International Holding Company (IHC) reported an almost two-fold jump in its first-quarter net income, its best result in more than seven years, and is doubling down on global investments despite the Iran war-driven uncertainty.
Profit for three months to the end of March climbed to Dh8.1 billion ($2.21 billion) from Dh4.1 billion a year earlier, the company said on Wednesday in a statement to Abu Dhabi Securities Exchange, where its shares are traded.
Net profitable attributable to owners of the company also recorded more than three fold jump to Dh5 billion. Revenue for the reporting period rose 33 per cent on an annual basis to Dh31.4 billion.
“We have grown two times on our bottom line compared to the last year of same quarter, and that tells you about the resilience we have built in the system,” chief executive and managing director Syed Basar Shueb told The National in an exclusive interview at the Make it in the Emirates event in Abu Dhabi.
“This is the diversity that IHC has built in the system. We are very happy from that point of view. Our results are amazing. It is our best quarter in the last 30.”
The Abu Dhabi-listed company, whose board is led by Sheikh Tahnoon bin Zayed, Deputy Ruler of Abu Dhabi and National Security Adviser, plans to “double down” and invest up to $8 billion in the next six months in sectors including mining, energy and financial services.
It is also exploring options to channel funds into sectors such as petrochemicals and specialised engineering as part of investment strategy, Mr Shueb said, as IHC has deployed $3.5 billion of capital so far this year.
“We continue to deploy and nothing stops us. Our plans are intact,” he said. “We are definitely, of course, more careful in our investment but we're continuing to invest.”
The Middle East conflict has tipped the region into its worst geopolitical crisis in decades. The war which began on February 28, with Israel and US bombing Iran, and Tehran lashing out at its Arab neighbours in retaliation, has disrupted business across the region.
Energy sites and civilian infrastructure have been hit by waves of Iranian drone and missile attacks but hospitality, aviation and tourism are among the sectors worst hit.
However, despite the disruption, Gulf economies are expected to grow, albeit at a slower rate, this year, the International Monetary Fund said last month.
With the Strait of Hormuz, the vital global energy and trade route, effectively closed since the start of the conflict, logistical supply chains have been disrupted severely.
However, IHC plans to channel large-scale investments into the sector to build “a local champion”.
“We believe in the logistics supply chain, we should build a large business and a local champion, which brings a lot of resilience to the system,” he said, without providing further details.
UAE's biggest company
Established in 1999, IHC is one of the most valuable holding companies in the Middle East, with a market capitalisation of about Dh860 billion as of Wednesday. IHC operates through more than 1,300 subsidiaries, with presence in technology, infrastructure, financial services and consumerism.
Companies under its umbrella include Abu Dhabi's biggest listed developer Aldar Properties, Presight, Al Seer Marine and NMDC Group.
Other sectors in which the company is looking to invest are artificial intelligence and advanced technology, Mr Shueb said.
“If you are not adopting or embracing the technology, you are basically destroying the value,” he said. “Today, we are a team of 50 people at IHC. We are not very large as a number, only 50 people … [but] we manage all these 1,400 companies through the technology ecosystem.”
Investment spree
IHC has been on an investment spree, building its portfolio across continents over the past few years.
Earlier this year, it announced plans to launch an international financial services holding company that will oversee more than Dh870 billion in assets under management.
Judan Financial Holding will be an AI-enabled platform dedicated to IHC's expanding financial portfolio.
It will consolidate the financial services assets of IHC, Alpha Dhabi, 2PointZero Group and Sirius International Holding across banking, insurance, asset management, NBFIs (non-bank financial institutions) and FinTech, subject to regulatory approval where required.
“That platform should be fully operational by third quarter. So what we're doing right now is consolidation of all our entities in the financial sector,” Mr Shueb said.
Exit strategies
IHC will also look to exit from some of its mature investments and review businesses that do not grow, for instance, if there is significant “concentration” in one sector, he said.
“We had a lot of concentration in real estate sector, not that the business was not growing, it was still growing business, but we sold. Similarly, if there is a concentration risk, we try to dilute it and the business, which we can grow. We keep on growing.”
Last year, IHC divested its entire stake in Modon Holding to avoid “overconcentration” of its portfolio.
It sold its 42.54 per cent stake in Modon, a wholly owned real estate and infrastructure development company of the Abu Dhabi government, to L’imad Holding, a major investment vehicle launched last year.
