Bahrain Mumtalakat’s 2019 operating income climbs as revenue rises

The investment firm has stakes in 60 companies including Aluminium Bahrain, Gulf Air, Batelco and McLaren

Khalid Al Rumaihi, chief executive of Bahrain's Mumtalakat. The group posted an operating income of of125 million Bahraini dinars for 2019. Chris Whiteoak / The National

Mumtalakat, the sovereign wealth fund of Bahrain, reported a 211 per cent increase in operating income in 2019 on the back of higher revenue and stringent cost control.

Operating income for the full-year climbed to 125 million Bahraini dinars (Dh1.2 billion) from a year earlier, the company said in a statement on Monday. Revenue rose 11 per cent year-on-year to 2.3bn dinars.

“Despite the challenging global and regional economic environment, Mumtalakat has exhibited resilience and growth as it continues to play a vital role in the local economy supported by the group’s solid financial and operational performance,” Khalid bin Abdulla Al Khalifa, Bahrain’s deputy prime minister and chairman of Mumtalakat, said.

The wealth fund has stakes in 60 companies including Aluminium Bahrain (Alba), Gulf Air, Bahrain Telecommunications Company (Batelco) and Formula One car maker McLaren, among others.

Alba's revenue rose 13 per cent year-on-year while sales volume grew 33 per cent in 2019, despite a challenging year in the commodity market, Mumtalakat said. The company reported revenue of 1.03bn dinars in February.

Gulf Air's revenue also climbed 13 per cent to 412.7m dinars on the back of increased capacity, following deliveries of Boeing 787 and Airbus A320Neo aircraft to the fleet and launch of new routes.

Mumtalakat's other portfolio companies, Batelco and McLaren, also saw their profits rise last year.

“During 2019 Mumtalakat secured new investments and continued to work with its portfolio companies to focus on revenue enhancement and cost control which has contributed to a significant increase in operating income," Khalid Al Rumaihi, Mumtalakat chief executive said. "This is in line with Mumtalakat’s ongoing efforts to maintain a balanced, diversified and sustainable portfolio."

The group, though, still posted a reported net loss of 52.8m dinars for 2019, primarily due to non-cash impairment losses recognised on goodwill relating to Alba, it said.

“These losses, while impacting the group net results for 2019 do not represent a cash loss but rather represent a reduction in the value of goodwill on Mumtalakat’s books of accounts,” the company said.

Mumtalakat’s net profit before impairment losses rose 47 per cent to 82.9m dinars in 2019 “primarily on account of the increase in operating revenue and increased fair value gain on investments".

Since its establishment in 2006, Mumtalakat’s portfolio has grown from just 29 companies, mainly in Bahrain, to over 60 companies across various markets. The fund's total assets reached 7.1bn dinars in 2019.