Mubadala reports profit hike post IPIC merger

Financial results for the first half of the year show uplift since 2016 dip
Mubadala reports profit hike post IPIC merger
Abu Dhabi’s state sovereign wealth fund Mubadala Investment Company has reported a net profit of AED4.2 billion ($1.14 billion) for the first half of 2017.
By Sarah Townsend
Thu 28 Sep 2017 12:57 PM

Abu Dhabi’s state sovereign wealth fund Mubadala Investment Company has reported a net profit of AED4.2 billion ($1.14 billion) for the first half of 2017.

This compares with a net loss of AED4.7 billion in the first half of 2016, which the company attributed at the time to a fall in the market value of some of its assets.

In its first combined financial results since its merger with Abu Dhabi’s International Petroleum Investment Company (IPIC) in January, Mubadala also reported a total comprehensive income of AED6.8 billion ($1.85 billion) for H1 2017, compared to a loss of AED5.4 billion ($1.46 billion) for the same period the previous year.

Revenues were up 14 percent to AED83.4 billion ($22.7 billion) over the period, from AED72.9 billion in 2016 – “due to strong performance and higher revenues across Mubadala’s four investment platforms”, the company said.

It added that the primary drivers were the upstream and integrated oil and gas, semiconductors and aerospace sectors.

Operating income was also up post-merger, to AED5.5 billion compared to AED3.3 billion in 2016, driven by petrochemicals and refining, defense services and aluminium manufacturing.

The merger with IPIC earlier this year created a $125 billion mega-fund that commenced operations in May. Mubadala said this week that total assets were up in H1 2017 due to an increase in the overall value of its financial investments. Its asset base stood at AED465.5 billion compared to AED449.7 billion in the first half of 2016.

Other factors that increased the value of assets were a $2.1 billion bond raised by Nova Chemicals, utilised post-June 2017 for the acquisition of  Geismar, Louisiana Olefins plant; and dividends from financial investments, the company said.

Unlisted Mubadala has stakes in General Electric, Virgin Galactic, private equity firm Carlyle Group, Spanish energy firm Cepsa and more.

It is also building its alternative investment portfolio, having made an AED55.1 billion ($15 billion) commitment to the SoftBank Vision Fund in May to support emerging technology businesses.

Mubadala’s chief financial officer Carlos Obeid said: “In the first half of 2017, we worked to integrate the two portfolios under the Mubadala Investment Company.

“We managed our costs prudently, while monetizing mature assets and growing our profit as we reduced our overall leverage.”

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