Amanat swings to second quarter loss on one-off provision and lower contribution from healthcare portfolio

The impact on its bottom line was partially offset by a 5.4% year-on-year increase in contributions from its education investments

Amanat, which is set to offload is holdings in Middlesex University Dubai, swung to a second-quarter loss on Tuesday. Sarah Dea / The National

Amanat Holdings, the Dubai-listed firm that invests in healthcare and education businesses, swung to a second quarter loss after lower contributions from its healthcare investments and a one-off provision affected quarterly earnings.

Net loss attributable to equity holders of the company for the three months to June 30 came in at Dh5.15 million compared to a Dh14.44m profit for the same period in 2019, the company said in a filing to the Dubai Financial Market, where its shares trade.

The company booked a one-off provision of Dh15.9m related to “aged receivables” attributed to Sukoon International, a Jeddah-based healthcare facility.

Amanat's net income for the first six months slumped to Dh586,000, from Dh35.1m a year earlier, it said. Its first-half adjusted net profit including the provision stood at Dh16.5m.

The company’s revenue increased 5 per cent year-on-year during the first half to Dh93m, but adjusted total income declined 32 per cent to Dh43m and adjusted income from investments slipped 31.4 per cent to Dh37.4m.

Amanat attributed the lower contributions to income from its healthcare portfolio to restrictions imposed due to the Covid-19 pandemic. The impact on its bottom line, however, was partially offset by a 5.4 per cent year-on-year increase in contributions from its education portfolio, the company said.

Amanat has implemented “key cost cutting and efficiency measures” across its portfolio and adopted “alternative mitigants to utilise various revenue streams and offset the financial impact over the six-month period”, its chairman, Hamad Alshamsi, said.

“These measures will not only enable our assets to weather the repercussions [of the pandemic] but will also unlock stronger profitability down the line when business returns to pre-Covid-19 levels.”

The company reported total expenses of Dh26.5m the first half of 2020, down 7.7 per cent. Its staff costs fell 19.7 per cent, while general and administrative expenses declined 2.9 per cent.

“During the second half of the year we will continue to work closely with our portfolio companies to manage the anticipated recovery post-Covid-19, which we have already begun witnessing across all our portfolio companies,” Amanat chief executive, Dr Mohamad Hamade, said.

The company is looking to use the strength of its balance sheet to “seize special situation opportunities”, he said.

In July, Amanat signed a sale and purchase agreement with Study World Education Holding Group to offload its Middlesex University Dubai campus. The company did not give a sale price or details of the planned transaction but said it would “update the market if and when there are any material developments in this regard”.

The company’s education portfolio includes school operator Taaleem, Abu Dhabi University Holding Company and Middlesex University Dubai. It also owns the property assets of the North London Collegiate School in Dubai. Its healthcare assets are spread across Saudi Arabia and Bahrain.

Amanat plans to move its headquarters to Abu Dhabi and list its shares on the Abu Dhabi Securities Exchange, it said in April.