Mubadala reports Dh4.1bn income in 2016 as diversification pays off

Mubadala Development Company, Abu Dhabi’s strategic investment company, said total comprehensive income for last year was Dh4.1 billion, compared to a Dh1.3bn loss the year before.

In its final year reporting as an independent company before it merges with International Petroleum Investment Company (Ipic), the company said revenue last year rose to Dh31.5bn from Dh29.7bn.

The company’s diverse capital section accounted most for the improvement in profit, posting a 64 per cent increase to Dh3.9bn, with the main factors the rise in value prior to this year’s sale of one-third (45 million shares) of its stake in Advanced Micro Devices to Goldman Sachs for US$613 million, having bought the entire stake in 2007 for about $600m.The company was also able to book an immediate profit on the 2 per cent stake in BP it received – to manage on behalf of Abu Dhabi – in December in return for BP’s 10 per cent stake in Abu Dhabi’s main onshore fields. BP’s shares rose sharply from the time of transfer to the end of the year.

There were improvements in most of its main sectors, with healthcare revenue and profit growth driven by a combination of more Emiratis staying home to receive treatment, as well as rising health tourism, for Mubadala business units including Healthpoint, National Reference Lab and the diabetes centre joint venture with Imperial College, London. Healthcare revenues were up nearly 30 per cent at Dh1.4bn.

In aerospace, there was a strong performance from its TS&S maintenance, repair and overhaul (MRO) operation in Abu Dhabi, as well as Dh1bn profit booked on the sale of 80 per cent of its holding in SR Technic, an MRO based in Zur­ich that Mubadala had bought over the years since 2006. The company last summer decided to sell the SRT stake to HNA Aviation of China, which also has an option to buy the remaining 20 per cent, while TS&S has been aggressively pursuing business in Asia, winning, for example, new contracts from SriLankan Airlines.

In the technology division, which includes GlobalFoundries, one of the world’s largest chip makers, Mubadala said its loss narrowed last year to Dh1.6bn from Dh4.9bn. Revenue was up Dh1.6bn at just over Dh20bn as the company recognised the first fully year of results from its purchase, the previous year, of the IBM microelectronics business.

Revenues for the oil and gas section, which comprises mainly holdings in the Gulf of Thailand and Oman, fell by 16 per cent to Dh3.8bn as the oil price slump continued for most of last year. After the merger between Mubadala and Ipic, the new Mubadala Investment Company’s energy portfolio will grow substantially and account for about one-third of the combined company’s total portfolio of about $125bn .

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