Bahrain's GFH full-year profit rises as revenues surge

The company’s board recommended the distribution of 8.71 per cent dividend for 2018

Bahrain-based GFH acquired 12 US hotels in a joint venture deal as the company continues to expand in the country. Reuters

GFH Financial Group, the sharia-compliant investment company based in Bahrain, reported a 9.5 per cent rise in its the full-year 2018 profit driven by contribution from business lines and strategic transactions during the year.

The investment bank said profit for the year climbed to $114.1 million (Dh419m), according to a statement on Tuesday to the Dubai Financial Market, where its shares are traded. GFH group’s total consolidated annual revenue climbed 20.5 per cent to $246.2m at the end of 2018.

“This marks the fourth consecutive year of solid gains based on the effective implementation of our strategy and success in the further diversification of the business,” said Jassim Alseddiqi, chairman of GFH. “Among the strongest measures of market confidence in GFH today and over the past year was the raising of more than $1 billion through our investment products and treasury and capital markets during 2018, which fuels further growth and investment for GFH in 2019.”

The company’s board recommended the distribution of a dividend of 8.71 per cent which equals to $30m cash and $55m in bonus shares for 2018 to shareholders. Total equity attributable to shareholders in 2018 declined to $1.06bn, a 7.9 per cent drop due to share buyback plan exercised by the group.

Its total operating expenses for the year also climbed to $117.19m from $99.1m at the end of 2017, it noted.

The investment bank said fourth-quarter 2018 net profit dipped 37.2 per cent despite a rise in revenues for the period. Net profit attributable to shareholders in the three months to the end of December reached $10.64m.

In October, the Manama-headquartered company received "conditional approval" from the central bank on an offer to sell its real estate portfolio for $1bn. It expects to receive an upfront payment ranging from $259m to $380m, with the remainder based on a joint development agreement over five years, the company said in a statement at the time.

In May, the company acquired 85 per cent of UAE retail app, The Entertainer, through a deal which gives GFH about 5 to 10 per cent control. GFH will invest up to $150m in The Entertainer throughout the holding period.