The National Investments Company held Financial Analysts Conference for its H1 2022 results on Tuesday, 9 August 2022; the conference witnessed the positive participation of Mr. Girish Nair, NIC’s Chief Financial Officer, Mr. Bashar Khan, Senior Vice President – Investment Banking Sector, Mr. Al Muthana Al Maktoum, Executive Vice President – Wealth Management Sector, who presented a brief about the company and shed light on the positive financial results achieved in H1 2022, which reflect the company’s outstanding performance and solid operational achievements that led into maintaining and strengthening its financial position, high-quality assets and its ability to achieve sustained growth, this is all due to the effective strategy and its competent, experienced team.
Mr. Grish has presented a detailed report about the company’s financial position and the outstanding performance achieved up until 30 June 2022; the company has announced a net profit of KD 12 million, 15 fils per share, and another comprehensive income of KD 8.3 million through shareholders’ equity, translated into a total comprehensive income of KD 20.3 million for the second quarter, compared to KD 15.1 million generated during the same period last year, 18.9 fils per share, the other comprehensive income has reached KD 7.9 million, and the total overall income KD 23 million.
Mr. Girish added that the return on average equity and average assets reached 5.7% and 4.5%, respectively, during the first half of 2022, while the leverage ratio was only 25.4% as of June 30, 2022, and the company’s quick liquidity ratio was 46.8%.
Total assets and shareholders’ equity belonging to the parent company has increased to KD 275.9 million and KD 200.9 million, respectively, in the first half of this year, compared to KD239.5 million and KD 189.2 million at the end of the first half of 2021.
Income and Expenses Performance
Mr. Girish has highlighted the company’s performance excellence with a total income of KD 17.3 million for the first half of 2022, compared to KD 22 million achieved during the same period of 2021, which reflects a 21% decrease.
He also clarified that a critical factor behind the increase in the company’s total income in H1 2022 is the profit from financial assets at fair value through profit or loss of KD 2.7 million, dividend income of KD 7.5 million, management, brokerage, and consulting fees of KD 5.6 million, and another critical factor that contributed to other overall revenues during the first half of 2022 was the increase in the value of Kuwaiti investments priced at fair value through additional comprehensive revenues of KD 7.9 million.
Total expenses during H1 2022, including a decrease in value and allocations of KD 4.03 million, corresponds to KD 4.31 million for the comparable half of 2021. Administrative costs amounted to KD3.8 million for the current half, slightly higher than KD 3.7 million in the first half of 2021. This increase was offset by a decrease in value losses and other allocations from KD 0.2 million in 2021 to almost nothing during the first half of 2022.
Mr. Girish also noted that income from management, brokerage, and consulting fees grew by 56%, from KD3.6 million for the first half of 2021 to KD 5.6 million during the first half of this year. The growth was through brokerage income from one of our subsidiaries, Al Waseet Financial Business, which grew by 47%, and management fees from funds and portfolios that grow up by 30%; consulting costs and other revenues grew by 306%.
Total investment-owned assets have witnessed a decrease of 5% during the first half of 2022, which amounted to KD 275.9 million, compared to KD 290.6 million during the same period by the end of 2021; this is the result of a dividend of KD 35.9 million for the year 2021 of 45 fils per share.
The assets managed on behalf of other companies have increased to KD 1.13 billion as of June 30, 2022, compared to KD 1.09 billion by the end of 2021, an increase of 3.7%.
Mr. Girish added saying: “MENA’s Priced Investment Sector has benefited from capturing opportunities for company funds and customer portfolios, where the industry has developed detailed plans to take advantage of investment opportunities by transforming customer portfolios into attractive sectors across funds, portfolios, and private equity portfolios to achieve positive returns. The outstanding performance of our investment funds has enabled us to offer returns to unit owners of The Al Wataniya Fund at 6.6%, Darij Investment Fund at 5.6%, Zajil Services and Telecommunication Fund at 0.4%, and Mawarid Industrial and Petroleum Services Fund at 4.6%, and on the other hand the Market Maker service has been expanded, by adding seven new companies, bringing the total number of companies to nine.
Mr. Girish went on to say that The National Investments Company continues to provide its advisory services, which included the completion of some significant deals. The advisory group from the banking investment sector has completed two major authorizations before the IPO; the first one was for Ali Alghanim and Sons Automotive, where NIC has played the role of the coordinator and listing consultant, in addition to acting as issue manager and IPO underwriting agent for National Consumer Holding Company (NCHC), and managing the unique offering of Rai Media Group, as well as playing the investment consultant role for the merger between Boubyan Petrochemical Company and Education Holding Group, and as an investment advisor for the merger between Safa Investment Company and Cap Corp Investment Company.
The alternative investment management has also successfully invested in several funds, managed by leading international companies in the field of private investment and the field of financial and food and technology; the other fund invests in personal finance and private property, as well as a regional e-commerce platform, a delivery company, and an international clothing company while exploring new investment opportunities in the field of global real estate and direct investment openings while evaluating current investments for potential exits. (to review them)
The real estate investment sector continued to pursue domestic and foreign real estate investments through a comprehensive study of investments and assets inside and outside Kuwait and is working on developing and improving collection rates and portfolio revenues, achieving a rental collection rate of 81%, and maintaining occupancy rates at 85% in the first half of 2022.
Bashar Khan, Senior Vice President – Investment Banking Sector, said that the company’s strategy focuses on building managed assets, through the development of international real estate products and the initial focus on venture capital, in addition to obtaining excellent opportunities for joint investments, including Boursa Kuwait, Kuwait Foudary, FedEx Italia and Tiger Global. With the implementation of high-quality operations with a particular focus on medium-sized customers, we have completed many key transactions, established specialized teams in the capital markets, and completed mergers, acquisitions, and venture capital that have been identified as key growth areas for the company.
Mr. Khan commended the performance of National Investments in the initial public offering of Ali Al-Ghanim Sons Automotive Company and the pioneering role of National Investments in the public offering process, in addition to the ability of the national investments to adhere to an effective schedule and the impressive results achieved by the company, which included oversubscribing more than 11 times and the volume of demand is not The precedent, which exceeded KD one billion, and the company completed all procedures within a week of closing the subscription.
We continue to develop digital channels for the company’s customers and enhance governance.
Studies and Opportunity Acquisition
Studies have demonstrated the company’s ability to identify opportunities in the market, including acquiring a controlling stake in Boursa Kuwait in February 2019, with a 14.4% share of direct national investments since the acquisition, Boursa Kuwait’s shares were also made available for public offering and listing, and the market price today has been more than double the cost of purchase, achieving more than double gross return of 11.09 times (based on market values).
In addition to Kuwait Foudary’s study, which complies with acquiring an asset with discounted pricing with a substantial value much greater than the prevailing market value. The investment also provided a path to fair value, with a 20% stake acquired in January 2019 and actions taken to achieve fair value. Most of the equity in the transaction was restored, and the total double return based on market value was 1.27 times; as well as the study of investment in the logistics warehouse project in Italy leased to FedEx, a 15-year leasing contract was signed, and is expected to generate annual cash returns of 8% and a net internal return rate of 9% over 18 months.
Finally, investing in Pipe Technology, is a company specialized in financial technology and provides solutions to its clients who have continuous sources of income by obtaining the required capital without reducing their ownership as a result of accepting the entry of new capital into their companies or forcing them to obtain external loans.
Concluding the conference, NIC representatives confirmed that the company would communicate with its shareholders and customers, keeping them up-to-date with the latest developments NIC is witnessing through the analysts’ conference, which is held quarterly.