Bahrain Mumtalakat Holding Company reported a 13 per cent increase in revenue to BD1.447 billion ($3.838 billion) last year, up from BD1.277 billion in 2007.

Impairment charges of BD370 million, largely attributable to Mumtalakat's holdings in Gulf International Bank and Gulf Investment Company, were booked during the period leading to a net loss of BD69.3 million compared to a net income of BD170 million for 2007.

Excluding the impairment charges, Mumtalakat generated a profit of BD300 million compared to BD282 million for 2007.

Total assets fell by 7.6 per cent to BD4.8 billion from BD5.3 billion, with total equity for the year standing at BD2.9 billion, from 2007's figure of BD3 billion.

'Mumtalakat's portfolio companies generated a solid performance for the year but were not immune to the effects of the global recession,' said chairman Shaikh Ahmed bin Mohammed Al Khalifa.

'The action taken during the year to align the business' balance sheet to meet the needs of our long-term investment strategy will see significant benefits for the business and its portfolio companies as we move back into a growth cycle over the next few years.

'Despite the intensely challenging environment, Mumtalakat has made great strides during the year in building itself further as a strategically significant financial institution for the long-term benefit of Bahrain's economy.'

Mumtalakat took its first steps last year in implementing its strategy to build and extract value from its portfolio of commercial assets and making some of its first international investments.

A significant return was generated by the business with the disposal of a local real estate development, which saw a doubling of investment capital over an 18-month period.

Two investments were made during the year - the first, an Indian telecoms infrastructure fund and the second, a globally structured distressed opportunities fund.

Mumtalakat undertook a successful financing through a syndicated loan in August which raised $500m for general corporate purposes.

The syndication was led by Mumtalakat's own portfolio company, National Bank of Bahrain, which secured the financing in challenging market conditions.

Its strategy to build a world-class financial organisation also progressed during the year, strengthening its capacity in terms of corporate governance, transparency, process and skill sets.

Its operational capabilities were also developed as it recruited additional personnel, began developing its strategy for its non-executive board members and enhancing the portfolio strategy for its businesses.

'We've made a great deal of progress in developing Mumtalakat as a world- class financial institution during 2008, despite the challenges of operating in one of the worst financial crises for many generations,' said chief executive officer Talal Alzain.

'We have been practical and realistic in terms of executing upon our international investment strategy, and we are now focusing our efforts on developing our domestic portfolio of company assets ahead of an economic recovery.

'With the talent we've now brought on board and the new companies we formed during the year, we're already creating real value from our portfolio and I believe that Mumtalakat will be well placed to create further value as the global economy grows.'-TradeArabia News Service