KUWAIT CITY: Global Investment House (“Global” or the “Company”) announced its financial results for the year ended 31 December 2014 reporting a net profit of KWD6.5 million ($22.2 million), a many folds increase over 2013 which stood at KWD1.9 million ($6.3 million). Revenues grew by 72% to reach KWD22.5 million ($76.7 million).
Fee-based businesses (asset management, investment banking and brokerage) generated revenues of KWD15.2 million ($51.8 million), a 29.8% increase compared to 2013 fee-based businesses revenues of KWD11.7 million ($39.9 million). Revenues from Fee-based businesses represent 67% of the company’s revenues generated during 2014.
During 2014, the Asset Management business remained resilient with KWD1.2 billion ($4.1 billion) of assets under management. Global manages 24 funds primarily focused on the region covering multiple asset classes, like traditional equity, private equity and real estate. The Asset Management team also offers open architecture portfolio management services customized to meet the client’s investment objectives and risk appetite, and cash management services. Several funds managed by Global outperformed their respective benchmarks and peers and received industry accolades. Despite significant adverse equity markets movements in the GCC and MENA region during the last quarter of 2014, some of the Company’s flagship funds crossed the high watermark thresh-holds for incentive fee (carry) generating KWD0.8 million ($2.6 million) of incentive fee.
On the brokerage front, Global brokerage made focused efforts to grow the institutional brokerage business and consequently the research unit was integrated with the brokerage. These efforts contributed to market share gains particularly in Kuwait market.
During 2014 the Investment Banking team successfully concluded an M&A transaction for a Kuwaiti company in the financial sector and advised an industrial company in Kuwait on its KWD130 million ($443.2 million) debt restructuring. The team also signed several mandates with regional companies to provide them with financial advisory services.
During the year, the Company generated a KWD2.6 million ($8.8 million) other income. This included a KWD1.0 million ($3.4 million) income on exit of shares received in lieu of a settlement and KWD0.7 million ($2.4 million) gain on settlement of a liability and KWD0.4 million ($1.5 million) of rental and dividend income.
To facilitate the expanded business activities, the operating cost base increased by 13.4% to KWD14.8 million ($50.3 million). The Company succeeded in restricting cost increases to cost items directly linked to business generation and revenue growth.
The Company has a healthy capital structure with no external debt and a capital base of KWD87.3 million ($297.7 million). The Company’s capital is conservatively deployed primarily in liquid and operating assets.
The board of directors proposed a 5% cash dividend (5 Kuwaiti fils per share), subject to the approval of the company’s shareholders and regulators.
Commenting on the results, Ibrahim Saad, Chairman of the Board said: “Global has made significant growth in net profit and revenues, thanks to the management’s efforts in implementing the company’s strategy focusing on growing the core businesses while minimizing risk. Good operating performance and an excellent capital structure have facilitated the Board’s decision of recommending the distribution of cash dividend to shareholders”.
He added, “Fees and commissions generated by the company during the year 2014 are amongst the highest not only in the investment sector in Kuwait, but also in the region.”
Maha Al-Ghunaim, Vice Chairman & Group Chief Executive Officer said, “What distinguishes Global’s earnings during the year 2014 is the quality of its revenues generated by the fee based core businesses which represent the largest share of the revenues. This reaffirms our belief that the company is on the path of sustainable growth.”
She concluded, “Today, the company’s financial position, its regional presence and the human capital make Global well equipped to continue developing its fee based core businesses at the local and regional levels and serve its clients more effectively”.
