Abu Dhabi state fund Mubadala reports 53.4% drop in first half net profit

Abu Dhabi state-owned investment fund Mubadala said on Thursday its first-half net profit tumbled 53.4 per cent as gains from financial investments failed to offset lower income from disposals and higher costs.

Mubadala, whose main goal is to engage in investments which enhance the development of the local economy, has stakes in companies including General Electric and private equity firm Carlyle.

The fund made a profit attributable to equity owners of Dhs 625.5m ($170.3m) for the first six months of 2015 compared with Dhs 1.34bn in the same period a year earlier, it said in a statement.

Total comprehensive income, which comprises all forms of income, dropped 63.9 per cent year on year to Dhs 477.7m in the first half of the year.

Mubadala said lower operating income was to blame for the decline in both figures, which dropped due to higher costs and less cash from sales.

Costs rose 10.6 per cent to Dhs 14.4bn, while it made Dhs 624.3m from disposals in the first half of the year.

The latter figure had been boosted in the first half of 2014 by sales of a district cooling plant in Abu Dhabi’s Al Maryah island and aerospace business Abu Dhabi Aircraft Technologies (ADAT) to Etihad Airways.

Both offset a net gain in income from financial investments, which jumped to Dhs 1.7bn from Dhs 388.2m in the first half of 2014.

Revenues were near-flat at Dhs 15.9bn as higher contributions from its semiconductor and healthcare businesses were offset by lower revenues from its aerospace sector and from the sale of hydrocarbons.

“Despite challenging market conditions such as volatile commodity prices impacting certain businesses in our portfolio, the diversity of our asset base and prudent management enabled us to record positive results,” Carlos Obeid, Mubadala’s chief financial officer, said in the statement.

“As the economic situation remains unclear, we continue to carefully manage our operations and balance sheet.”

Mubadala, one of few state-controlled vehicles to publish results, also owns stakes in local companies such as Aldar Properties and Tabreed.