Waha Capital, a leading investment company based in Abu Dhabi, has reported a net profit of Dh182.2 million for the first quarter of 2015, a 20.2 percent increase from the Dh151.6 million recorded a year earlier, with key portfolio companies and its Capital Markets division performing well.
At Waha Capital's Annual General Meeting, held in March 2015, shareholders approved a cash dividend distribution of Dh0.30 per share on eligible shares, which represents an increase of 140% from the previous year.
Waha Capital, which manages direct principal investments as well as global securities portfolios, benefited from an increase in earnings per share at AerCap Holdings NV following the New York-listed company's acquisition of International Lease Finance Corporation, ILFC, in mid-2014.
UAE consumer finance company, Dunia Finance, also experienced strong growth, while other portfolio companies including Anglo Arabian Healthcare, AAH, and National Petroleum Services, NPS, also made significant progress on the business development front.
Meanwhile, the Capital Markets division at Waha Capital, which is active in public credit and equity markets, expanded its business and produced healthy returns – outperforming its respective benchmarks from its inception.
Commenting on the results, announced following a board meeting in Abu Dhabi, Hussain Jasim Al Nowais, Chairman of Waha Capital, said, "The financial results recorded during this quarter demonstrate Waha Capital's stature as a successful investment company rooted in Abu Dhabi, with a strong portfolio of regional and global investments. We have demonstrated sustained profitability through the strong performance of our diversified portfolio of direct investments and will look to invest up to Dh4 billion in sectors with high growth potential such as energy, infrastructure, healthcare and education over the next five years. Waha Capital has also successfully added to its asset mix by developing a strong capital markets capability and we expect to offer this expertise to third-party investors this year."
Salem Rashid Al Noaimi, CEO and Managing Director of Waha Capital, added, "Having consistently produced strong return on equity in recent years thanks to our sound investment strategy and long-term patient view on major investments, Waha Capital remains fully focused on value creation and on growing our diversified portfolio of investments. We are positioned for growth and well placed to take advantage of exciting new opportunities across the MENA region."
Waha Capital's assets now stand at Dh9.6 billion as of 31st March, 2015, slightly lower than at the end of 2014 (Dh9.8 billion), mainly due to the reduction of the company's cash balances and the revaluation adjustment in the AerCap Collar. Total shareholder equity increased to Dh3.6 billion in the first quarter of 2014, from Dh2.5 billion a year earlier.
New York-listed AerCap Holdings NV, the world leader in aircraft leasing, in which Waha Capital owns a 12.6 percent stake, continued to see strong growth following the acquisition of ILFC. During the first quarter, AerCap purchased 17 new aircraft, signed lease agreements for 67 aircraft, delivered 32 aircraft under contracted lease agreements, and executed the sale and part-out transactions for 20 aircraft. At the end of the quarter, its portfolio consisted of 1,640 aircraft that were either owned, managed or under contract to purchase. The company has signed financing transactions for Dh5.9 billion ($1.6 billion).
Dunia Finance, the UAE-based consumer finance company in which Waha Capital owns a 25 percent stake, reported a 43.2 percent rise in net profit to Dh58.7 million in the first quarter. The company has undertaken several strategic cost management initiatives, such as re-engineering business processes and renegotiating costs with vendors and landlords, which reduced its cost-to-income ratio to 29.7 percent in the first quarter from around 34.7 percent a year earlier.
The Anglo Arabian Healthcare, AAH, Group, which was acquired by Waha Capital in mid-2013, achieved consolidated revenue of Dh48.8 million in the first quarter, compared to Dh30.4 million a year earlier. AAH continued to expand its footprint by making further acquisitions in specialty healthcare services. AAH acquired majority stakes in Health Bay Polyclinic and in Oras Medical Centre LLC., and signed a long-term exclusive contract with a large specialty hospital in Al Ain to operate and manage all laboratory related work.
Waha Capital co-founded the $300 million MENA Infrastructure Fund in 2007 and has a 17.9 percent limited partner investment in it. The fund, whose other co-sponsors are Fajr Capital and HSBC Bank Middle East, is currently invested in four projects: Alexandria International Container Terminals in Egypt, Qurayyah Independent Power Project, IPP, in Saudi Arabia, United Power Company in Oman and Sohar Power Company in Oman. The fund continued to pay a dividend yield of about 7% per annum.
National Petroleum Services, NPS, in which Waha Capital owns a 20.15 percent stake, continued to position itself for long-term growth, particularly in emerging markets, and to make significant enhancements to the quality of its services. The company secured contracts worth Dh82.5 million in the first quarter, taking total outstanding contracts-in-progress to Dh1.63 billion. NPS recorded revenues of Dh171.5 million in the first quarter, compared to Dh141.3 million in the same period of 2014.
The Capital Markets division at Waha Capital continued to grow its contributions to the company's profits. The division has built a solid track record managing a portfolio of global credit market investments and regional equities, consistently outperforming its respective benchmarks. Waha Capital's investment management subsidiary is preparing to launch asset management services to third-party investors later this year.
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. At the end of the first quarter, the project's 90,000 sqm of small industrial units (SIUs) had been fully 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 available area of serviced land within Phase I of the development.