The Board of Directors of Bahrain Mumtalakat Holding Company (Mumtalakat) has announced a rise in its consolidated total assets reaching $15.4 billion in 2017, marking an increase of 46.4 per cent compared to 2016.
The rise in value was due to value gains from Mumtalakat portfolio companies including the consolidation of McLaren and Alba’s Line 6 project.
“Last year was notable for Mumtalakat as we witnessed substantial growth in the Group. Our strong investment mandate and results support the growth of the local economy from further economic diversification to job creation. Our impact in Bahrain can be evidenced in the continued financial commitment to the growth of our local companies,” said HE Shaikh Khalid bin Abdullah Al Khalifa, Deputy Prime Minister, Chairman of Mumtalakat
Mumtalakat’s support to the national economy continued as the company committed $88 million throughout the year to legacy assets including Bahrain International Circuit, Bahrain Real Estate Investment (Edamah) and Arab Shipbuilding and Repair Yard (ASRY).
Mumtalakat also generated $1.6 billion last year in capital expenditure compared to $657 million in 2016 while expenditure on employee salaries and benefits increased by 11 per cent in comparison to the previous year for its key Bahrain-based companies.
“We reported net profits for the fifth consecutive year, reflecting the success of our investment model as we continue to invest in and for Bahrain while managing our portfolio with a commercial mindset. In addition, we committed $277 million to new investments in 2017. This included acquisitions with a co-investment partner. In total, since inception of the fund in 2006, $2.1 billion has been invested in Bahrain, ranging from growth capital for legacy and strategic assets to the establishment of 11 new companies and ventures,” said Mahmood H. Alkooheji, Chief Executive Officer of Mumtalakat.
- Alba’s revenues increased by 28 per cent to $2.3 billion in comparison to $1.8 billion the previous year. Alba’s net profit grew by 91 per cent in 2017 to reach $246 million compared to $129 million in 2016. The increase was due mainly to higher aluminium prices.
- Mumtalakat’s share of profit from the National Bank of Bahrain (NBB) increased from $67 million in 2016 to $70 million in 2017.
- The fair value gain resulting from the consolidation of the McLaren Group was $667 million.
- Mumtalakat recognised impairment losses of $281 million during the year 2017 compared to $89 million in the prior year.The share of profits from Bahrain Telecommunications Company (Batelco) declined due to impairment losses on some of its overseas investments.
- Net profits reached $560 million during the year in comparison to $183 million in 2016.
Local Economic Impact:
- Alba’s $3 billion Line 6 expansion project commenced construction in the second quarter of 2017. The project will create over 500 direct jobs in Alba in addition to thousands of indirect jobs in Bahrain, boosting the downstream cluster in the Kingdom. The Line 6 Expansion Project will bring Alba’s total production capacity to 1.5 million metric tonnes per year making it the world’s largest single-site aluminium smelter.
- Bahrain Real Estate Investment (Edamah) commenced reclamation and building work on Saada West, a mixed use waterfront development in Muharraq.
- Gulf Aluminium Rolling Mill (GARMCO) produced its first aluminium in its remelt expansion project in August 2017. The new $55 million metal recycling and cast house facility will increase GARMCO’s production facility by 150 per cent. As part of this expansion, 50 new jobs will be added to GARMCO’s workforce.
- Mueller Middle East, the first copper tube manufacturing facility in Bahrain, in which Mumtalakat holds a 30 per cent stake, began construction in 2017. The facility’s commercial copper tubes will serve regional air conditioning and refrigeration equipment manufacturers. It will further enhance Bahrain’s manufacturing exports, which currently accounts for 20 per cent of the Kingdom’s GDP, creating approximately 200 jobs.
- Mumtalakat established two new companies in Bahrain, in the testing and verification of gemstones as well as introducing a new auction business, contributing to economic growth and local workforce training and qualification. These are Mazad and DANAT, the Bahrain Institute for Pearls & Gemstones.
Mumtalakat was created in 2006 with a mandate to grow the Government’s strategic non-oil and gas assets through a commercial focus. Since then, Mumtalakat has further developed and diversifed its portfolio both locally and globally with an objective to generate sustainable financial and economic returns for the country. The sovereign wealth fund’s assets have grown and almost doubled from 29 to over 60 local and international companies across 11 sectors, of which 65 per cent are in Bahrain and the region, 27 per cent are located in Europe and eight per cent are based in the United States today.
With total consolidated assets of $15.4 billion, Mumtalakat plays an important role in the national economy through its strategic assets while seeking commercially viable investment opportunities in growth sectors. Mumtalakat provides approximately 14,000 direct job opportunities in Bahrain within its local portfolio companies.