By Ulf Laessing
Kuwaiti firm boosts Q3 net income to $93.2mn after selling stake in Jordan Kuwait Bank.
Gulf investment firm Kuwait Projects Co. (KIPCO) boosted third-quarter net profit by 45.22 percent after its key banking unit sold a stake and its core operations mitigated the global financial crisis.
Kuwait's biggest investment firm by market value, which owns stakes in 50 companies and operates in 21 countries, said in a statement on Saturday quarterly profit rose to 25.05 million dinars ($93.23 million), or 22.46 fils per share, compared with 17.25 million dinars, or 15.41 fils per share a year earlier.
Profit excluded one-off gains from the sale of its stake in National Mobile Telecommunications Co. (Wataniya) for $3.72 billion last year, which had driven up earnings.
In July, KIPCO's Bahraini investment bank United Gulf Bank said it would book profit before expenses of almost $280 million in the third quarter from selling a 43.86 percent stake in Jordan Kuwait Bank. Its quarterly profit jumped 10-fold.
"Despite the turbulence in the world's financial markets, our core operating companies have continued to deliver the kind of performance we have come to expect from them," Chief Executive Faisal Al-Ayyar said in a statement, without giving details.
He said holdings of KIPCO, whose core units are retail banks such as Kuwaiti lender Burgan Bank, asset management firms and investment banks apart from media businesses, were diversified enough to resist current global market turmoil.
But KIPCO spokesman Rob Hipkins declined to comment on whether the company stood by its 2008 forecast of net profit reaching between 105 million and 110 million dinars.
Revenues rose by 44.29 percent to 120.21 million dinars in the third quarter, KIPCO said. Assets advanced to 5.3 billion dinars, compared to 4.83 billion dinars at the end of June despite Gulf and most global markets taking a hit recently.
Like smaller local rival Investment Dar, KIPCO has been expanding outside of Kuwait to diversify its revenue sources.
KIPCO has said it wants to set up units for commercial banking and investment banking as part of plans to expand outside of a home market where competition is intensifying.
Burgan Bank said in May it had agreed to buy foreign assets worth 194 million dinars from United Gulf Bank. KIPCO also wants to set up a Middle East pensions firm and could sell global depositary receipts (GDRs) worth up to $1 billion to finance its expansion, Al-Ayyar told newswire Reuters in June.
KIPCO shares are up 12.50 percent this year, outperforming the main Kuwait benchmark which fell about 8 percent. (Reuters)