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2014 Nov 09

Waha Capital nine-month net profit increases six fold reaching AED 1.6 billion

ABU DHABI, 9 November 2014: Waha Capital PJSC, a leading investment company based in Abu Dhabi (ADX: WAHA), reported a net profit of AED 1.6 billion for the first nine months of 2014, a near six fold increase on the same period in 2013 (AED 231 million). This was largely due to a one-off gain recorded in the second quarter as the company unlocked part of the value of its stake in AerCap.

For the third quarter of 2014, the company recorded a net profit of AED 301.2 million, up from AED 107.1 million a year earlier, driven by strong contributions from the company’s stakes in AerCap Holdings NV and Dunia Finance LLC.

In the third quarter, AerCap again made a strong contribution to Waha Capital’s earnings, as the New York-listed company recorded a 117.6 percent rise in earnings per share from a year earlier, due to its acquisition in May of International Lease Finance Corporation (ILFC). The acquisition has created the world’s largest independent aircraft leasing company.

During the quarter, Waha Capital also entered into a hedging and financing transaction, as part of the company’s strategy to de-risk and to lower its cost of capital. This transaction involved hedging half of the company’s exposure to AerCap and raising approximately AED 2.1 billion (approximately US$ 575 million), which will be used to partially repay existing debt and to fund new investment opportunities.

Commenting on the latest results, His Excellency Hussain Jasim Al Nowais, Chairman of Waha Capital, said: “In recent years, we have delivered very strong return on equity, and so far this year Waha Capital’s performance has been exceptional. We are well positioned for growth and remain fully focused on creating further shareholder value and carrying out a prudent investment strategy. Thanks to an extremely strong financial base, the company is well placed to fully participate in, and benefit from, the robust economic growth in this region.”

Salem Rashid Al Noaimi, Chief Executive Officer and Managing Director of Waha Capital said: “The company has significant capital at its disposal to fund future investments. Waha Capital has demonstrated a strong track record in pursuing attractive investment opportunities and expertise in adding value. We intend to develop our platforms in the high-potential areas of energy and healthcare in the coming years, building scale organically and through select acquisitions.”

With the company reporting record earnings in the year to date, Waha Capital announced in September its intention to implement a share buy-back programme for up to 10 percent of outstanding shares, to allow its shareholders to directly benefit from the company’s continued profit generation. The programme was approved by the UAE Securities and Commodities Authority on 19 October 2014.

Waha Capital’s assets stood at AED 9.3 billion as of the end of the third quarter, compared with AED 5.2 billion as at 31 December 2013. This was mainly due to the proceeds resulting from the hedging and financing transaction on half of the company’s shares in Aercap, followed by strong performance of Waha Capital’s portfolio companies and increase in public capital markets investments.

Investments summary

AerCap, in which Waha Capital owns a 14.1 percent stake, recorded a 117.6 percent year-on-year rise in earnings per share in the third quarter, with the increase largely attributable to the company’s acquisition of ILFC.

As of 30 September 2014 the company owned, managed or was under contract to purchase a total of 1,676 aircraft, with an order book of over $25 billion.

During the third quarter, AerCap signed lease agreements for 84 aircraft, delivered 26 aircraft under contracted lease agreements, purchased nine new aircraft, and closed the sale and part-out transactions of 15 aircraft.

Dunia Finance, a UAE-based consumer finance company in which Waha Capital owns a 25 percent stake, continued to produce very strong results in the third quarter, with its loan book growing by 34 percent during this 9-month period to AED 1.4 billion, and customer deposits were up by 40 percent in the same timeframe to AED 722 million. The company had a customer base of 157,100 as at 30 September 2014.

The Anglo Arabian Healthcare (AAH) Group, which was acquired by Waha Capital in mid-2013, continued to perform well, and is considering a number of potential acquisitions and is making steady progress on its greenfield hospital and clinic projects.

Waha Capital booked a full quarter’s earnings contribution from National Petroleum Services (NPS) for the first time in the third quarter of this year, following its acquisition of a 20.56 percent stake in the company in June 2014. During the third quarter, NPS continued to position itself for long-term growth, particularly in emerging markets, and to make significant enhancements to the quality of its services. The company secured contracts worth AED 241.9 million during the third quarter, taking current contracts-in-progress to AED 2,706.8 million. Additionally, NPS invested AED 33.7 million in fixed assets in the third quarter, bringing the year to date additions up to AED 131.0 million.

Stanford Marine Group (SMG), which charters and operates offshore supply vessels (OSVs), maintained stable performance in the quarter with its fleet of 41 vessels, achieving an average utilisation rate of 91 percent. SMG took delivery of two vessels during the first nine months of the year.

The capital markets division at Waha Capital continued to develop through private transactions and increased investments in the public capital markets. The division has generated AED 235 million of revenue during the first nine months of the year.

Waha Capital’s industrial real estate development, ALMARKAZ, continued to see strong leasing demand of remaining space in Phase 1 of the development due to the project’s high-quality infrastructure, strategic location, flexibility and scale. As of the end of the third quarter, over 70 percent of the 90,000 sq. m. of Small Industrial Units (SIUs) had been leased.

Waha Capital continued to benefit from its stable investment as a sponsor and limited partner in the MENA Infrastructure Fund, a $300 million private equity infrastructure fund with assets spread across Saudi Arabia, Oman, and Egypt. Work to establish a second regional infrastructure fund continues.

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