Finance & Capital Market

Waha Capital reports $49m H1 loss; plans new strategy

Waha Capital, a leading investment company in Abu Dhabi, has reported a net loss of Dh182.2 million ($49.33 million) for the first half (H1) of this year.  
The company’s Asset Management business recorded a solid performance, while its Private Investments unit recorded a loss, mainly due to provisions and one-off items, the company said. 
Total income from Asset Management increased 64% year-on-year to Dh395 million, while the total general and admin expenses  fell by 18% year-on-year to Dh107.2 million. The total impairments and loss on disposal aggregated to Dh363 million. 
Waha Capital is currently pursuing a new strategy to deliver a turnaround and set the company on a path of sustainable growth in the future. 
As part of this strategy, the company announced in July that a new chief executive, Amr Al Menhali, will join Waha Capital in September 2019, bringing with him a track record of success after nearly two decades at leading UAE banks. The business has strong institutional backing and together with Waha Capital chairman Waleed Mokarrab Al Muhairi, the turnaround strategy is being led to further progress the development of the business, it said. 
Waha Capital has demonstrated robust performance over recent years and has established a well-balanced portfolio of assets across several growth sectors. A realigned strategy will focus on further developing and diversifying the company’s investments that deliver long-term value to shareholders.
The company will be looking to create additional value from its current roster of investments, while seeking attractive new opportunities globally, and building a solid asset management offering for its third-party institutional investors, it added. 
Waha Capital’s Asset Management business, which manages emerging market funds, recorded a net profit of Dh239.2 million in the first half. The company’s credit and equity funds, which have consistently outperformed key indices over several years, continued to deliver strong returns, while assets under management also increased to Dh2.9 billion.
The company’s Private Investments business, which invests in diverse sectors including aviation, fin-tech, energy, healthcare and financial services, recorded a net loss of Dh351.8 million in the six-month period. This was largely due to a provision of Dh209.4 million following a reassessment of the value of AerCap Holding’s recoverable amount and a loss on disposal of Dh153.6 million following settlement of 6 million AerCap shares, it said. 
The Private Investments division manages a diversified portfolio of high-potential investments that are well-positioned to benefit from regional and global macro-economic trends. The recovery in oil prices in the last year is driving investment in the energy sector to the benefit of oil and gas services firms such as Petronash and Nasdaq-listed National Energy Services Reunited Corp (NESR). 
Meanwhile, the roll-out of mandatory health insurance in the UAE is supporting the further growth of Anglo Arabian Healthcare, and fintech firm Channel VAS continues to tap increased mobile penetration and demand for micro finance in Africa and Asia, it said.
Waha Capital recorded a net loss of Dh182.2 million for the first half of 2019. For the second quarter, the company reported a net loss of Dh124.4 million.
Al Muhairi, chairman, said: “Thanks to a well-established business platform, a robust balance sheet and institutional backing, Waha Capital is well placed to play a leading role in the regional investment landscape. The company’s Asset Management division continues to demonstrate an impressive track record of outperformance, and our strategy is focused on building assets under management by leveraging our networks to attract third party investors. 
“The Principal Investments division has invested in high potential businesses in the company’s areas of expertise and is focused on active value creation. While financial results in recent quarters have been impacted by losses associated with the collar hedge on the stake in AerCap Holdings, I am pleased that the company has implemented a strategy to deliver a rapid turnaround, returning to a path of sustainable growth. Under the leadership of Amr Al Menhali, Waha Capital will be fully focused on producing an attractive return on equity in the coming years.”
Mohamed Al Nowais, managing director of Waha Capital, said: “Waha Capital’s first-half results show continued growth of our Asset Management business, with strong profitability metrics, while our Principal Investments unit was impacted by one-off losses. Higher financing costs also weighed on the company’s bottom line.  
“Waha Capital remains highly resilient due to the diversification of its assets, and the management team is fully focused on creating value across the business, by taking an active approach to guide portfolio companies in their growth, and by building a strong asset management proposition."  -TradeArabia News Service