Mubadala Development made a loss of Dh4.2 billion (US$1.1bn) last year as the financial crisis squeezed the value of its investments around the world.
The comprehensive loss combines operating profits from its seven main industry sectors and paper losses on investments. It made a Dh338 million loss in 2010, the company said yesterday.
"While our financial investments' ... were impacted by the volatility in the global marketplace during 2011, we continue to maintain a long-term financial investment perspective," said Khaldoon Khalifa Al Mubarak, the chief executive and managing director of Mubadala, a strategic investment company owned by the Abu Dhabi Government.
A drop in the value of Mubadala's investments and a slide in property prices were the primary drivers of the latest results.
Founded a decade ago, Mubadala has grown to become a cornerstone in Abu Dhabi's efforts to diversify the economy away from oil. The company, which has stakes in global giants such as General Electric and AMD, as well as local ventures including Emirates Aluminium (Emal), is one of the few government-controlled vehicles to release audited results.
Operating income, which includes profits from businesses such as oil and gas, health care and semiconductors, was Dh1.2bn last year, down from Dh2.6bn in 2010. The decline reflected heavier investments in semiconductor manufacturing as well as spending on research and development, it said.
Rachel Ziemba, an analyst of sovereign wealth funds and Gulf economies at Roubini Global Economics, said the numbers had to be seen in the context of Mubadala's broad strategy.
"It's important to remember that it's not just about financial returns but economic returns too as Mubadala's aim is also about enabling technology transfer and strategic investments in sectors where Abu Dhabi wants to develop a presence," she said.
One of Mubadala's roles is to promote the employment of UAE nationals. Emirati women comprise about a third of the staff of Strata, an aerospace manufacturing subsidiary of Mubadala in Al Ain.
"We are quite happy with that. It demonstrates the relevance of Mubadala's double bottom line," said Waleed Al Muhairi, the chief operating officer of Mubadala, referring to its twin aims of making profits and serving the national interest.
Revenue rose by 77 per cent to Dh27.9bn last year, partly because of the consolidation of Advanced Technology Investment Company (Atic), which owns Globalfoundries, the world's third-largest maker of semiconductor chips. Atic was transferred from direct government ownership to Mubadala's stable in February last year.
Revenue growth was also driven by high energy prices, and the expansion of Strata. Sales also benefited from an increased shareholding in Tabreed, an Abu Dhabi district-cooling company.
Mubadala's total equity rose by 71 per cent to Dh106bn last year from Dh62bn the year before. The Abu Dhabi Government injected Dh28bn into Mubadala last year, up from Dh13bn the year before. The transfer of Atic added an additional Dh21bn to the firm's total equity during the year.
At the end of last year, the Executive Council approved a five-year plan for Mubadala, setting out the company's priorities up to 2016. Mr Al Muhairi declined to say how much the Government was due to inject in the company this year.
Mubadala set a capital and investment spending target of $16.3bn for last year and its outlay this year is likely to be slightly lower, said Carlos Obeid, the chief financial officer of Mubadala.
Despite last year's losses, the company is sticking to its investment strategy of scouting out opportunities in markets and sectors offering high returns.
Last month, it struck a $2bn investment deal with Brazil's EBX Group, a diversified company with interests in oil and gas, gold and other sectors.
"If we see opportunities in the US you will see us go there, if there are opportunities in Brazil, Turkey or Malaysia or wherever else, you will see us go there," said Mr Al Muhairi.
At home, Mubadala plans to transfer a 14 per cent stake in Aldar Properties to secure a Dh500m loan facility from Abu Dhabi Commercial Bank. Following that move, Mubadala will hold about 35 per cent of Aldar's shares, said Mr Obeid.
Asked about a planned merger between Aldar and Sorouh Real Estate , Mr Al Muhairi said the firm remained a "long-term investor" in Aldar and was committed to seeking ways to strengthen the capital's property market.
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