Aabar puts quarterly profit at Dh1.57bn

Aabar Investments reported profit of Dh1.57 billion (US$427 million) for the first quarter on gains from derivatives and foreign currency transactions.

Aabar Investments, which owns stakes in the car maker Daimler and the space tourism venture Virgin Galactic, has reported first-quarter profit of Dh1.57 billion (US$427 million) on gains from derivatives and currency transactions. The figures did not factor in a Dh2.47bn "loss in investments carried at fair value through other comprehensive income", which led to an overall loss of Dh959.6m, Aabar's financial statements show.

The loss was mitigated by a Dh1.2bn gain from hedges against its investments and a Dh606.4m boost from foreign exchange transactions, the statements show. "The euro has dropped but Daimler has risen sharply as investors have piled into German exporters on euro weakness," Akram Annous, a deputy fund manager at Al Mal Capital, said in a note to investors. "This trade is now working in Aabar's favour as their euro debt liabilities continue to fall."

Shareholder equity - an important measure of the valuation of investment companies - declined by 7.6 per cent to Dh11.69bn in the first quarter, from Dh12.65bn in the same period last year. "Aabar remains confident of its strategy to focus on its chosen investments sectors and to continue to focus on creating value for all its shareholders," said Mohammed Hamad al Mehairi, an Aabar board member. "It also aims to build partnerships and create synergies for the long term among the various members of the Aabar group."

Aabar also restated its earnings for the first quarter of last year after "management identified errors in the classification of an investment, arising from the misinterpretation of fundamental facts", the company's financial statements said. The change resulted in its Dh177m profit for the first quarter of last year now booked as a Dh1.22bn loss, it said. Last week, Aabar said its board agreed to sell Dh1.5bn of convertible bonds to International Petroleum Investment Company (IPIC), its parent company, at a price of Dh2.50 per share. IPIC owns 71 per cent of Aabar.

Aabar's shared closed at Dh2.10 yesterday, an increase of 1.4 per cent from Thursday. [e-mail]