Waha Capital posts Q1 loss on AerCap revaluation

Waha Capital, which counts Abu Dhabi’s Mubadala Investment Company among its shareholders, swung to a net loss of Dh57.8 million in the first quarter of 2019, due to a revaluation of its investment in aircraft lessor AerCap Holdings.

“Although short-term market conditions have impacted some investments, notably AerCap, Waha Capital remains in a strong position to deliver sustainable growth and an attractive return on equity in the coming years,” said Waleed Al Muhairi, chairman of Waha Capital.

The Abu Dhabi investment company’s earnings dipped to a net loss in the three months to March 31, from a net profit of Dh107.4m in the year-earlier period, it said in a filing to the Abu Dhabi Securities Exchange, where its shares are traded.

Whereas the company posted a revenue of Dh102.4m for the first three months of last year, its total revenue for the 2019 quarter fell into negative territory at Dh189.9m, the filing showed.

Waha Capital’s earnings lagged mainly due to a net loss of Dh165.7m recorded by the private investments business in the quarter, largely due to an adjustment of Dh100m following a reassessment of the value of Dublin-based AerCap Holding’s recoverable amount. During the period, Waha Capital also recorded a loss on the disposal of 3 million shares in AerCap – equivalent to a 2.1 per cent stake valued at Dh490m – “as equity price collars on the shares matured and were settled”, the company said.

During the period, AerCap carried out a share buy-back programme, in which Waha Capital did not participate. The company’s stake in AerCap stood at 10.3 per cent at the end of March, down from 12 per cent at the end of December 2018.

At the same time, Waha Capital’s asset management business, which manages emerging market fixed income and equity funds, recorded a net profit of Dh151.7m – up 28 per cent year-on-year.

“The funds, which have consistently outperformed key indices over several years, continued to deliver strong returns, while assets under management have also increased to Dh2.7 billion,” the company said. The value of assets under management stood at Dh2.5bn at the end of the fourth quarter of 2018.

The company also benefited from a rise in income at its healthcare investment, Anglo Arabian Healthcare, in the quarter, and invested a further Dh87.5m in Dunia Finance.

Oil and gas services company Petronash, in which Waha Capital acquired a 35 per cent stake last August with an option to increase to 50 per cent, recorded a rise in revenue to $36m, while Dubai's FinTech company Channel VAS, in which Waha holds a 19.5 per cent stake, reported a 29.8 per cent year-on-year revenue rise to Dh55m.

“In recent quarters, tough global market conditions have affected certain investments, and this has been reflected in the bottom line,” said Waha Capital’s chief executive Michael Raynes.

“However, the fundamentals of the company remain strong. “[Waha Capital’s management] remains focused on prudent financial management and pursuing new growth opportunities in the coming years.”

Updated: May 12, 2019 12:30 PM