Multiply Group second-quarter profit soars on strong performance of key businesses

The Abu Dhabi-based company reaped Dh507m in revenue in the first half of 2022

Samia Bouazza, chief executive of Multiply Group. Photo: Multiply Group

Abu Dhabi-based Multiply Group has said its second-quarter profit soared, compared to the same period a year earlier, as all its operating units related to media and communications, utilities, ventures, wellness and beauty, and digital economy recorded healthy growth.

Net profit attributable to the owners of the company shot to Dh98.71 million ($26.83m) in the second quarter from Dh156,000 in the same period last year, the company said in a statement on Thursday to the Abu Dhabi Securities Exchange, where its shares are traded.

The technology-focused investment holding company's revenue during the quarter reached Dh266m, compared with Dh4.8m in the same period last year.

The group's half-year revenue surged to Dh507m compared with Dh8.44m in the corresponding quarter in 2021.

Multiply Group's net profit attributable to shareholders in the first six months of the year was Dh389m with investment and other income of Dh300m boosting profits further.

"Our subsidiaries continued to register robust growth. Most of our portfolio companies have exceeded their targets in terms of operational performance", Samia Bouazza, chief executive of Multiply Group, told The National in a phone interview.

Despite the continuing global economic headwinds, Ms Bouazza said, the performance of all five verticals have been resilient during the first six months of this year.

“We have seen strong organic growth within our portfolio companies. Our performance as a group was very positive, supported by investment decisions that proved to be profitable with above average return on investments,” she said.

Multiply Group earned a gross margin of Dh250m in the first half of 2022 and continues to benefit from a strong liquidity position, with Dh3.24bn in cash and bank balances and negligible debt.

The strong cash balances will aid the group to pursue attractive investment targets globally and ensure an efficient deployment of capital, striking the balance between steady companies that generate recurring income and high-growth businesses, Ms Bouazza said.

"We will use our strong cash base to seek opportunistic deals amid softening valuations on public equities or private companies with very strong fundamentals”, she said, adding that the group is "region-agnostic" in its investment plans and is open to opportunities locally, regionally and globally.

"In addition to new acquisitions, the group plans to enhance synergies and cost savings across our businesses through operational excellence and digital transformation programmes," she said.

With a strong pipeline of potential investments, Multiply Group expects its profitability to significantly accelerate during the rest of 2022.

The company, a subsidiary of International Holding Company, acquired stakes in Emirates Driving Company, Omorfia Group, Viola Communications, Firefly and Yieldmo in 2021.

The group made significant investments in the first half of 2022. In January, it invested Dh92m in Rihanna’s Savage X Fenty, a direct-to-consumer e-commerce fashion company.

In April, Multiply Group invested Dh367m as a cornerstone investor in the initial public offering of Dubai Electricity and Water Authority, one of the region’s fully integrated utility companies. This was followed by Dh183.75m investment in the IPO of Borouge in May, also as a cornerstone investor.

"Our outlook for the rest of the year is very positive, and we expect our profitability to accelerate based on the group's strong operating performance, the current growth of the subsidiaries and [a] strong pipeline of potential investments", Ms Bouazza said.

"Despite the global headwinds, current economic conditions in the UAE are very supportive to the growth of the groups’ businesses."

The UAE economy is set to post its strongest annual expansion since 2011 after it grew 8.2 per cent in the first quarter of this year, on the back of higher oil prices and measures to mitigate the impact of the Covid-19 pandemic, the Central Bank of the UAE said last week.

The Arab world’s second-largest economy, which expanded 3.8 per cent in 2021, is expected to grow 5.4 per cent and 4.2 per cent in 2022 and 2023, respectively, according to the latest projections by the banking regulator.