Global announces record first-half profit of KD 82 million
Net income up by 76%
Global Investment House "Global" announced today its financial results for the first-half ended 30 June 2008. Global continued on a path of excellent earnings growth with net income for the first half of 2008 rising to KD 82.2 million (USD 310.1 million), an increase of 76% against the first half 2007 net income of KD 46.7 million (USD 176.0 million). The earnings per share (EPS) rose from KD 0.051 (USD 0.19) for H1 2007 to KD 0.081 (USD 0.31).
Mrs. Maha Khaled Al-Ghunaim, the Chairperson and Managing Director, expressed her full satisfaction with the financial results achieved during the first-half of 2008. Commenting on the company’s performance and future outlook, Mrs. Al-Ghunaim said, “These results reinforce Global’s position as the GCC and wider MENA region’s leading private sector Asset Management and Investment Banking firm in terms of profitability, shareholders’ equity, market capitalization and range and quality of products and services offered. Continuous and sustainable growth in the Company’s financial performance is a direct outcome of our robust business strategies, execution capabilities and trust and support of all our stakeholders.”
During the first-half of 2008, the net operating income (total revenues) increased by 57% to reach KD 115.7 (USD 436.2) . This growth in revenues stemmed from strong performance of all the major lines of businesses namely: Asset Management, Investment Banking, Principal Investments, Real Estate and Brokerage.
During the first half Assets under Management (AUM) reached USD 9.4 billion, whereas the associated management fee recorded a 28% growth. In June 2008 the Central Bank of Bahrain approved the set-up of a USD 500 million Islamic Buyout Fund to be seeded by Global, Dubai Islamic Bank, and Millennium Capital (the investment arm of Dubai Islamic Bank). Recently we successfully closed the placement of USD 500 million for Global MENA Financial Assets Limited listed on London Stock Exchange. We also, launched second tranche of the Global GCC Real Estate Fund targeting USD 500 million of fund raising, reflecting our commitment to offering diversified array of investment opportunities to our client base and growing fee based stable revenues.
The pipeline for investment banking transactions, particularly for private placement of initial and follow-up offerings remained strong. During the first half of 2008, the investment banking fee reached all time high of KD 11.5 million (USD 43.3 million). In July 2008, we successfully concluded USD 600 million private placement for Mazya Saudi, a real estate company to operate in the Kingdom of Saudi Arabia.
Under our integrated business model, the principal investments group continued to make investments of strategic relevance, investments for geographic expansion and investments for seeding investment banking mandates and asset management products. The size of the principal investments book increased from KD 659 million (USD 2.5 billion) at 31 December 2007 to KD 968 million (USD 3.7 billion) at 30 June 2008. The annualized return of the principal investments book was in accordance with our expectations at 16.2% (2007: 18.9%).
To strengthen our brokerage pillar, we finalized the acquisition of 70.9% shareholding interest in First Brokerage Company (Al Oula Brokerage), an established brokerage firm in Kuwait with around 5% market share for a consideration of KD 21 million (USD 79 million). Global acquired this controlling stake at a PE of 11 times estimated 2008 earnings. Global also established a brokerage subsidiary in Jordan with a capital of KD 5.6 million (USD 21.2 million). The establishment of brokerage operations further strengthens Global’s market position in Jordan built over past six years through asset management and investment banking activities. These two expansions in brokerage operations take the number of markets in which Global has brokerage operations to nine. These markets include Kuwait, Bahrain, Oman and UAE in the Gulf Cooperation Council (GCC) and Egypt, Jordan, Pakistan, Sudan and Tunisia in the wider Middle East and North Africa region.
In May, Global listed its Global Depository Receipts (GDRs) on the regulated market for listed securities on the London Stock Exchange (LSE). We became the first Kuwaiti incorporated company to be listed on LSE. Global raised USD1.15 billion by issuing Global Depository Receipts. Post GDR listing, our market capitalization increased to about USD 5 billion making it one of the largest investment companies in the entire GCC and wider MENA region. The Company’s shareholders’ equity increased from KD 323.1 million (USD 1.2 billion) at 31 December 2007 to KD 690.8 million (USD 2.6 billion) at the end of 30 June 2008. Whereas, the book value per share increased from KD 0.377 (USD1.42) per share at 31 December 2007 to KD 0.534 (USD 2.01) at 30 June 2008. The increase in capital not only strengthened our capital base but also brought down our leverage from 2.1 times at the end of 2007 to 0.9 times at the end of June 2008.
Under our geographical expansion strategy, Global started its operations in Egypt in May 2008. Our strategy aims at adding value to the Egyptian capital market and economy by providing the investment community in Egypt with our core products and services in asset management, investment banking and brokerage.
In June, Global celebrated its 10th anniversary. “25 years of achievements were condensed into 10 years by Global as we simply aim to be the best”, said Mrs. Maha Al-Ghunaim.
“All of us are an integral part of this leading company, and we are all part of its ongoing success and prosperity that will continue to unfold throughout the years” said Mrs. Al-Ghunaim.
The second quarter of 2008 witnessed a number of awards presented to Global by several local, regional, and international agencies on the corporate and management level. On the corporate level it was named “Best Equity House in Kuwait” by Euromoney and “Best Investment Bank in Kuwait” for 2008 by Asiamoney.
On the management level, Mrs. Al-Ghunaim was awarded the “Banker Middle East Industry Award 2008 (BME) for her outstanding contribution to the financial industry”.
Mrs. Al-Ghunaim expressed her deep gratitude to Global’s shareholders and clients for their support, and the employees who continuously contribute to the success of Global.
