GFH 2008Q4 loss Dh42m -110%

[sharewadi]

GFH 2008 Q4 loss Dh42m -110%, FY 1.1bn -14% 39 Jan 2009

Gulf Finance House 2008 Q4 report
Gulf Finance House 2008 annual report

GFH did not supply balance sheet figures so 30 September 2008 data has been used to calculate ROA, ROE, and PBV but treat with caution - the loss in Q4 indicates there may be a downwards adjustment on the Total Assets and Shareholders Equity.

Gulf Finance House (GFH) financial results for 2008 Q4 are (EPS annualised in brackets):

2008 Q4 loss = AED -41.9m -110.5% from 2007 Q4, EPS = -0.04 dhs (-0.15 )
2007 Q4 profit = AED 400m, EPS = 0.51 dhs
2008 FY profit = AED 1070m -14.4% from 2007 FY, EPS = 1.34 dhs
2007 FY profit = AED 1.25 bn, EPS = 1.57 dhs

EPS figures calculated from Net Profit / 796,403,030 shares outstanding but as GFH did not make a profit for the fourth quarter, PE calculation is not very useful for that period. However, 2008 PE estimate based on FY earnings is about 10.3 which looks expensive compared to other banks.

GFH is not really a bank but more of an investment company though, so earnings are likely to be more volatile (then again, some of the banks are looking a bit ropey too) GFH share price used may be out of date - last trade on the DFM was in mid December 2008 and I haven't checked price on Bahrain Exchange. Press release is dated 28 January 2009 but wasn't available until the next morning.

DFM 29 January 2009 (am):

(GFH): Press release regarding its preliminary financial results for 2008

Other result and related topics

2008 Q4 Bahrain results

GFH 2008Q3 profit AED 301.6m 26 Oct 2008
GFH 2008Q2 profit AED 382.1m 21 Jul 2008
GFH 2008Q1 profit AED 427.0m 28 Apr 2008
GFH 2007FY profit AED 1,249.1m 30 Jan 2008

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[sharewadi]

Press Release Wednesday 28 January 2009:

GFH announces annual profits of US$ 291 million Net profit of US$ 291 million in 2008 compared to US$ 340 million in 2007 Earnings Per Share US cents 37.01 in 2008 compared to US cents 42.79 in 2007 Manama, Bahrain: Gulf Finance House (GFH) has today announced year end profits of US$ 291 million which represent a reduction of 14% on 2007. For the majority of the year, the bank continued a trend of strong earnings in comparison to 2007 despite turmoil in the global economy and a more cautious investment community. Following three strong quarters of earning’s in 2008, GFH reported a loss of US$ 10 million in the fourth quarter primarily due to conservative provisions on investments. While annual profits have technically fallen, US$ 84 of the US$ 340 million profits in 2007 were accounted for by the sale of 60% of GFH’s holding in Khaleeji Commercial Bank - a non recurring exceptional item. Earnings per share were 37.01 cents (US) compared to 42.79 cents (US) for 2007. Return on equity of 2008 stood at 31.62% and return on assets stood at 10.19%. GFH’s Board of Directors has proposed a total dividend of 40%, payable as 20% cash and 20% bonus shares, subject to the approval of the Central Bank of Bahrain (CBB) and the Annual General Meeting (AGM). Annual profits have been driven both by investment in our economic infrastructure initiatives - namely Tunis Financial Harbour, Energy City Libya and Caspian Energy Hub - and the success of Cemena and First Energy Bank which underline the increasing importance of our diversified product range. Further income was derived from GFH’s share of the net income of Khaleeji Commercial Bank and Qinvest. Gulf Finance House Chairman Esam Janahi commented today saying, “Relative to the global investment banking sector we have reason to be very pleased with our year end results. While the fourth quarter proved challenging, it is important to view our results in the context of the global economic crisis. We’ve recorded a serious and competitive profit for the year in a difficult market. As a Sharia’a compliant bank we are not directly exposed to CDOs and similar asset classes and we continue to offer visionary investment opportunities in some of the world’s fastest emerging economies. “We have much to be optimistic about and we’ll study developments closely over the next few months with an opportunistic eye on undervalued assets and the defensive sector across the region. Deputy CEO Mehran Jamsheer added, “Following a decade of exceptional growth we should not be unduly surprised by the effects of the most serious global economic downturn in living memory. The fundamentals of our business remain strong. With over US$ 1 billion in liquid assets we are well placed to weather the downturn. Indeed, we strongly believe that a changing financial landscape will deliver a range of new opportunities. Thanks to our diversified Venture Capital and Private Equity operations, we are poised to capitalize on the emerging potential in undervalued opportunistic assets in the region.” “With an historic focus on the conception and execution of economic infrastructure initiatives, 2008 has seen GFH move towards a diversified product portfolio and a broader revenue base. Venture capital, private equity and asset management functions will broaden the income streams in the months and years ahead, alongside a component focused on the conceiving specialist financial institutions.” Standard & Poor’s (S&P) have affirmed GFH’s BBB-/ A-3 long and short term ratings as a reflection of the bank’s strong financial performance and satisfactory liquidity and capitalization. In changing the outlook from stable to negative S&P cite the deteriorating operating environment which has effected banks across the world. However, they also point out the nature of GFH assets mean they are less subject to market-to-market deterioration than those of GFH’s peers.

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[sharewadi]

Updated results and ratio summary below ...

GFH 2008 Q4 loss Dh42m -110%, FY 1.1bn -14% 29 Jan 2009

Gulf Finance House 2008 Q4 report
Gulf Finance House 2008 annual report

[sharewadi]

Gulf Finance House AGM today approves 20% cash and 20% share dividend. No information supplied regarding record date or payment date.

Press Release 18 February 2009:

Gulf Finance House Declares 40 per cent dividend for 2008; 20 per cent in cash and 20 per cent in bonus shares Manama, Bahrain - Gulf Finance House (GFH) announced today that the Annual General Meeting has approved a cash dividend payout of US$ 52.56 million for the fiscal year 2008. This is equivalent to 20 per cent of the par value of the paid-up capital. In addition a further 20 per cent will be paid in the form of bonus shares. This was driven by strong end of year profits of US$ 291 million. Making an official statement after the Bank's Ordinary and Extraordinary Annual General Meetings (AGM), Mr. Esam Janahi, Chairman, GFH, stated: "GFH has performed extremely well over the past year, posting strong full year profits despite a dip in earnings due to the unprecedented turbulence experienced throughout the global economy. These strong profits is due in part to the emphasis we continue to place on conceiving pioneering and diversified initiatives with some of the world's fastest growing economies in mind. We continue to build and consolidate strong bonds of partnership with Governments, institutions and industry specialists across the GCC, Asia and North Africa. Alongside a robust and evolving business model GFH is well placed to build on its success in 2009." At the AGM, shareholders were updated by a report generated by the Board of Directors on the Bank's financial performance in 2008, the global economic landscape, key achievements, strategic progress, Corporate Social Responsibility projects and the outlook for the year ahead. Commenting on the Bank's plans for 2009, Mr. Janahi added: "GFH will adapt its strategy to suit the economic environment it operates in. The innovative nature of our work over the past decade underlines the versatility of the products we can offer our clients in a changing market. Alongside our core activities we anticipate exploring opportunities in defensive sectors across the region and look to capitalize on undervalued assets." Key highlights of the agenda included the approval of the financial statements for the year ended 31 December 2008, a presentation of the Bank's performance by the Chairman, the re-appointment of the Sharia'a board and the Bank's auditors (KPMG Fakhro), releasing Board members from any liability, and the election of a new Board of Directors for the Bank for the years 2009-2012. The Annual General Meeting has elected the following as directors for the subsequent term of three years, subject to the approval of the Central Bank of Bahrain: Al Shaya Group - Hamad Al Shaya Independent - Anthony Travis Kuwait Investment Company - Bader Nasser Al Sebaie Dubai Islamic Bank - Abdulla Ali Al-Hamli Adel Al Ohali Esam Yousif Janahi Qatar Islamic Bank - Abdullatif Al Meer Islamic Development Bank - Dr. Abdul Aziz Al Hinai Kuwait Finance House - Samir Al Nafisi Royal Guards of Oman Pension Fund - Mosbah Saif Al Mutairy Bahrain Islamic Bank - Mohammed Ebrahim Mohammed Saudi Economic & Development Co - Yousif Khayat Mr Janahi took this opportunity to welcome the new Board Members, wishing them success in achieving the Bank's goals, as well as the goals and interests of the companies they represent on the Board. Mr Janahi also announced that the first meeting for the new Board will be held in March, upon the Central Bank of Bahrain's approval. Concluding the AGM, the efforts of the senior management team were also recognized, praising the contributions made under increasingly challenging global economic conditions. With a cautiously confident outlook for 2009, the shareholders agreed that GFH will further diversify its product offering across Venture Capital, Private Equity and Asset Management. These new revenue streams will build on a core development infrastructure business that will continue to conceive and develop sector themed economic platforms in the world's fastest growing economies.

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