Mumtalakat Announces Solid Profits for the Fourth Consecutive Year

The audited consolidated financial results for the fiscal year ended 31st December 2016 were released by the Board of Directors of the Bahrain Mumtalakat Holding Company (“Mumtalakat”), the investment arm of the Kingdom of Bahrain today. The results reflect a continued solid financial and operational performance across Mumtalakat’s group of companies (“Group”).

• Mumtalakat Group net profit up 140% to BD 68.9 million (US$ 183.2 million)
• Mumtalakat completed five international investments in the industrial and manufacturing, real estate and healthcare sectors

The audited consolidated financial results for the fiscal year ended 31st December 2016 were released by the Board of Directors of the Bahrain Mumtalakat Holding Company (“Mumtalakat”), the investment arm of the Kingdom of Bahrain today. The results reflect a continued solid financial and operational performance across Mumtalakat’s group of companies (“Group”).

Commenting on the results, Mumtalakat Chairman Shaikh Khalid bin Abdulla Al Khalifa said, “Despite global macroeconomic uncertainty, Mumtalakat reported strong profits for the fourth consecutive year. The Group registered a net profit of BD68.9 million (US $183.2 million), compared to BD28.7 million (US $76.3 million) in the prior year. Our strong results in 2016 are a testament to the strength of our investment strategy and ability to mitigate challenges with the sound business judgment and commitment of the Board at the helm of Mumtalakat.”

Mumtalakat’s Chief Executive Officer, Mahmood Hashim Alkooheji added, “We are very proud of our achievements in 2016. Over the course of the year, Mumtalakat took active steps to further develop its portfolio through commercially viable investments while diversifying into new sectors and territories, most notably, healthcare and building long-term partnerships with businesses that share our values. Mumtalakat’s more recent investments constitute less than 10% of its portfolio value, yet they contribute more than 15% to total annual dividends received.”

“Mumtalakat’s sound performance, year after year, is a reflection of the strength of its approach. We’re confident that this sustained accomplishment allows Mumtalakat to enhance its support of sustainable national development, spearheaded by the Government of Bahrain, through its continued management of the companies within its portfolio,” continued Alkooheji.

In 2016, Mumtalakat successfully concluded five international investments across the manufacturing, healthcare, and real estate sectors. Marking its debut into the healthcare sector, Mumtalakat acquired a significant equity stake in KOS Group, a leading European healthcare group focused on long-term care and rehabilitation services, with additional activities in hospital equipment management, diagnostics and care for chronic diseases.

As part of its focus on growing its industrials and manufacturing portfolio, Mumtalakat also acquired a significant equity stake in a specialised international provider of water treatment solutions, Envirogen Group, in the UK, in addition to an equity stake in leading industrial gas producer Gulf Cryo based in Kuwait, and a significant stake in Aleastur, a leading manufacturer of aluminium grain refiners and alloys, in Spain.

Furthermore, Mumtalakat established a partnership with Regents Properties through which it acquired an interest in an existing portfolio of high-quality commercial real estate assets in the United States.

The financial results demonstrate an increase of Group net profits by 140% despite some losses in revenue by two leading national subsidiaries: Alba sales revenue decreased due to lower London Metal Exchange (LME) prices for aluminium. Similarly, the increased regional competition in the aviation industry amidst challenging macro-economic conditions led to an increase in operating losses for Gulf Air during 2016.

At the same time, Mumtalakat upheld the highest standards of corporate governance and transparency, maintaining its rating of 10 out of 10 in the Linaburg-Maduell Transparency Index, for the second year in a row. Mumtalakat was one of only 13 funds out of 50 in the world to be awarded full marks.

Mumtalakat continues to support its portfolio companies in line with its interest in supporting the national economy. Between 2007 and 2011, Mumtalakat’s funding of the national carrier of the Kingdom, Gulf Air, reached a total BD 475 million. Today, it continues its backing of the Bahrain International Circuit with annual funding of approximately BD13 million.

Through its wholly-owned subsidiary, Edamah, Mumtalakat is contributing to improved community living and tourism with investments in the real estate sector in the Kingdom of Bahrain. Five such developments, at a total cost of over BD 400 million, are currently underway by Edamah. These include Sa’ada, a waterfront development in Muharraq; a North Hawar eco-tourism development, a multi-storey car park in Adliya (The Terminal), a French-themed cultural environment (Versailles Plaza), and the Isa Town Retail Strip (Sharwa). These enhanced lifestyle and community service developments are expected to create over 3,000 job opportunities across the Kingdom in addition to attracting further regional tourism.

Financial Highlights