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The project will remain on hold until corrective measures are implemented
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Mubadala H1 Net Profit Dives 38pc
ABU DHABI — Mubadala Development Company, or Mubadala, the investment arm of Abu Dhabi Government, reported a 38 per cent fall in net profit to Dh737.7 million in the first half of 2009, as it suffered impairment losses totalling Dh756.71 million.
However, the investment company, which is mandated to diversify and transform Abu Dhabi’s economy, showed a whopping 450 per cent increase in its total income to Dh2.7 billion in the “challenging” economic environment” of the first half.
The company, which has interests in Ferrari, GE and chip maker AMD, said that “it will not have any significant liquidity risk in achieving its growth plan.” The group has existing undrawn facilities with banks to meet its budgetary requirements of certain projects, it said.
The group‘s strategy is to address its liquidity risks and obtain funding for its growth and in this regard the government of Abu Dhabi has so far contributed Dh8.75 billion till June 30, 2009, out of an approved budgeted contribution of upto Dh21 billion for the year, the financial statement of the company said.
The total assets rose to Dh79.40 billion at the end of June 30, 2009, from Dh 21.6 billion a year ago. Total debt enlarged to Dh23.3 billion, while total equity increased to Dh42.7 billion, showing an increase of 36 per cent.
Mubadala said that it expects assets to grow as it continues to invest in Abu Dhabi and the region.
“We expect this number to continue rising as we actively seek investments,” Waleed Al Muhairi, chief operating officer said in a conference call on Monday, indicating that investments would continue in Abu Dhabi and the Middle East & North Africa region.
“Assets under management reflect capital deployment and inbuilt growth,” he said, declining to provide figures.
Mubadala has no plans for any major corporate borrowing during this year, he said, adding that if at all there may be small borrowings that could be through private placements.
In April, Mubadala established a lobal medium term note programme targeting global fixed income investors and issued $1.25 billion of five-year, and $500 million of 10-year, senior unsecured bonds based on a $9.3 billion order book.
In a presentation posted on its Website, Mubadala said it increased its shareholding to 70 per cent from 40 per cent in SR Technicsis, a leading provider of technical solutions in airframes, components and engines.
Mubadala is developing a composite aero structures manufacturing business called Strata in partnership with leading aerospace companies EADS, Airbus, FACC and AleniaAeronauticas.
The company has formed a global commercial finance joint venture with GE Capital to access investment opportunities generated through GE’s existing global origination platform in order to build a MENA platform for mutual benefit.
Mubadala accumulated almost 66 million shares in GE during the period ending June 30, 2009, becoming a top ten shareholder, the presentation said. — haseebhaider@khaleejtimes.com
· with inputs from agencies
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