Mubadala swings to Dh4.2bn profit in the first half of 2017

Abu Dhabi-based investment company says strong operational performance and gains on financial investment helped profitability

Mubadala Investment Company, Abu Dhabi's strategic investment company with Dh465.5 billion in assets, swung to a profit in the first half of this year on the back of strong operating income, gains from financial investments and favourable currency movements.

The company, which reported its first independent interim results after merging with International Petroleum Investment Company (Ipic), said first half profit stood at Dh4.2bn compared with a loss of Dh4.7bn in a year-earlier period, according to a statement released on Thursday.

First-half 2017 revenues climbed 14.4 per cent to Dh83.4bn from Dh72.9bn recorded for the same period in 2016, primarily driven by  the company's investment platforms including the upstream and integrated oil and gas, semiconductors, and aerospace sectors. Total assets reached Dh465.5bn as of 30 June 2017, rising 3.5 per cent from Dh449.7bn at the end of last year, helped by dividends from financial investments, the statement added.

"The results from the first half of 2017 reflect the strength and scale of Mubadala Investment Company's diversified global portfolio and robust balance sheet," said Khaldoon Al Mubarak, the group chief executive and managing director. "We will continue to integrate, optimise and grow the company's assets under our global business platforms, to create and realise maximum financial and strategic returns to support diversification of the economy of Abu Dhabi and the country."

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Mubadala Investment, whose portfolio of investments spans 13 sectors across more than 30 countries around the globe, invests primarily in sectors such as petrochemicals, petroleum, aerospace, ICT, semiconductors, metals and mining, renewable energy, healthcare and utilities. It manages diverse financial holdings and owns stakes in the local, regional and global firms including Austria's Borealis and OMV, Bahrain-based Investcorp Bank, UAE's Emirates Global Aluminium, telecom Operator Du, renewable energy firm Masdar and the country's biggest-listed contracting firm Arabtec Holding.

Mubadala Investment was formed through the merger of Mubadala Development Company and Ipic in the first half of this year to improve efficiencies and broaden its investment portfolio.

"In the first half of 2017, we worked to integrate the two portfolios under the Mubadala Investment Company," the company's chief financial officer Carlos Obeid said. "We managed our costs prudently, while monetising mature assets and growing our profit as we reduced our overall leverage."

The company, in June, sold a 40 per cent stake in Tabreed to France’s Engie for Dh2.9bn, but it still remains the largest shareholder in the UAE-based utility firm with a 42 per cent stake.

Masdar, in the first half, also reported the acquisition of a 25 per cent stake in the world’s first commercial-scale floating offshore wind farm in Hywind, Scotland in partnership with Statoil of Norway.

Mubadala Investment in May also made a Dh55.1bn commitment to the SoftBank Vision Fund, a Dh367.4bn investment vehicle that aims to acquire stakes in both private and public companies in emerging technology sector. Its financial investment arm, Mubadala Capital in April entered a deal with French private equity firm Ardian which said it would commit up to Dh9.1bn to private equity funds managed by the firm.

In petroleum and petrochemicals space,  Mubadala Investment said its subsidiary Mubadala Petroleum received all necessary approvals for the development of the Cá Rồng Đỏ (CRD) oil and gas field offshore Vietnam, which will be operated by Spain's Repsol.

Nova Chemicals, in the second-quarter of this year made an Dh7.7bn investment to acquire one of the largest petrochemical facilities in the United States, in Geismar, Louisiana, enhancing its ability to serve US and international customers. Nova and Austria's petrochemical company Borealis also signed an agreement with oil major Total for a joint venture, covering polyethylene facilities along the US Gulf Coast, it said, adding that the joint venture will encompass Total’s existing facility and investment in a new ethylene cracker and Borstar PE plant.