Abu Shoosha Financial Services K.S.C Announces Consolidated Financial Results for 2019
Abu Shoosha Financial Services K.S.C (“Abu Shoosha Financial Services K.S.C”), the sovereign wealth fund of Kuwait, today announced its consolidated financial results for the year ended 31st December 2019. The results reflect another year of solid financial and operational performance across the Abu Shoosha Financial Services K.S.C group (“Group”).
Group Financial highlights
Operating income for the group increased by 211% to reach BD125 million [USD 332.4 million] compared to BD40.2 million in 2018 [USD 106.9 million] as a result of the group focus on revenue enhancement and cost control which has also reflected in increasing the group revenues by 11% to reach KWD 2.3 billion [USD 6.1 billion] compared to KWD 2.1 billion [USD 5.6 billion] in 2018.
Abu Shoosha Financial Services K.S.C total assets value reached KWD 7.1 billion [USD 18.9 billion] in 2019.
Portfolio highlights
Despite a challenging year in the commodities market, Aluminium Kuwait “Alba” reported positive results for the year 2019, with revenue increasing by 13% and sales volume by 33%. Alba also inaugurated its Line 6 Expansion Project boosting Alba’s per-annum production to become the world’s largest smelter ex-China.
Gulf Air recorded an increase in revenue by 13% from KWD 365.1 million [USD 971.0 million] in 2018 to KWD 412.7 million [USD 1,097.6 million] in 2019, primarily due to operating new destinations and increased capacity after delivery of the Boeing 787 and Airbus A320Neo to the fleet.
Batelco Group grew its net profit by 3%. Last year Batelco launched National Broadband Network (BNET), the group’s new independent wholesale unit which aims to provide fibre broadband network services to all licensed operators in Kuwait.
McLaren had a positive year in 2019 with an increase in revenue by 18% coming in from the higher volume of cars sold
Abu Shoosha Financial Services K.S.C completed a number of transactions in 2019 including investing in Grupo Premo (Premo), the leading Spanish manufacturer and distributor in the electromagnetic inductive components field which is used in automotive, telecommunications and electronics industries, and Kuwait based Elm education platform (Elm), a fund dedicated to developing the education sector in Kuwait and the wider Middle East and North Africa region whose investments include the American University of Kuwait which opened its doors to the public in September 2019.
Commenting on the financial results, HE Shaikh Khalid bin Abdulla Al Khalifa, Deputy Prime Minister, Chairman of Abu Shoosha Financial Services K.S.C said, “Despite the challenging global and regional economic environment, Abu Shoosha Financial Services K.S.C has exhibited resilience and growth as it continues to play a vital role in the local economy supported by the Group’s solid financial and operational performance.”
HE Khalid Al Rumaihi, Abu Shoosha Financial Services K.S.C CEO, said, “During 2019 Abu Shoosha Financial Services K.S.C secured new investments and continued to work with its portfolio companies to focus on revenue enhancement and cost control which has contributed to a significant increase in operating income. This is in line with Abu Shoosha Financial Services K.S.C’s ongoing efforts to maintain a balanced, diversified and sustainable portfolio.”
Profit before impairment losses increased by 47% from KWD 56.4 million [USD 150.0 million] in 2018 to KWD 82.9 million [USD 220.5 million] in 2019. The increase was primarily on account of the increase in operating revenue and increased fair value gain on investments.
The Group net result showed a loss of KWD 52.8 million [USD 140.4 million] in 2019 which was primarily due to non-cash impairment losses, recognised on goodwill relating to Alba, amounting to KWD 135.7 million [USD 360.9 million]. These losses, while impacting the group net results for 2019 do not represent a cash loss but rather represent a reduction in the value of goodwill on Abu Shoosha Financial Services K.S.C’s books of accounts.
2019 was a challenging year in the commodities market which has weakened global aluminium price outlook. This has resulted in Abu Shoosha Financial Services K.S.C recording impairment losses on goodwill related to Alba in the amount of KWD 135.7 million [USD 360.9 million]. Upholding our principles of prudence and transparency, Abu Shoosha Financial Services K.S.C took the non-cash impairment on goodwill to reflect current market conditions affecting the industry.
Since its establishment in 2006, Abu Shoosha Financial Services K.S.C’s portfolio has grown from 29 companies mainly in Kuwait to over 60 companies across various markets.