MANAMA: GFH Financial Group (GFH) yesterday announced its financial results for the fourth quarter and year ended 31 December 2019.
Net profit attributable to shareholders was $6.5 million for the fourth quarter compared with $10.6m in the last quarter of 2018, a decrease of 38.7 per cent. This was attributed to higher provisions from the group’s commercial banking subsidiary.
Earnings per share for the fourth quarter was US cents 0.19 compared with US cents 0.30 for the last quarter of 2018. Income for the fourth quarter was $81.66m, up slightly from $80.87m during the fourth quarter of 2018.
Net profit attributable to shareholders for the full year was $80.1m compared with $114.1m for the prior year, a decrease of 29.8pc resulting primarily from higher provisions in the commercial banking subsidiary of the group.
Earnings per share for the year was US cents 2.37 compared with US cents 3.22 in the corresponding period in the previous year. Total equity attributable to shareholders was $1 billion at 31 December 2019 from $1.06bn at 31 December 2018, a decrease of 5.7pc due to additional acquisition of an infrastructure project and treasury share buyback programmes. Total assets of the group were $5.9bn at 31 December 2019 compared with $5bn at the previous year end, an increase of 18.2pc. Total assets plus fund under management increased from $8.5bn in 2018 to $10bn in 2019.
Fund raised during the year reached $2bn in equity and money market, a 100pc increase from 2018.
GFH concluded six transactions for a total deal value of $557m across the UK, US and GCC markets.
Revenue for the year was $335.69m versus $286.17m for 2018, an increase of 17.3pc. This reflects continued growth and progress in the group’s core investment banking business, increased contributions from real estate activities and strong performance in the group’s growing treasury business.
The board of directors has recommended the distribution of cash dividend of 5.57pc ($50m) for 2019 to shareholders, subject to approval by the general assembly and regulators.
GFH chairman Jassim Alseddiqi said, “For the year, the group was pleased to report continued growth and progress and a subsequent double-digit increase in income for 2019. While results were impacted by higher provisions in our commercial banking operations, we were pleased to announce another dividend as well as good overall performance and profits reflecting the continued successful implementation of our strategy, further diversification of our business lines and sound financial position. During the fourth quarter, we approached the debt capital markets in a landmark transaction for the group.
“The overwhelmingly positive response that we received is no better testament to where GFH stands today and market recognition and confidence in the group and where we are heading. We went on to announce in January 2020, the successful pricing of a $300m five-year sukuk, which was ‘B’ rated by S&P and Fitch, and oversubscribed 2.5 times exceeding $750m. Importantly, this included strong demand from international investors who were allocated 47pc of the issuance further diversifying our sources of funding and building GFH’s brand with global investors.
“These proceeds will be used to fund our next phase of development in 2020 and beyond. With solid foundations and the strides we have made over the past year, the group’s focus now continues on growth, diversification and value creation for our investors and shareholders.”
Chief executive Hisham Alrayes said, “We have achieved good growth and results from across our core business lines, which characterised the group’s performance in 2019. We had to restructure our commercial banking operations for stronger contributions in the future, hence we have been impacted by provisions.
“However, investment banking income for the year has witnessed a substantial increase, more than doubling as a result of our strengthened focus and success in identifying and placing unique income generating investments. Key among these was continued growth of our portfolio of real estate assets in the US market where we have now concluded investments in excess of $1bn over the past five years.
“Similarly, we also saw significantly improved contributions from our real estate activities where we advanced our landmark projects launching sales in a number of our iconic developments including Harbour Heights where units were sold to regional and international investors as well as achieving well-timed and profitable exists.
“Our newly established treasury line also exceeded expectations supporting income growth and adding further diversification to our business. These constitute three key areas of our business that we will be working to further diversify and grow in 2020.”
Mr Alrayes continued, “During the year, we were pleased to launch our Britus Education platform through which we will continue to grow our position as a leading regional and international investor in this promising defensive sector in addition to other sectors where we have been active during the year and see continued opportunities. Furthermore, during 2020, we will begin our operations in the Saudi Arabian market where we have established a presence and are poised to accelerate the growth of our investments and activities.”
Mr Alrayes added, “We are excited for our next phase of growth in 2020 and have entered the year in a strong operating and financial position and with the full confidence of the market following the successful placement of our five-year sukuk. I would like to take this opportunity to thank our shareholders and investors for their continued support and extend our gratitude to our board and regulators for their guidance. I’d also like to thank our dedicated and hardworking teams for their ongoing efforts and the critical part they play in our success and our efforts to continue delivering value for our shareholders, investors and the economies in which we are active.”
The group’s full financial results can be found at Bahrain Bourse’s website.
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