Abu Dhabi: A ramp-up of semiconductor production in the New York plant of its subsidiary Globalfoundries has helped Mubadala Development Company — an investment arm of Abu Dhabi government, to record a 455 per cent jump in its profits to Dh1.1 billion during the first half of the current year, up from Dh198 million for H1 2011.
This was “driven by a combination of increased operating income, improvements in the fair value of investments and lower impairments,” the company said in a statement.
Its operating income grew to Dh2.2 billion for the period compared to Dh402 million for H1 2011, driven by contributions from Globalfoundries as well as increases in income from investments in equity accounted assets. Revenues increased 18 per cent to Dh16.0 billion compared to Dh13.5 billion for H1 2011, driven by revenues from Globalfoundries, Mubadala Petroleum, Mubadala Aerospace assets, and Yahsat.
The company’s total assets increased by 10 per cent from Dh177 billion as of the end of 2011 to Dh195 billion at the end of June 2012. Total equity increased by 18 per cent from Dh106 billion as of the end of 2011 to Dh125 billion as of the end of June 2012, primarily due to additional cash contributions from Abu Dhabi Government, Mubadala’s shareholder.
“The results demonstrate continued growth of the business both in the UAE and internationally, and prudent risk management in challenging market conditions,” it said.
Khaldoon Khalifa Al Mubarak, Mubadala CEO and Managing Director, said: “Against a backdrop of global economic volatility, our interim financial results demonstrate ongoing delivery against our mandate. We continue to support Abu Dhabi’s economic diversification through investments in priority sectors, the development of social infrastructure, and the generation of economic returns for our Shareholder.”
Additionally, its energy, telecom, aerospace and real estate subsidiaries helped the company to achieve such a strong result. Mubadala Petroleum’s South East Asia business continued to grow with higher than expected oil production in Thailand from the Jasmine Field, and finalisation of development plans for the Manora Field. In the UAE, the Emirates LNG Terminal project remains on schedule.
In the aerospace business, Strata Manufacturing won a landmark contract from SABCA for the Airbus A350 XWB flap track fairings work package, adding to its existing Airbus flap track fairing work packages for the manufacturer’s fleet of A330, A340 and the A380 aircraft. SR Technics signed an engine maintenance service agreement with Spice Jet while ADAT signed a seven year integrated component solutions agreement with Ethiopian Airways to cover the Boeing 737NG fleet.
Prudent investment, backed by the UAE’s position as a hub has helped Mubadala to post such strong results. “UAE is a regional hub and has benefited as a safe haven in a period of regional turmoil,” said a recent NBAD report.
“A number of new Abu Dhabi developments were delivered... Abu Dhabi has attracted back some of the people who used to live in Dubai,” which is helping large investors to gain from the upturn.
In real estate, the development of Al Maryah Island continued with the completion of Sowwah Square Office Towers 2, 3 and 4 also helped in earlings. In addition, the Galleria at the Sowwah Square development on Al Maryah announced a commitment from over 90 top global retail brands, corresponding to over 85 per cent of the development’s available retail space.
Mubadala subsidiary EMAL achieved the milestone of 1.5 million tonnes of hot metal produced in just two and-a-half years since its commissioning in December 2009.
Mubadala’s credit ratings were recently reaffirmed amongst the top corporate ratings in the region at Aa3/AA/AA by Moody’s, S&P and Fitch, respectively.