Waha Capital's profit falls on AerCap adjustment

But the Abu Dhabi-listed firm sees gains in income from investment in quarter

Waha Capital chief executive Salem Al Noaimi. Delores Johnson / The National

Waha Capital, an Abu Dhabi-based investment firm, said second-quarter net income fell 36 per cent, dragged down by an adjustment of Dh66.6 million against the share of income from the New York-listed airline leasing company AerCap Holdings in which it has a stake.

Net profit in the three months ended June decreased to Dh95.6m compared with Dh130m in the year-earlier period, the company said. Income from financial investments rose 39 per cent to 99.7m in the second quarter from Dh60.4m in the same period last year.

"Our principal investments portfolio remains solid, with income only down because of an accounting treatment of our stake in AerCap, despite the company's strong financial and operational performance this year," said Salem Rashid Al Noaimi, the chief executive and managing director of Waha Capital.

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The Abu Dhabi-listed firm said total income in the quarter slipped to Dh287.7m compared with Dh288.8m last year, while total expenses rose 12 per cent to Dh182m from Dh162.4m in the corresponding period last year.

The company did, however, see a sharp rise in income from financial investments but overall total income fell and total expenses rose during the quarter. The reassessment of AerCap was due to the company's share price trading at a lower multiple over a prolonged period.

Some of Waha's investments locally in the second quarter were impacted by a slowdown in the economy. The firm said that a decline in the healthcare business led to a 4.7 per cent drop in revenues from the sale of goods and services to Dh166.7m versus Dh174.9m in the same period last year.

The bright spot for Waha Capital in its earnings came from its equity and fixed income portfolio business. In the first half of the year, income from capital markets increased 10 per cent year-on-year to Dh176.7m. The firm said it was trying to grow its assets under management, which currently stand at Dh1.8b, by marketing its funds to third-party investors.

"Waha Capital's robust balance sheet, including a healthy cash position, means that we are well positioned to move ahead with our strategy to grow our asset management business and to deploy additional capital through our principal investments divisions," said Mr Al Noaimi.