IHC's first-quarter net profit surges more than 63% on strong performance in key areas

Revenue during the three-month period climbed to $4.27 billion

International Holding Company has become one of the most valuable listed holding companies in the Middle East. Photo: IHC

International Holding Company, the UAE's most valuable listed company, reported a more than 63 per cent jump in its first-quarter net profit, driven by a strong performance across key business segments.

Net profit attributable to the owners of the company for the three months to the end of March reached Dh2.61 billion ($710 million), up from Dh1.6 billion in the same period last year, IHC said in a filing on Thursday to the Abu Dhabi Securities Exchange, where its shares are traded.

Revenue for the first quarter grew by 50 per cent to Dh15.7 billion ($4.27 billion).

The growth was supported by a positive performance of IHC segments including “asset management, health care, IT and communication, real estate and construction, marine and dredging, financial services, food, utilities and services”, among others, the company said.

“Our subsidiaries, in general, play a critical role in our growth business model today, and it will play an even bigger role going forward as we look to new business acquisitions and to keep on delivering value to our shareholders,” said Syed Shueb, chief executive of IHC.

“At the outset of 2023, the global economy has seen some positive signs as inflation and energy prices ease from their peak levels.

“The results showed that IHC was delivering on its promises and the first-quarter results reflected the strength and resiliency of our business in the face of global market conditions, despite a slowdown in some of the markets.”

IHC has investments in sectors including clean energy, food and agriculture, health care, real estate, information technology and artificial intelligence in 20 countries across Asia, Africa, Europe, North America and South America.

The conglomerate, whose subsidiaries include Alpha Dhabi Holding, Q Holding, International Securities, Al Seer Marine and Multiply Group, has made several strategic investments in recent quarters to further expand its asset base.

The number of its subsidiaries increased to 482 last year, from 302 in 2021.

IHC said its total assets stood at Dh217.4 billion as of March 31, while total borrowings increased by 6.5 per cent to Dh42.5 billion, “mainly due to the company's strategic investments in new businesses and organic growth”.

Looking ahead to the second quarter of 2023, IHC will also focus on developing new businesses and continue improving its business operations by integrating more technology systems and introducing AI solutions across different business verticals, according to Mr Shueb.

“The established business acquisition will continue to be one of our key growth strategies,” he said.

However, growth is expected to experience a “slower period” in the Mena region as policies tighten to fight inflation and reduce vulnerabilities while the rebuilding of buffers starts to dent economic activity in many markets, IHC said.

Meanwhile, the consolidation of Aldar through Alpha Dhabi in the second quarter of 2022 has been a major contributing factor to IHC's real estate segment growth.

And the acquisition of National Health Insurance in October last year boosted the company's financial services.

IHC has grown to become one of the most valuable listed holding companies in the Middle East, with a market capitalisation of Dh868 billion as of March 31, 2023, it said. It has also expanded into countries such as India and Turkey.

In October last year, IHC made a foray into the South American market with a Dh734 million investment in a Colombian company.

It launched a $2.1 billion bid — through its subsidiary IHC Capital — to buy a stake in Colombia's Grupo Nutresa.

In June, IHC and Abu Dhabi-listed Alpha Dhabi announced a combined $50 million investment in aerospace company SpaceX, founded by billionaire businessman Elon Musk.

The acquisition and investment momentum has continued this year.

In February, IHC acquired a 55 per cent majority stake in recruitment company Reach Employment Services in a transaction worth Dh315 million, subject to regulatory approval.