International Petroleum Investment Company (Ipic), which has merged with Mubadala Development Company to become Mubadala Investment Company, swung back into profit last year despite weaker oil prices, as margins improved and its asset impairment charges declined.
In its last annual report as a separate company, Ipic said total comprehensive income last year was US$200 million, compared with a loss of $4.1 billion in the previous year. Total profit from continuing operations was just over $400m, versus a loss of $2.6bn the previous year.
Net sales during the year declined by a little more than 6 per cent to $31bn, mainlybecause of lower oil and gas prices. But gross margins nearly quadrupled to 19 per cent, with lower feedstock prices helping to push the operating profit to $1.9bn from a $3.6bn loss the year before.
The company’s main assets are its fully owned subsidiaries Nova Chemicals; Cepsa, the Spain-based integrated oil company; a controlling interest in Borealis, an Austria-based petrochemicals company; and a nearly 25 per cent stake in Austrian oil company OMV.
It also owns nearly all of Aabar Investments, which in turn has assets in sectors ranging from aerospace to construction, commodities, financial services and real estate, and includes a controlling stake of about a third of the construction outfit Arabtec, which is one of the largest companies listed on the Dubai Financial Market.
Ipic said the total value of its assets last year declined 3.7 per cent to $54.8bn from $56.9bn, mainly because of declines in the value of some shareholdings plus foreign exchange movements.
Looking at Ipic’s major sectors, sales were down, although the bottom line improved for the main oil, gas and petrochemicals areas.
In upstream, which includes the spread of interests in oil and gasfields operated in North Africa, Eastern Europe and Latin America by Cepsa and OMV, sales were down about $2bn at just below $20bn, but profit was $581m versus a loss of $2.3bn the previous year.
In the downstream, which includes its refining interests and the Borouge petrochemicals joint venture through its Borealis shareholding, sales fell by about $600m to $11.5bn but profit was up nearly $200m at $1.9bn. Borouge ramped up last year its production at the expanded facility in Abu Dhabi’s Western region.
The improved results included a near fivefold increase in the dividend from Borealis to $190m.
Sales in the diversified interests part of the company were up nearly $900m at $2.4bn, and the loss narrowed to $1.6bn from $3.2bn.
Though Ipic is a privately held company, it has about $12bn of publicly-traded bonds, issued directly and by subsidiaries Nova and Aabar.
The company said overall net debt fell last year by about $2bn to just below $19.7bn.
In the new Mubadala Investment Company, the petroleum and petrochemicals division will be the second-largest of the four operating divisions, with its assets making up just over 31 per cent of the group’s overall assets, which stood at about $122bn when the merger was announced last summer.
In March, Mubadala Development Company said in its final annual report as a separate company that revenue last year rose 6 per cent to Dh31.5bn from Dh29.7bn, with profit up 64 per cent at Dh3.9bn.
The improved results included an immediate book profit in the 2 per cent stake it acquired last December in BP as part of a share-swap deal with the Abu Dhabi government to give the British oil major a 10 per cent stake in the emirate’s main onshore oil concession, Adco.
amcauley@thenational.ae
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