During the meeting held on 14 February 2007, the General Assembly of Gulf Investment Corporation (GIC) reviewed and approved the audited financial statements for the year 2006.
2006 was another milestone year for GIC, with profits more than doubling to US$ 600.1 Million from US$272.8 Million in 2005. This is the highest ever in GIC’s history.
The 120% year-on-year increase in net profits resulted in a return on average shareholder’s equity of approximately 42.9% for 2006. Shareholders’ equity rose by 16.4% over the previous year, reaching US$ 1,911 Million at end 2006. Total assets grew by 9% to reach US$ 8,113 Million during 2006.With the General Assembly approving the calling of US$250 Million of the unpaid capital, the corporation’s paid up capital reached US$ 1000 Million, a significant milestone for GIC, and a reflection of continued shareholder commitment and support. GIC maintained the trend of paying out healthy dividends, declaring a dividend of US$ 236 Million for 2006, which represents approximately 31.5% of paid-up capital.
Commenting on GIC’s results, the Chairman of the Board, Dr Yousef Hamad Al Ebraheem, said “On behalf of the Board, I am extremely pleased by this commendable performance. This is the sixth consecutive year of profit growth subsequent to the strategic reorientation initiated in 2001, with net profits growing by several multiples during this period. GIC has emerged as a powerful player in the region, winning major projects in Power, Utilities and other sectors, competing with international players at the highest level. The Corporation’s good franchise in the region, coupled with its solid financial strength and growing profitability has resulted in superior ratings by all three principal international rating agencies. The shareholders, represented by the Board of Directors, will continue to actively support and guide GIC to reach greater heights”.
Mr. Hisham Al Razzuqi, Chief Executive Officer added “The record profits earned during 2006 was driven by significant growth in revenues across all key businesses, while maintaining a tight control on costs. Recording a 155% increase in gross operating income, the key contributor to net income continued to be the Projects activity, a core business of the corporation. Strategic investments within the Steel and Chemicals sectors provided handsome returns, boosted by the strong economic growth in the GCC region. Healthy profit growth was also recorded within the portfolio of trading securities, the alternative assets portfolio, while recording enhanced fee based income. Total investments and commitments in the GCC region at end of 2006 reached US$ 3,211 Million representing 38% of total assets.
Investment in projects is central to GIC’s corporate growth strategy, and assets within this business grew to US$ 1,076 Million .The new investments during the year include participation in two major Power & Utilities projects in Saudi Arabia, establishment of a holding company in Bahrain to consolidate interests within the Metals sector, investment in a major construction company in Qatar and several other projects within the GCC.
The solid capital base at US$1,911.2 million continues to be a major competitive advantage for the corporation and a strong foundation for future growth. GIC’s superior financial strength is reflected in the healthy risk based capital ratios, with Tier I ratio reaching 20.9% and Total capital ratio of 22.1% computed as per Basel II guidelines.
The Corporation, with an authorized capital of US$ 2.1 billion, continues to be one of the most strongly capitalized financial institutions within the region. Gulf Investment Corporation is a leading regional financial institution that was established under the auspices of the Gulf Cooperation Council and is equally owned by the six member states of the Council: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
