Mumtalakat company gross profits go up 135%

Bahrain Mumtalakat Holding Company ("Mumtalakat"), the investment arm of the Kingdom of Bahrain, today announced its full year financial results for 2013.
The results reflect the solid financial and operational performance across the Mumtalakat group, constituting of 38 portfolio companies, ("Group") and demonstrate significant progress in the implementation of strategic initiatives undertaken in 2012.
Financial highlights
Gross profit up 135% to BD 109.4 million from BD 46.5 million in 2012
Operating income of BD 70.7 million, up 204% from BD 23.2 million in 2012
Net profit of BD 82.7 million, compared to a net loss of BD 181.7 million in 2012
Group revenues of BD 1.1 billion, down 5.6% on 2012
Total comprehensive income of BD 123.9 million compared to a loss of BD 156.9 million in the previous year
Total assets of BD 4.0 billion
Portfolio highlights
Gulf Air contributes to improved Group performance
Positive impact from Alba in spite of challenging market conditions
Strong contributions from Mumtalakat’s principal associate companies, including Batelco and National Bank of Bahrain
Commenting on the results, Mumtalakat’s Chief Executive Officer, Mr. Mahmood Hashim Al Kooheji, said:
"Our 2013 results reflect a positive year across the Group. The year saw us consolidate on the strategic and organisational initiatives implemented during 2012, leading to a significant increase in net profit for the year. Performance was strong across our diversified investment portfolio, with principal companies contributing positively, in spite of challenging market conditions in some sectors.
We remain committed to enhancing and creating value at our portfolio companies to support their contribution to the economy of the Kingdom. Our emphasis on adherence to the highest standards of corporate governance and transparency has once again placed us in the top tier of global peers in relation to transparency. Furthermore, we are confident that our financial clarity, combined with our prudent investment strategy and emphasis on sustainable value creation, will continue to drive our business forward."
Despite the decrease in group revenues for the year by 5.6% to BD 1.1 billion, the rigorous cost management at Gulf Air led to an 11.5% reduction in direct costs to BD 988 million, resulting in an increase in gross profit of 135% to BD 109.4 million. Improved focus on operational efficiencies and cost control contributed to a 204% increase in operating income to BD 70.7 million from 23.2 million. Net result was a profit of BD 82.7 million compared to a loss of BD 181.7 million, with the majority of the increase driven by significantly lower impairment losses and improved operating performance across portfolio companies, in particular Gulf Air.
Lower revenues at Gulf Air contributed to the overall decrease in Group revenues. This follows the closure of unprofitable routes, an initiative implemented as part of the restructuring undertaken in 2012. The decrease in revenues was offset by the substantial cost efficiencies achieved as a result of strategic initiatives, with the airline’s operational loss declining to BD 95.4 million in 2013 from BD 183.8 million in 2012. Gulf Air’s net loss after one-time restructuring costs, impairments and government grants declined to BD 12 million in 2013 from BD 81.5 million in 2012.
Aluminium Bahrain ("Alba") performed well against a backdrop of challenging market conditions combined with an 8% drop in LME aluminium prices in 2013. The company made a positive contribution to Group revenues on the back of higher aluminium premiums and sales volumes, with 2013 revenues of BD 749.3 million.
Share of profits from principal associate companies increased to BD 46.5 million in 2013, with Bahrain Telecommunications Company ("Batelco") and National Bank of Bahrain contributing BD 15.4 million and BD 24.7 million respectively. National Bank of Bahrain reflected improved performance in the financial services sector, in addition to enhanced internal processes and cost controls.