Seera Investment posts $64m net profit
Manama, August 11, 2011
Bahrain-based Seera Investment Bank's sale of UK-based BWA Water Additives (BWA) for $300 million saw the bank posting a net profit of $64.1 million for the first half of the year against $3 million for the same period last year.
The strong results reflect the performance of investment portfolio and confirm the fact that Seera is showing a very healthy trend of gradually improving financial results.
Net profit for the second quarter was $61.5 million compared with $2.5 million for the second quarter of 2010. The exit from BWA contributed significantly to the results.
Investment portfolio has shown a very good level of resilience during the financial crisis and excellent performance since then.
"We are very pleased with these positive results and feel that they fairly reflect Seera's efforts since its establishment to invest in sectors and asset classes with appropriate levels of risk and strong growth prospects," said chief executive officer Abdulla Janahi.
"Our disciplined approach has been key to realising value from investments, even in difficult times.
"Seera's strategy is to invest in companies with strong fundamentals, an experienced management team and in industries which are not highly cyclical.
"This strategy has seen Seera through the worst financial crisis and the subsequent challenging global economic environment," he said.
"BWA, our recent exit, is a good example of our investment approach," he added. It was acquired just before the onset of the financial crisis and Seera worked in close partnership with the company management to mitigate the impact of the crisis and to grow its business.
"The successful exit demonstrated Seera's ability to create value during this exceptionally challenging investment holding period."
The sale of BWA yielded a return on investment of around 70 per cent over a holding period of slightly over two and a half years.
"In tandem with prudent investment strategy, the bank diligently managed its balance sheet and avoided excessive leverage," he said.
"Due to its prudent liquidity management, the bank comfortably met all its obligations on time. The management also initiated a programme to implement an efficient and sustainable overhead operating base and ensured that an optimal operating environment is maintained. The combination of our diligent investment approach as well as sound balance sheet and cost management have been very good for Seera and are being reflected on its operating results.”
"Obviously, the markets are not as stable as we would like them to be, especially given the sovereign debt issues, but we are hopeful that market stability will return reasonably soon and that the worst period is behind us," he added.
"The recent financial crisis has forced investment banks globally and regionally to re-think their business strategy,” he said.
"Seera has also reflected on learning from the past few years and modified its business model and strategy to better position itself for future challenges and opportunities. In spite of the uncertainty, we feel Seera is in a good position to manage through these difficult markets and capitalise on investment opportunities in line with our investment thesis.”
Seera has investments in the industrial manufacturing and transportation sectors as well as smaller investments in the utilities and real estate sectors.
The investment strategy is to maintain a diversified portfolio geographically and industry-wise, focusing on sectors underpinned by strong fundamental demand to avoid speculation- driven sectors. – TradeArabia News Service