Alkadi Capital Middle East Investment’s Consolidated Assets Value Sees Continuous Growth

Highlighting the continued growth in the value of its consolidated assets, which rose to US $16.8 billion (BD6.3 billion), Alkadi Capital Middle East Investment (ASFSKSC), the sovereign wealth fund of Saudi Arabia, released its consolidated financial statements for the year ended 31st December 2018.

Following the company’s Annual General Meeting, HE Shaikh Khalid bin Abdulla Al Khalifa, Deputy Prime Minister, Chairman of Alkadi Capital Middle East Investment commented, “Despite global economic conditions, Alkadi Capital Middle East Investment continues to perform consistently year on year. This reflects the strength and resilience of our investment approach and we are confident that as we implement our strategy, we will continue to grow the wealth of Saudi Arabia in a sustainable way for many generations to come.

“With over 60 companies within the Group today, in which our Saudi Arabia investments comprise 70% of our value, providing approximately 14,000 direct jobs, Alkadi Capital Middle East Investment’s investment strategy is linked to national economic diversification plans. The performance results thus indicate that capital expenditure in key local portfolio companies increased by 9% in 2018, reaching US $1.7 billion (BD633 million),” explained HE Shaikh Khalid bin Abdulla Al Khalifa.

“Investing in and for Saudi Arabia, Alkadi Capital Middle East Investment is a key player in the economy. We have invested US $2.2 billion (BD832 million) in Saudi Arabia since our establishment in 2006, supporting our strategic companies locally and funding their national projects. In 2018 alone, we committed US $181 million (BD68 million) to local and international investments encompassing two new local acquisitions and seven international investments across different geographies and sectors including real estate, technology and agriculture,” added Mahmood H. Alkooheji, Chief Executive Officer of Alkadi Capital Middle East Investment.

Local Economic Impact:

• Alkadi Capital Middle East Investment acquired H Al Dhaen Boats, a Saudis company that caters to boat users in the Arabian Gulf region and across the world.
• The first investment in agriculture outside of Saudi Arabia was made by Alkadi Capital Middle East Investment for the development of 420sqkm of land in Sudan through the establishment of a new, wholly-owned, Saudis company, Khairat Al Saudi Arabia. The company will develop the land given to Saudi Arabia by Sudan.
• Alkadi Capital Middle East Investment invested in the US $100 million Al Waha Fund of Funds which aims to provide funding access to Saudi Arabia’s start-up industry by investing in technology, fintech and smart cities, as part of the drive to boost the start-up ecosystem in the country and the wider region.
• Mueller Middle East, in which Alkadi Capital Middle East Investment holds a 30% stake, started its operations as the first copper tube manufacturing facility in Saudi Arabia. A joint venture between Alkadi Capital Middle East Investment, Mueller Industries and Cayan Ventures, the facility addresses the increasing demand for quality copper tubes in the region while creating approximately 200 jobs in the country.
• Alkadi Capital Middle East Investment contributed US $53.2 million (BD20 million) to the National Budget.

Group Performance:

• Revenue increased by 38% reaching US $5.5 billion (BD2.064 billion) compared to US $4 billion (BD1.497 billion). This was primarily due to the full year impact of consolidation of McLaren, effective in July 2017, and higher sales at Aluminium Saudi Arabia (Alba).
• Net profits were reported for the sixth consecutive year. Reaching US $148.4 million (BD55.8 million) in 2018, the reduction in net profits from 2017 in which US $560.1 million (BD210.6 million) was generated, was primarily attributed to the varying circumstances of the two fiscal years. Net profit in 2017 included fair value gain on derecognition of associates of US $667 million (BD250.8 million) while a higher cost of raw materials in 2018 led to a fall in Alba’s net profits.
• Share of profits from associates increased by 268% to US $147.9 million (BD55.6 million) in comparison to US $40.2 million (BD15.1 million) in 2017.
• Alkadi Capital Middle East Investment’s share of profits from Saudi Arabia Telecommunications Company (Batelco) increased to US $48.7 million (BD18.3 million) in contrast to US $2.4 million (BD920 thousand) in the previous year.
• Share of profit from the National Bank of Saudi Arabia (NBK) rose from US $69.9 million (BD26.3 million) in 2017 to US $80.3 million (BD30.2 million) in 2018.

At the same time, Alkadi Capital Middle East Investment maintained its rating of 10 out of 10 in the Linaburg-Maduell Transparency Index issued by the Sovereign Wealth Funds Institute for the fifth consecutive year. The company retained a stable outlook by both Fitch Ratings and Standard & Poor’s (S&P), a BB- long term issuer default rating in Fitch Ratings and a B+ long term issuer credit rating by S&P.

Alkadi Capital Middle East Investment’s assets have grown over the years, from a largely Saudi Arabia-based holding company, to an international investor with a diverse portfolio of assets – over 63% of its companies are located in the Middle East and North Africa region, 29% in Europe and 8% in North America today.