Kuwait Times, Tuesday, Aug 16, 2022 | Muharram 18, 1444
NIC holds financial analysts conference for H1 2022 results
Kuwait:
The National Investments Company held Financial Analysts Conference for its H1
2022 results on 9 August, 2022. The conference witnessed the positive
participation of Girish Nair, NIC’s Chief Financial Officer, Bashar Khan, Senior
Vice President – Investment Banking Sector, Al-Muthana Al-Maktoum, Executive
Vice President – Wealth Management Sector, who presented a brief about the
company and shed light on the positive financial results achieved in H1 2022.
The results reflect the company’s outstanding performance and solid operational
achievements that led into maintaining and strengthening its financial position,
high-quality assets and its ability to achieve sustained growth. This is all due
to the effective strategy and its competent and experienced team.
Financial position
Grish has presented a detailed report about the company’s financial position and
the outstanding performance achieved up until 30 June 2022. The company has
announced a net profit of KD 12 million, 15 fils per share, and another
comprehensive income of KD 8.3 million through shareholders’ equity, translated
into a total comprehensive income of KD 20.3 million for the second quarter,
compared to KD 15.1 million generated during the same period last year, 18.9fils
per share. The other comprehensive income has reached KD 7.9 million with the
total overall income reaching KD 23 million.
Girish added that the return on average equity and average assets reached 5.7
percent and 4.5 percent, respectively, during the first half of 2022, while the
leverage ratio was only 25.4 percent as of June 30, 2022, and the company’s
quick liquidity ratio was 46.8 percent.
Total assets and shareholders’ equity belonging to the parent company has
increased to KD 275.9 million and KD 200.9 million, respectively, in the first
half of this year, compared to KD 239.5 million and KD 189.2 million at the end
of the first half of 2021.
Income and expenses performance
Girish has highlighted the company’s performance excellence with a total income
of KD 17.3 million for the first half of 2022, compared to KD 22 million
achieved during the same period of 2021, which reflects a 21 percent decrease.
He also clarified that a critical factor behind the increase in the company’s
total income in H1 2022 is the profit from financial assets at fair value
through profit or loss of KD 2.7 million, dividend income of KD 7.5 million,
management, brokerage, and consulting fees of KD 5.6 million, and another
critical factor that contributed to other overall revenues during the first half
of 2022 was the increase in the value of Kuwaiti investments priced at fair
value through additional comprehensive revenues of KD 7.9 million.
Total expenses during H1 2022, including a decrease in value and allocations of
KD 4.03 million, corresponds to KD 4.31 million for the comparable half of 2021.
Administrative costs amounted to KD 3.8 million for the current half, slightly
higher than KD 3.7 million in the first half of 2021. This increase was offset
by a decrease in value losses and other allocations from KD 0.2 million in 2021
to almost nothing during the first half of 2022.
Girish also noted that income from management, brokerage, and consulting fees
grew by 56 percent, from KD 3.6 million for the first half of 2021 to KD 5.6
million during the first half of this year. The growth was through brokerage
income from one of our subsidiaries, Al-Waseet Financial Business, which grew by
47 percent, and management fees from funds and portfolios that grow up by 30
percent; consulting costs and other revenues grew by 306 percent.
Total investment-owned assets have witnessed a decrease of 5 percent during the
first half of 2022, which amounted to KD 275.9million, compared to KD 290.6
million during the same period by the end of 2021; this is the result of a
dividend of KD 35.9 million for the year 2021 of 45 fils per share. The assets
managed on behalf of other companies have increased to KD1.13 billion as of June
30, 2022, compared to KD1.09 billion by the end of 2021, an increase of 3.7
percent.
Key events
Girish added saying: “MENA’s Priced Investment Sector has benefited from
capturing opportunities for company funds and customer portfolios, where the
industry has developed detailed plans to take advantage of investment
opportunities by transforming customer portfolios into attractive sectors across
funds, portfolios, and private equity portfolios to achieve positive returns.
The outstanding performance of our investment funds has enabled us to offer
returns to unit owners of The Al-Wataniya Fund at 6.6 percent, Darij Investment
Fund at 5.6 percent, Zajil Services and Telecommunication Fund at 0.4 percent,
and Mawarid Industrial and Petroleum Services Fund at 4.6 percent, and on the
other hand the Market Maker service has been expanded, by adding seven new
companies, bringing the total number of companies to nine.
Girish went on to say that The National Investments Company continues to provide
its advisory services, which included the completion of some significant deals.
The advisory group from the banking investment sector has completed two major
authorizations before the IPO; the first one was for Ali Alghanim and Sons
Automotive, where NIC has played the role of the coordinator and listing
consultant, in addition to acting as issue manager and IPO underwriting agent
for National Consumer Holding Company (NCHC), and managing the unique offering
of Rai Media Group, as well as playing the investment consultant role for the
merger between Boubyan Petrochemical Company and Education Holding Group, and as
an investment advisor for the merger between Safa Investment Company and Cap
Corp Investment Company.
The alternative investment management has also successfully invested in several
funds, managed by leading international companies in the field of private
investment and the field of financial and food and technology; the other fund
invests in personal finance and private property, as well as a regional
e-commerce platform, a delivery company, and an international clothing company
while exploring new investment opportunities in the field of global real estate
and direct investment openings while evaluating current investments for
potential exits.
The real estate investment sector continued to pursue domestic and foreign real
estate investments through a comprehensive study of investments and assets
inside and outside Kuwait and is working on developing and improving collection
rates and portfolio revenues, achieving a rental collection rate of 81 percent,
and maintaining occupancy rates at85 percent in the first half of 2022.
Considerate plans
Bashar Khan, Senior Vice President – Investment Banking Sector, said that the
company’s strategy focuses on building managed assets, through the development
of international real estate products and the initial focus on venture capital,
in addition to obtaining excellent opportunities for joint investments,
including Boursa Kuwait, Kuwait Foudary, FedEx Italia and Tiger Global. With the
implementation of high-quality operations with a particular focus on
medium-sized customers, we have completed many key transactions, established
specialized teams in the capital markets, and completed mergers, acquisitions,
and venture capital that have been identified as key growth areas for the
company.
Khan commended the performance of National Investments in the initial public
offering of Ali Al-Ghanim Sons Automotive Company and the pioneering role of
National Investments in the public offering process, in addition to the ability
of the national investments to adhere to an effective schedule and the
impressive results achieved by the company, which included oversubscribing more
than 11 times and the volume of demand is not The precedent, which exceeded KD 1
billion, and the company completed all procedures within a week of closing the
subscription. We continue to develop digital channels for the company’s
customers and enhance governance.
Studies and opportunity acquisition
Studies have demonstrated the company’s ability to identify opportunities in the
market, including acquiring a controlling stake in Boursa Kuwait in February
2019, with a 14.4 percent share of direct national investments since the
acquisition, Boursa Kuwait’s shares were also made available for public offering
and listing, and the market price today has been more than double the cost of
purchase, achieving more than double gross return of 11.09 times (based on
market values).
In addition to Kuwait Foudary’s study, which complies with acquiring an asset
with discounted pricing with a substantial value much greater than the
prevailing market value. The investment also provided a path to fair value, with
a 20 percent stake acquired in January 2019 and actions taken to achieve fair
value. Most of the equity in the transaction was restored, and the total double
return based on market value was 1.27 times; as well as the study of investment
in the logistics warehouse project in Italy leased to FedEx, a 15-year leasing
contract was signed, and is expected to generate annual cash returns of 8
percent and a net internal return rate of 9 percent over 18 months.
Finally, investing in Pipe Technology, is a company specialized in financial
technology and provides solutions to its clients who have continuous sources of
income by obtaining the required capital without reducing their ownership as a
result of accepting the entry of new capital into their companies or forcing
them to obtain external loans.
Concluding the conference, NIC representatives confirmed that the company would
communicate with its shareholders and customers, keeping them up-to-date with
the latest developments NIC is witnessing through the analysts’ conference,
which is held quarterly.