Dubai: Mubadala Development Company said on Thursday its revenues for the first half of the year jumped five per cent year-on-year to Dh14.3 billion from Dh13.6 billion in the first of 2015. The revenues were offset by higher costs, which jumped 27 per cent to Dh15.6 billion, the company said in its financial report on its website.

The company reported a net loss of Dh4.4 billion (attributable to the owner of the group) in the first half of the year due to lower commodity prices and lower gains from financial investments.

The Abu Dhabi government-backed investment firm’s loss marks a significant plunge from the Dh625.5 million in profits reported in the first six months of 2015.

Net gains from financial investments in the first six months were Dh328 million, representing an 80 per cent decline from the Dh1.6 billion seen in H1 2015.

“The global economic challenges we have faced since the beginning of 2015 persist. That said, we continue to develop priority sectors and industry champions in line with Abu Dhabi’s long-term vision,” said Khaldoon Al Mubarak, Mubadala’s group chief executive officer and managing director in a statement.

Net income in most of Mubadala’s key sectors such as technology, industry, aerospace and engineering, energy and real estate and infrastructure was lower year-on-year. The energy segment recorded a profit of Dh168.8 million in the first half of this year — down 64 per cent year-on-year, while the aerospace and engineering segment saw Dh1.2 billion in losses — down from Dh604 million in profit in the same period last year. The health care segment recorded an increase, however, with its profits up to Dh77.6 million from Dh18.7 million in H1 2015. The group’s total assets as of June 30, 2016 stood at Dh233 billion — down from Dh246 billion as of December 31, 2015.

Mega merger

In late June, His Highness Shaikh Mohammad Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces and Chairman of the Abu Dhabi Executive Council, issued a resolution to merge Mubadala and International Petroleum Investment Company (Ipic).

The merger will create a company with total assets of around $130 billion whose investments span sectors like petrochemicals, aerospace, semiconductors, and aluminium.

“Combining the two companies will create one of the largest state-owned investment funds globally, which will be dedicated to Abu Dhabi’s economic diversification and have the scale to accelerate new and existing global industrial champions,” said Mubadala’s Al Mubarak, who is also the vice-chairman of the joint merger committee.

In late July, Mubadala said it will be buying a 20 per cent stake in Investcorp, the Bahrain-based alternative investment firm. The two-step transaction will see Mubadala acquire a 9.99 per cent ownership stake immediately, with another 10.01 per cent after receiving the regulatory approvals.