Profits at one of Kuwait's largest investment companies have fallen by almost half, another sign that the pain for regional investment companies has not yet eased. Kuwait Projects Company (Kipco) said yesterday its first-quarter net profit fell 49 per cent to 4.7 million dinars (Dh59.5m), from 9.2m dinars in the same period last year.
Kipco, with broad interests including financial services, property, technology, entertainment and private equity, is one of the most diverse investment holding companies in Kuwait. The firm said its earnings per share dropped to 4.22 fils for the first three months of this year from 8.31 fils for the corresponding period last year. Its revenue dropped to 96.7m dinars from 112.4m dinars last year.
"The drop in Kipco's profit is significant as it is unlike any other investment company in Kuwait," said Yazan Abdeen, the fund manager at ING Investment Management in Dubai. "They are exposed to equities and investments in other investment firms, so they are in an infinite loop of investing in each other." Samer Khanachet, the Kipco group chief executive, said while he thought the results were encouraging given the challenging economic conditions, he was hardly upbeat about near-term prospects.
"We remain cautious and will continue to be conservative until these early signs of recovery translate into sustained growth, which we expect by year end," Mr Khanachet said. Analysts are hesitant to make a judgement on the timing he has provided. "To make a judgement if the company will be able to turn around its profitability would be like making a judgement on growth prospects of at least five industries, due to the diversity of Kipco's exposure," Mr Abdeen said.
Kipco shares closed flat at 410 fils in a broadly positive market yesterday. They have retreated more than 25 per cent from their peak in June of last year. skhan@thenational.ae
