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12 February 2020
RESULTS

GFH posts net profit of $80.1 million for 2019

GFH's board recommended a 5.57 per cent dividend to shareholders in the announcement.

Hisham Alrayes and Jassim Alseddiqi, GFH

by William Mullally

GFH Financial Group announced its financial results for the fourth quarter and full year for 2019.

Net profit attributable to shareholders was $6.5 million for the fourth quarter compared with $10.6 million in the last quarter of 2018, a decrease of 38.7 percent. GFH attributed this to higher provisions from the group’s commercial banking subsidiary. Earnings per share for the fourth quarter was $0.19 compared to $0.30 for the last quarter of 2018. Income for the fourth quarter was $81.66 million up slightly from $80.87 million during the fourth quarter of 2018.

Net profit attributable to shareholders for the full year was $80.1 million compared with $114.1 million for the prior year, a decrease of 29.8 per cent resulting primarily from higher provisions in the commercial banking subsidiary of the group. Earnings per share for the year was $2.37 compared with $3.22 in the corresponding prior year. Total equity attributable to shareholders was $1.0 billion at 31 December 2019 from $1.06 billion at 31 December 2018, a decrease of 5.7 per cent due to additional acquisition of an infrastructure project and treasury share buyback programs, according to GFH. Total assets of the group were $5.9 billion at 31 December 2019 compared with $5.0 billion at the previous year end, an increase of 18.2 per cent. Total assets plus fund under management increased from $8.5 billion in 2018 to $10.0 billion in 2019.

Revenue for the year was $335.69 million versus $286.17 million for 2018 an increase of 17.3 per cent. According to GFH, this reflects continued growth and progress in the Group’s core investment banking business, increased contributions from real estate activities and strong performance in the group’s growing treasury business.

 

In line with results, the board of directors has recommended the distribution of cash dividend of 5.57 per cent ($50 million) for 2019 to shareholders, subject to approval by the General Assembly and regulators.

“For the year, the Group was pleased to report continued growth and progress and a subsequent double digit increase in income for 2019. While results were impacted by higher provisions in our commercial banking operations, we were pleased to announce another dividend as well as good overall performance and profits reflecting the continued successful implementation of our strategy, further diversification of our business lines and sound financial position. During the fourth quarter, we approached the debt capital markets in a landmark transaction for the Group. The overwhelmingly positive response that we received is no better testament to where GFH stands today and market recognition and confidence in the Group and where we are heading. We went on to announce in January 2020, the successful pricing of a US$300 million 5-year sukuk, which was ‘B’ rated by S&P and Fitch, and oversubscribed 2.5 times exceeding US$750 million. Importantly, this included strong demand from international investors who were allocated 47% of the issuance further diversifying our sources of funding and building GFH’s brand with global investors. These proceeds will be used to fund our next phase of development in 2020 and beyond. With solid foundations and the strides we have made over the past year, the Group’s focus now continues on growth, diversification and value creation for our investors and shareholders,” said Jassim Alseddiqi, Chairman of GFH.

“AlHamdullah we have achieved a good growth and results from across our core business lines characterized the Group’s performance in 2019. We had to restructure our commercial banking operations for stronger contribution in future, hence we have been impacted by provision, however,  investment banking income for the year has witnessed substantial increase in more than doubled as a result of our strengthened focus and success in identifying and placing unique income generating investments. Key among these was continued growth of our portfolio of real estate assets in the US market where we have now concluded investments in excess of US$1 billion over the past five years. Similarly, we also saw significantly improved contributions from our real estate activities where we advanced our landmark projects launching sales in a number of our iconic developments including Harbour Heights where units were sold to regional and international investors as well as achieving well-timed and profitable exists. Our newly established treasury line also exceeded expectations supporting income growth and adding further diversification to our business. These constitute three key areas of our business that we will be working to further diversify and grow in 2020.,” said Mr. Hisham Alrayes, CEO of GFH, further expanded on the Group’s operating performance during the year.

 “During the year, we were pleased to launch our Britus Education platform through which we will continue to grow our position as a leading regional and international investor in this promising defensive sector in addition to other sectors where we have been active during the year and see continued opportunities. Furthermore, during 2020, we will begin our operations in and Saudi Arabian markets where we have established a presence and poised to accelerate the growth of our investments and activities,” said Alrayes.

 “We are excited for our next phase of growth in 2020 and have entered the year in a strong operating and financial position and with the full confidence of the market following our successful placement of our 5-year sukuk. I would like to take this opportunity to thank our shareholders and investors for their continued support and extend our gratitude to our Board and regulators for their guidance. I’d also like to thank our dedicated and hardworking teams for their ongoing efforts and the critical part they play in our success and our efforts to continue delivering value for our shareholders, investors and the economies in which we are active.”

Shares of GFH are traded under the ticker “GFH” on the Bahrain Bourse, Boursa Kuwait and Dubai Financial Market.  

 


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