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29 March 2024

Waha posts Dh1.1bn Q2 net

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By Staff

Waha Capital, an investment company based in Abu Dhabi, on Tuesday reported a preliminary net profit of Dh1.138 billion for the second quarter of 2014, up from Dh38.4 million recorded in the corresponding period a year earlier.
 
The record quarterly net profit for the company -- the first time quarterly net profit has exceeded the AED 1 billion mark -- was largely due to the unlocking of part of the value in Waha Capital’s stake in AerCap Holdings NV following the New York-listed company’s acquisition of International Lease Finance Corporation (ILFC), a transaction that closed in May this year.
 
Waha Capital booked a one-off gain related to the transaction, and recorded a higher earnings contribution from AerCap, because of the increase in scale, valuation and earnings per share at the aircraft leasing company. Other Waha Capital portfolio companies also displayed steady performances, with Anglo Arabian Healthcare and Dunia Finance, continuing their promising business development.
 
Half-year net profit reached Dh1.289 billion, representing a nine-fold year-on-year increase.

Commenting on the results Hussain Jasim Al Nowais, Chairman of Waha Capital, said: “These exceptional results are a testament to Waha Capital’s strong financial position and sound investment process.  The company is in an excellent position to take advantage of attractive investment opportunities in high potential sectors in the local and regional economy.”
 
Al Nowais added: “We will continue to focus on maintaining a healthy pace of growth in our core activities. I am confident that Waha Capital has the right level of expertise and the financial capacity to continue to maximize shareholder value.”
 
Salem Rashid Al Noaimi, CEO and Managing Director of Waha Capital said: “Our diversified investment strategy is yielding strong results. It is important to note that one-off gains, such as that recorded from the AerCap-ILFC transaction are infrequent in the short term, but based on our strong track record, we are confident that our strategy for value creation will produce return on equity which we believe will continue to exceed that of our local and regional peers.”
 
He added: “Waha Capital is very well funded and we are looking to commit further capital in high potential areas of the economy, in particular healthcare, energy and infrastructure. At the same time, we will continue to develop our capital markets investment business, which is establishing a strong track-record of outperformance in global credit markets, and most recently in equities.”

The value of Waha Capital’s assets increased 24 per cent to Dh6.5 billion as of the end of the second quarter, up from Dh5.2 billion as at December 31 2013, with total shareholder equity increasing to Dh3.7 billion from Dh2.5 billion during the same period.
 
At the end of March, Waha Capital completed the refinancing of its credit facilities, with 13 local and international banks participating. The company obtained a five-year $750 million facility comprising a term loan for $375 million and a revolving loan for the same amount. This replaces a previous $505 million facility secured in 2011.
 
In June, the company announced the establishment of a new unit to drive its future investments in the energy sector across the Middle East and North Africa region. The unit, which is part of Waha Capital’s Principal Investments division, has made its first investment -- in National Petroleum Services (NPS) -- as part of a consortium that has acquired a controlling stake in the UAE-headquartered oil and gas services company.

The NPS transaction, which closed on 26 June 2014, has a total equity value of $370 million (Dh1.36 billion), with Waha Capital taking a 20.56 per cent equity stake for $76 million (Dh280 million). Contributions from NPS will be included in the company’s third quarter earnings of this year.

Dunia Finance, a UAE-based consumer finance company in which Waha Capital owns a 25 per cent stake, continued to produce strong results in the second quarter, with net profits up by 48.5 per cent year on year to Dh82.7 million.  Dunia’s loan book expanded 20.3 per cent in the six months to end of June 2014, with customer deposits growing 20.6 percent in the same timeframe. The company had a customer base of 150,400 as at 30 June 2014.

The capital markets division at Waha Capital continued to grow its contribution to the company’s profits. It has been increasing its exposure to global credit markets over the last two years, and has begun to invest successfully in regional equities.

The Anglo Arabian Healthcare (AAH) Group performed well, having already broken even in the first quarter, less than a year after its acquisition by Waha Capital.  The six clinics operated by the group have increased their volumes of patient visits significantly. AAH continues to pursue a number of potential acquisitions and is making steady progress on its greenfield hospital and clinic projects.

Waha Capital continues to benefit from its stable investment in MENA Infrastructure Fund, a $300m private equity infrastructure fund with assets spread across Saudi Arabia, Oman, and Egypt.

Stanford Marine Group (SMG), which charters and operates offshore supply vessels (OSVs) and in which Waha Capital holds a 49 per cent stake, maintained stable profits in the quarter with its fleet of 40 vessels achieving an average utilisation rate of 91 per cent. In the first six months of this year, SMG took delivery of one anchor handling tug supply vessel and one platform supply vessel. The company’s Grandweld Shipyard has also delivered four ships and completed 174 repair and maintenance jobs.

Waha Capital’s industrial real estate development, Almarkaz, has seen good leasing demand due to the project’s high-quality infrastructure, strategic location, flexibility and scale.  Almarkaz continued to receive growing interest from light industrial processing, manufacturing and logistics businesses attracted by the development’s international standard infrastructure and warehouse facilities.

As of the end of the second quarter, 79 per cent of the 90,000 square meters of small industrial units (SIUs) had been leased. Almarkaz is exploring a number of growth plans including the expansion of SIU space, and development of new products such as warehouses and light industrial units on the remaining 0.8 square kilometres of serviced land within Phase I of the development.