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Mubadala's 2011 loss soars to $1.14bn
Abu Dhabi, April 12, 2012
Mubadala, the Abu Dhabi government's investment vehicle, on Thursday reported an overall loss for 2011 of $1.14 billion as volatile global markets led to a sharp drop in the value of its financial investments and real estate portfolio.
The state-owned fund, which has stakes in General Electric and private equity firm Carlyle, made an overall loss of 4.2 billion dirhams ($1.14 billon) in 2011, compared with a loss of 338 million dirhams in 2010, it said in a statement.
'While our financial investments' performance was impacted by the volatility in the global market place during 2011, we continue to maintain a long-term financial investment perspective,' Khaldoon al Mubarak, chief executive and managing director said in the statement.
Mubadala incurred a loss of 3.03 billion dirhams from its financial investments compared with a profit of 355 million dirhams a year earlier, the company's financial statements showed.
Unlisted Mubadala saw its 2011 revenues surge 77 percent to 27.9 billion dirhams due to high energy prices last year and consolidation of its semi-conductor unit Advanced Technology Investment Company (ATIC). This compared with revenues of 15.8 billion dirhams in 2010.
Total assets also grew 73 percent to 177 billion dirhams ($48.19 billion) in 2011, Mubadala said.
Mubadala, one of few state-controlled vehicles to publish results, also owns stakes in local companies including indebted developer Aldar Properties and struggling cooling firm Tabreed.
The fund, which holds a near-majority position in indebted Aldar, plans to transfer a 14 percent stake in the developer to secure a loan facility from an Abu Dhabi Commercial Bank.
Last month, Mubadala said it would buy a $2 billion stake in Brazil's EBX Group, providing fresh capital to the Brazilian conglomerate of billionaire Eike Batista. Abu Dhabi is also home to sovereign wealth fund Abu Dhabi Investment Authority (ADIA).
Financial highlights for the period ended December 31, 2011:
• Revenues increased by 77% to Dh27.9 billion in 2011 compared to Dh15.8 billion in 2010, mainly due to the consolidation of the Advanced Technology Investment Company (ATIC). Revenue growth was also driven by sustained, high energy prices throughout 2011; the ongoing growth of Mubadala’s aerospace sector; and the consolidation of Tabreed, the publicly-owned district cooling company.
• Total assets increased by 73% to Dh177 billion in 2011 compared to D 102 billion in 2010, driven by the consolidation of ATIC, as well as an increase in the assets of Mubadala’s business lines in industry, capital, information and communication technology, healthcare, and aerospace among others.
• Operating income was Dh1.2 billion in 2011 compared to Dh2.6 billion in 2010, reflecting additional investments in semiconductor manufacturing capacity as well as research and development expenditures.
• Total comprehensive income attributable to the owner of the group was a loss of Dh4.2 billion compared to a loss of Dh338 million in 2010. This was primarily driven by negative fluctuations in the fair market value of Mubadala’s financial investments, as well as a reduction in the market value of certain real estate holdings, both impacted by market volatility.
• Total equity increased by 71% to Dh106 billion from Dh62 billion in 2010. The increase in equity, mainly due to the consolidation of ATIC and additional cash contributions, reflects the continuing commitment by Mubadala’s shareholder to its mandate and business objectives.
• Liabilities and Leverage. In 2011 Mubadala’s debt to capitalization ratio remained at prudent levels, decreasing slightly from 30.2% to 29.6%, similar to the company’s debt to equity ratio declining from 43.4% to 42.0%.
Total liabilities increased to Dh71 billion in 2011 primarily due to the consolidation of ATIC and Tabreed, and the issuance of bonds by Mubadala. Mubadala’s gearing ratio decreased to 22% in 2011 from 25% in 2010, reflecting the strength of the company’s balance sheet.
• Mubadala’s credit ratings remain among the top corporate ratings in the region at [Aa3/AA/AA] by Moody’s, S&P and Fitch. -Reuters and TradeArabia News Service