to Dh1.43 billion last year after a loss of Dh3.03 billion in 2011, while impairments on the fund's property portfolio dropped to Dh585.7 million from Dh653 million.

"Our 2012 financial performance is a reflection of how we manage our portfolio, with certain key assets and projects reaching further maturity and improved market conditions positively impacting the value of many of our financial investments," said Chief Executive Khaldoon al Mubarak.

Mubadala's total assets stood at Dh202.8 billion ($55.22 billion) at the end of the 2012, up from Dh177.1 billion a year ago.

Mubadala, one of few state-controlled vehicles to publish results, also owns stakes in listed local companies such as Tabreed and Aldar Properties which received shareholder approval for a merger with rival Sorouh Real Estate in March.

Follow Emirates 24|7 on Google News.