KUWAIT: Global Investment House (“Global” or the “Company”), a regional asset management & investment banking firm headquartered in Kuwait, with offices in major capital markets in the MENA region, yesterday announced its financial results for the year ended 31 December 2015 reporting a net profit of KD6.6 million ($21.7 million) and earnings per share of 8 Kuwaiti fils.
Key points of the results:
* 2015 net profit of KD6.6 million ($21.7 million), a marginal increase over 2014 net profit of KD6.5 million ($21.4 million) despite adverse market conditions.
* 2015 revenues of KD16.4 million ($54.0 million); 75 percent are generated from fee-based businesses.
* Fee-based businesses (asset management, investment banking and brokerage) generated revenues of KD12.3 million ($40.6 million).
* Global board proposes 5 percent cash dividend (5 Kuwaiti fils per share), subject to shareholders’ and regulatory approvals.
During 2015, the Asset Management business remained resilient with KD1.1 billion of assets under management. Our asset management teams remained focused on launching products and services best suited to our clients’ investment needs offering recurring income / yield accompanied with low volatility. During the year, the Company raised approximately $160 million of new money in various strategies, including income-yielding UK real estate, cash management, listed equities and special situations assets. Several funds managed by the Company outperformed their respective benchmark indices and peers. In addition, our Special Situations Asset Management team signed a portfolio management agreement with one of the Kuwaiti banks to manage its portfolio of special situation assets worth $34 million.
During 2015, the Investment Banking team generated revenues from 11 different mandates, ranging from advisory to M&A mandates, 4 of which were successfully closed during the year. The team is currently working on several mandates and has an interesting pipeline of M&A and equity capital markets mandates.
On the brokerage front, Global made focused efforts to grow the institutional brokerage business leading to gains in Kuwait market share. However, due to decline in the market turnover in most key markets where Global operates, the brokerage revenues declined.
Regional operations continue to contribute to the Company’s business by enhancing our client base, raising new money and deal sourcing. Early 2015, Global inaugurated its Dubai International Financial Centre (“DIFC”) operations to strengthen its presence in one of the major capital markets in the region. Global Saudi, with assets under management of $169 million, remains one of the largest non-bank asset managers in the Kingdom of Saudi Arabia and its flagship fund continued to outperform its benchmark.
The Company’s continuous efforts to control and rationalize its cost base resulted in reducing our operating cost base from KD14.8mn ($48.6 million) in 2014 to KD13.3 million ($43.9 million) in 2015. Global has a healthy capital structure, conservatively deployed primarily in liquid and operating assets with no external debt and a capital base of KD90.5 million ($297.8 million).
The board proposes a 5 percent cash dividend (5 Kuwaiti fils per share), subject to shareholders’ and regulatory approvals, amounting to KD3.9 million ($12.9 million). Commenting on the results, Ibrahim Saad, Chairman of the Board, said: “Global has achieved significant growth in net profit for the third consecutive year, thanks to its management’s efforts in implementing the Company’s strategy of growing its core businesses while minimizing risk. We are delighted by these excellent financial results, which were generated during difficult times for the capital markets and the investment services industry. Good operating performance and an excellent capital structure have facilitated the Board’s decision to recommend a distribution of a cash dividend to shareholders at levels consistent with the previous year.”
Maha Al-Ghunaim, Vice Chairman & Group CEO, said: “Despite the extremely volatile and challenging times, we successfully widened our client base, enhanced our product offering, signed new mandates, raised new money and maintained our profitability momentum. Furthermore, we reduced our operating costs by 10 percent in spite of expanded business activities. Being a MENA player, Global cannot be isolated from the regional headwinds; however, we remain committed to continue creating value to all our stakeholders, through our resilient and robust fee-based business model, innovative strategies and execution capabilities.”