Waha Capital raises dividend payout 140 per cent

Waha Capital sparks some joy in sombre market with massive increase in dividend payout.

Waha Capital is increasing its dividend payout on last year’s earnings by 140 per cent, giving investors something to cheer about at a time when stocks are sagging over concerns of future growth prospects.

Shares of the Abu Dhabi-based company rallied 3.3 per cent to Dh2.82 on Wednesday, taking its two-day gain to 7.3 per cent, after Waha said it had approved a cash dividend of 30 per cent of the company’s nominal share value after record income last year.

That translates into a dividend payout of about 10 per cent of the company’s traded share price.

Waha’s income jumped more than five fold to Dh1.73 billion in 2014 from Dh306.4 million in 2013. That dramatic jump was mainly thanks to the performance of AerCap, the New York-listed airplane leasing company in which Waha has a 12.6 per cent stake.

The dividend announcement comes amid the declining fortunes of the equity markets in the UAE, which have not fully recovered from the onslaught of the sell-off in the fourth quarter of last year, when a 30 per cent drop in the price of crude triggered a similar drop in Dubai and Abu Dhabi benchmark indices.

Since then shares have been more or less treading water and yesterday Dubai’s main index dropped 2.2 per cent while Abu Dhabi’s measure fell 0.4 per cent.

“Across the board, top management is under pressure from shareholders to give decent dividends,” said Sebastien Henin, the head of asset management at The National Investor based in Abu Dhabi.

“Listed companies are inclined to pay generous dividends. They want to attract long-term quality investors who will stick to their shares. You can see the nice rally in Waha in the past two days.”

AerCap said in December 2013 that it had agreed to buy the insurer American International Group’s aircraft leasing business, International Lease Finance Corporation, in a deal valued at more than $5bn.

Under the terms of the transaction, which will increase the size of AerCap’s fleet to more than 1,300 aircraft, AIG will receive $3bn in cash in addition to 97.5 million AerCap shares for its wholly owned subsidiary ILFC.

Despite the lull in regional financial markets, the firm said that its capital markets division also delivered above-market returns from its credit and equities portfolios last year. “Our capital markets division, which already enjoys a strong track record in debt markets, started investing in regional equities in 2014,” said Hussain Jasim Al Nowais, the company’s chairman.

He said the company, which is also active in health care, education, infrastructure and energy, plans to offer an investment management proposition to third party investors in the coming [e-mail]

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