GLOBAL 2008 Q3 profit Dh280m +36%, M9 1.4bn +66% 27 Oct 2008
GLOBAL 2008 Q3 report GLOBAL 2008 M9 report
Summary data from Global press release (see next post). No financial statements supplied so 08Q2 Balance Sheet figures used to calculate ROE, PBV, and ROE. Q3 data calculated from 9M and 1H data as Q3 figures not supplied in press release. Global Investment House (GLOBAL) profit figures for third quarter 2008 are (EPS annualised in brackets):
EPS figures calculated from Net Profit / 945,510,000 shares outstanding.
GLOBAL share price as of 27 Oct 2008 was 11.25 dhs, so 2008 estimated PE is about 11.25 / 1.10 = 10.2, based on Q3 earnings, which is close to the average market PE of about 10. 2008 PE estimate based on M9 earnings is 11.25 / 1.99 = 5.6, which is about half as much, and is more inline with PEs for investment companies listed on the DFM. Although 9M and 3Q profits are up compared to the same periods in 2007, 3Q profit of AED 284m is substantially down on the previous 2 quarters this year - Q2 was AED 650m and Q1 profit was AED 476m.
2008 Nine-Months Results - Global announces record profit of KD 103 million, Net income up by 66%
Kuwait - Global Investment House (GLOBAL) announced today its financial results for the nine-months ended 30 September 2008. Global continued on a path of excellent earnings growth with net income for the nine-months of 2008 rising to KD102.9 million (USD385.9 million), an increase of 66% against the nine-months 2007 net income of KD61.9 million (USD232.1 million). The earnings per share (EPS) rose from KD0.068 (USD0.25) nine-months 2007 to KD 0.093 (USD 0.35).
Mrs. Maha Khaled Al-Ghunaim, the Chairperson and Managing Director, expressed her full satisfaction with the financial results achieved during the nine-months of 2008. Commenting on the company’s performance, Mrs. Al-Ghunaim said, “In these unprecedented times of financial uncertainty, our results reinforce Global’s position as the GCC and wider MENA region’s leading private sector Asset Management and Investment Banking firm in terms of profitability, shareholders’ equity, market capitalization and range and quality of products and services offered. Continuous and sustainable growth in the Company’s financial performance is a direct outcome of our diversified business model, robust business strategies, execution capabilities and trust and support of all our stakeholders.”
She added, “Our results reinforce the underlying strengths and fundamentals of GCC economies and generally sound health of the regional financial system.
During the nine-months of 2008, the net operating income (total revenues) increased by 52% to reach KD157.7 million (USD591.2 million). This growth in revenues stemmed from strong performance of all the major lines of businesses namely: Asset Management, Investment Banking, Principal Investments, Real Estate and Brokerage.
At 30 September 2008, our Assets under Management (AUM) crossed the USD10 billion mark to reach USD10.2 billion, whereas the associated management fee recorded a 17% growth. In July 2008 we successfully closed the placement of USD 500 million for Global MENA Financial Assets Limited and listed the company on London Stock Exchange. We also, launched a second fund in the GCC real estate fund series following the success of the first Global GCC Real Estate Fund, reflecting our commitment to offering diversified array of investment opportunities to our client base and growing fee based stable revenues.
The pipeline for investment banking transactions, particularly for private placement of initial and follow-up offerings remained strong. During the nine-months of 2008, the investment banking fee reached all time high of KD23.5 million (USD88.1 million).
Under our integrated business model, the principal investments group continued to make investments of strategic relevance, investments for geographic expansion and investments for seeding investment banking mandates and asset management products. The size of the principal investments book increased from KD659.3 million (USD2.4 billion) at 31 December 2007 to KD1,023.0 million (USD3.8 billion) at 30 September 2008. The annualized return of the principal investments book was marginally below our expectations at 12.4% (2007: 18.9%).
To strengthen our brokerage pillar, we finalized the acquisition of 70.9% shareholding interest in First Brokerage Company (Al Oula Brokerage), an established brokerage firm in Kuwait with around 5% market share for a consideration of KD 21 million (USD 79 million). Global acquired this controlling stake at a PE of 11 times estimated 2008 earnings. Global also established a brokerage subsidiary in Jordan with a capital of KD 5.6 million (USD 21.2 million). The establishment of brokerage operations further strengthens Global’s market position in Jordan built over past six years through asset management and investment banking activities. These two expansions in brokerage operations take the number of markets in which Global has brokerage operations to nine. These markets include Kuwait, Bahrain, Oman and UAE in the Gulf Cooperation Council (GCC) and Egypt, Jordan, Pakistan, Sudan and Tunisia in the wider Middle East and North Africa region.
It is worth mentioning that in May 2008, Global raised USD1.15 billion by issuing Global Depository Receipts. Global listed its Global Depository Receipts (GDRs) on the regulated market for listed securities on the London Stock Exchange (LSE). We became the first Kuwaiti incorporated company to be listed on LSE. The Company’s shareholders’ equity increased from KD 323.1 million (USD 1.2 billion) at 31 December 2007 to KD701.6 million (USD 2.6 billion) at the end of 30 September 2008. The increase in capital not only strengthened our capital base but also brought down our leverage from 2.1 times at the end of 2007 to 1.0 times at the end of September 2008, substantially improved our available liquidity and made our funding profile prudent. At 30 September 2008 our shareholders’ reserves (including premium) stood at KD570.4 million (USD2.1 billion), one of the highest among the investment companies in Kuwait.
2008 witnessed a number of awards presented to Global by several local, regional, and international agencies on the corporate and management level. On the corporate level it was named “Best Equity House in Kuwait” by Euromoney and “Best Investment Bank in Kuwait” for 2008 by Asiamoney.
On the management level, Mrs. Al-Ghunaim was awarded the “Banker Middle East Industry Award 2008 (BME) for her outstanding contribution to the financial industry”.
Mrs. Al-Ghunaim expressed her deep gratitude to Global’s shareholders and clients for their support, and the employees who continuously contribute to the success of Global.
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