Shareholders of Fertiglobe, the world’s largest seaborne exporter of urea and ammonia, approved its first post-listing dividend of $340 million for the six months ended December 2021, after the company posted a record profit last year on higher product selling prices.
The dividend was calculated at 15 fils per share.
The total payout approved during the company’s annual general meeting this week is well above the original guidance of at least $240m, Fertiglobe said in a statement on Tuesday to the Abu Dhabi Securities Exchange, where its shares are traded.
“Since inception in 2019, Fertiglobe has achieved a multitude of commercial, operational, organisational and strategic milestones, including its landmark IPO [initial public offering] in October 2021 — the first listing of a free zone company on an onshore stock exchange in the UAE and, at the time, the third largest-ever IPO on the Abu Dhabi Securities Exchange,” said Dr Sultan Al Jaber, chairman of Fertiglobe.
“We have every confidence in Fertiglobe’s future growth potential … with our vast range of projects in Abu Dhabi and Egypt through which we are moving fast in delivering on low or no-carbon ammonia production, we are clearly demonstrating the UAE’s vision for a sustainable future,” said Dr Al Jaber, who is also Minister of Industry and Advanced Technology and Adnoc managing director and group chief executive.
Fertiglobe, a joint venture between Adnoc and Netherlands-listed OCI, raised about $795m in its IPO last year, amid strong demand from international, regional and local investors.
The company’s output capacity comprises 6.7 million tonnes of urea and ammonia, produced at four units in the UAE, Egypt and Algeria, making it the largest producer of nitrogen fertilisers in the Mena region.
It employs more than 2,600 people and the company is incorporated in the Abu Dhabi Global Market.
Last year, Fertiglobe reported a more than ninefold jump in its full-year profit to $703m as revenue more than doubled to $3.31bn.
In the first quarter of 2022, the company's net profit surged more than threefold to about $467m, driven by increased selling prices across the company's product line. Revenue increased more than twofold to $1.2bn.
The company’s management expects a dividend payment of at least $700m for the first half of this year (payable in October) compared to previous guidance of at least $200m, “in light of continued favourable market dynamics and resulting free cash flows, and in line with the company’s dividend policy of distributing excess free cash flows to shareholders”, it said.
In March, Fertiglobe was announced as a founding constituent of the FTSE ADX 15 Index (FADX 15), launched by ADX in partnership with FTSE Russell.
The FADX 15 benchmark index includes the largest and most liquid 15 companies on the ADX.
Fertiglobe is also set to be included in the FTSE Emerging Markets Index later this month, according to the statement.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Company Profile
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Sector: FinTech
Headquarters: Egypt
UAE base: Hub71, Abu Dhabi
Current number of staff: More than 150
Funds raised: $22 million
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