Waha Capital PJSC, one of leading investment companies based in Abu Dhabi, announced its preliminary financial results, reporting a net profit of Dhs306.4m for 2013, compared to Dhs214.4m in 2012, marking a year-on-year increase of 43percent and the company’s highest results since its establishment.
The growth in net profit was driven by increased returns from Waha Capital’s key direct investments, including New York-listed aircraft leasing company AerCap Holdings and UAE consumer finance company Dunia Finance, as well as the strong performance of the company’s capital markets division.
The value of Waha Capital’s assets increased 18% as of 31 December, 2013 to reach Dhs5.24bn, up from Dhs4.44bn a year earlier.
The preliminary results were announced following a Board meeting in Abu Dhabi chaired by His Excellency Hussain Jasim Al Nowais, Chairman of Waha Capital.
“Waha Capital has achieved strong financial results in 2013 with record net income, thanks to the implementation of the sound investment strategy the company adopted a few years ago,” said Al Nowais. “Although we are very pleased with our results and the growth indicators, we view this accomplishment as a small step towards achieving greater profits and continuing to increase long-term shareholder value through investment in high potential sectors. Our strong track record helps position Waha Capital as the investment partner of choice in the region.”
Waha Capital’s results translate into earnings per share of Dhs0.16 in 2013, compared to Dhs0.11 a year earlier, with return on equity rising to 12.6% from 9.4%. Shareholder equity increased by 8.4% in 2013 to reach Dhs2.53bn up from Dhs2.33bn in 2012.
Commenting on the results, Salem Rashid Al Noaimi, CEO and Managing Director, said, “Our return on equity is extremely encouraging, given the historical uncertainty in the global economy, and compares favourably with our peers. Thanks to our strong balance sheet, we are well positioned to make further investment in attractive sectors across the region and to continue delivering solid returns for our shareholders and investment partners. Our strategy is to acquire majority stakes in companies where value can be added through our principal investments division, while increasing exposure to debt and equity markets through our capital markets unit in order to enhance liquidity in our diversified portfolio.”
In mid-2013, Waha Capital made its first investment in the healthcare sector by acquiring Anglo Arabian Healthcare (AAH), a healthcare group established to own and operate hospitals, clinics, pharmacies and diagnostic centres across the United Arab Emirates. This investment broadens Waha Capital’s asset mix, marking its entry into an area that holds high growth potential and is a priority for the UAE.
Portfolio investments and capital markets unit continue to perform well.
New York-listed AerCap Holdings NV, in which Waha Capital owns a 26.3% stake, continued to position itself for long-term growth, making significant enhancements to the quality of its fleet and adding a net 45 aircraft during 2013.
In December of 2013, AerCap announced its plans to acquire 100% of the common stock of International Lease Finance Corporation (ILFC) from American International Group (AIG). The total consideration of the acquisition has a value of approximately $26bn including the assumption of the outstanding ILFC net debt of $21bn. The transaction is expected to close in the second quarter of 2014, at which point AIG will receive $3.0bn in cash and 97.6 million newly issued AerCap shares. Existing AerCap shareholders will own approximately 54% of the combined company, while AIG will own about 46% of the combined company.
Waha Capital’s Board announced in December that it would vote in favour of the transaction. On the closing of the acquisition, the company will continue to own the same number of shares in Aercap; because of the newly issued shares, its shareholding will be reduced to approximately 14% through dilution. Waha Capital expects to gain immediate shareholder value through the dramatic increase in scale and earnings at AerCap.
Al Nowais noted that the company’s net profit for the year 2013 does not include any revenue from the Aercap acquisition, expected to close in the second quarter of 2014.
Dunia Finance, a UAE-based consumer finance company in which Waha Capital owns a 25% stake, continued to demonstrate strong growth in 2013, further expanding its loan book by approximately 60% annually. The company also registered over 24,000 new customers and experienced loan growth of 35.4%.
Stanford Marine Group (SMG), a leading operator of offshore supply vessels (OSVs) in which Waha Capital holds a 49% stake, continued to increase its fleet in 2013, bringing its total fleet to 39 vessels, and to focus on its core chartering, shipbuilding and repair operations. Over the year, the fleet recorded a steady utilisation rate in excess of 90%, deploying vessels into new markets.
Waha Capital’s investment in infrastructure, through its participation as a sponsor and limited partner in the $300m MENA Infrastructure Fund, continued to perform well, acquiring a 20% shareholding in Sohar Power Company SAOG, a Muscat-listed company in 2013.
The company’s capital markets division, which already enjoys a strong track record in debt markets, is starting to invest in equities. Waha Capital has been increasing its exposure to global credit markets over the last two years, delivering strong performance in 2013, against challenging global market conditions due to heightened volatility.
Finally, Waha Capital’s industrial real estate development, ALMARKAZ, has seen strong leasing demand due to the project’s high-quality infrastructure, strategic location, flexibility and scale. By the end of 2013, just over 60% of the 90,000 sq m of warehouse and light industrial space had been leased. The project is on track to achieve 90% occupancy during 2014.
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