Tuesday, Jul 10, 2012

(This article was originally published Monday)

DUBAI (Zawya Dow Jones)--Bahrain's Mumtalakat Holding Co., the island kingdom's $11.18 billion sovereign wealth fund, reported a 335.8 million Bahraini dinar ($890 million) loss for 2011 as impairments on investments rose.

Mumtalakat, which holds state assets including Gulf Air and Aluminium Bahrain, took BHD316.5 million of impairment charges last year, up from BHD191.3 million in 2010.

While revenues grew, Mumtalakat's full-year 2011 overall losses widened compared with the previous year, when it reported a BHD265.1 million loss.

Mahmood Al Kooheji, who replaced Talal al Zain this year as Mumtalakat's chief executive, pointed to improvements in revenues and gross profits in a statement Saturday, saying the fund was in a "strong financial position". In future, he said, Mumtalakat will continue to help diversify Bahrain's economy and make future investments focused on Bahrain and the rest of the region.

Mumtalakat is one of the Gulf's smallest sovereign wealth funds. It reported assets worth BHD4.22 billion at the end of last year, down from BHD5 billion in 2010. The Abu Dhabi Investment Authority, the oil-rich Gulf region's biggest fund, has assets worth $627 billion, according to Sovereign Wealth Fund Institute estimates.

Bahrain's small fund has struggled in recent years, partly as a result of financial woes at Gulf Air, Bahrain's national carrier. In its statement, Mumtalakat said several "restructuring initiatives" were undertaken at Gulf Air last year to improve efficiency and reduce operating losses.

"However, the regional geo-political situation and higher fuel costs significantly affected the operations of Gulf Air and resulted in a higher operating loss versus the prior year," Mumtalakat's statement said.

Bahrain endured months of upheaval last year as its Shia population demanded a greater role in the country's society and political process. It was a flashpoint of last year's Arab Spring uprisings.

-By Asa Fitch, Dow Jones Newswires, +971 4 446-1685, asa.fitch@dowjones.com; Twitter: @ZDJnews

Copyright (c) 2012 Dow Jones & Co.

(END) Dow Jones Newswires

10-07-12 0340GMT