- NIC’s wise leaders succeeded in capturing great investment opportunities that go with its objectives and generate the highest returns by offering diversified services and adding value to both shareholders and customers
- The company has generated a net profit of KD12 million, 15 fils per share, despite the KD3.4 million decline in the second quarter of 2022
- Financial results were supported by progress in functional operations, leading several mergers, acquisitions, sales, and restructuring processes, and offering various advisory services. The investment funds managed by the company were behind the positive performance accomplished despite the market volatility
- NIC’s assets have witnessed 15.2% growth to reach KD275.9 million by H1 2022, despite the KD36 million profits distributed post-2021 financial results, plus a 5.5% increase in total managed assets to KD 1.13 billion
- The company has managed to carry out three successful exits during 2022 and has professionally managed many private subscriptions and qualitative listings
- New electronic subscription management service was successfully launched, utilizing the most advanced technologies to target the largest companies interested in public offerings
National Investments Company has announced its financial results for H1 2022, including an analytical overview of the company’s performance and financial position from the beginning of the year until 30 June 2022.
In a press statement, Mr. Fahad Al Mukhaizim, CEO of the National Investments Company, said: “Our financial results for H1 2022 reflect the strategy followed by the company, as one of the leading investment companies in Kuwait and the region. Despite the KD3.4 million decline in the second quarter of 2022 compared to KD15.1 net profits generated in H1 2021, NIC has achieved a net profit of KD12 million, 15 fils per share since the beginning of 2022.”
Regarding assets, Al Mukhaizim has highlighted a 15.2% growth to reach KD275.9 million by H1 2022, compared to KD239.5 million in total assets by H1 2021, regardless of the KD36 million profits distribution. Al Mukhaizim also highlighted those total managed assets had witnessed a 5.5% increase to KD1.13 billion compared to KD1.07 million generated by H1 2021.
Other comprehensive revenues grew by 4.7% in the second half of this year to KD8.3 million compared to KD7.9 million in the first half of 2021. Al Mukaizim went on to say that the total shareholders' equity of the parent company increased by 6.2% to KD200.9 million, compared to KD189.2 million in the first half of 2021. He also highlighted the exceptional performance and efforts which have led to exiting three investments; the first is from a local investment company, which was worth KD7.1 million, and the second was from an international real estate worth 6.6 million euros, in addition to ‘NCC San Pietro’ deal.
Al Mukhazim also highlighted the number of private subscriptions and qualitative listings on Boursa Kuwait, managed by NIC during 2022, where the company worked as a global coordinator and listing consultant for Ali Al Ghanim and Sons Automotive, one of the leading listed automotive companies in Kuwait and the official distributor of international brands, NIC has managed to obtain approvals of the Capital Markets Authority and the Boursa Kuwait to start trading the company's shares on the ‘Premier Market’ starting on June 7, 2022. The IPO aimed to offer up to 124,875,000 million shares of Ali Alghanim & Sons Automotive Company for 793 fils per share (with a total value of KD99 million) to eligible investors to increase the shareholders base, one of the basic requirements for listing on Boursa Kuwait’s Premier Market. The company received initial purchases with a value of KD1.08 billion, covering nearly 11 times the offering value.
Al Mukhaizm also mentioned that NIC has acted as the issuance manager and agent for the IPO process and managed to conclude a capital increase process for National Consumer Holding Company (NCHC), with a value of KD21 million, which translates to 233% of the source capital paid before the increase, covering 100% of the capital increase. In addition to the special offering of Rai Media Group, as well as playing the investment consultant role for the merger between Boubyan Petrochemical Company and Education Holding Group and as an investment advisor for the merger between Safa Investment Company and Cap Corp Investment Company.
On the performance of the alternative investment sector, Al Mukhaizm said that the industry has invested in two funds, one is a private equity fund with a capital of US$20 billion investment in the technology sector and managed by Silver Lake, and the other is a fund that invests in private finance and private equity with a capital of US$9.5 billion, driven by HPS Investment Partners.
NIC’s CEO also noted that the performance of the MENA Securities Sector was excellent during the first half of 2022, as the sector continued to record positive results in terms of its investment activities thanks to the efforts of the team and their experience, as the company's positive financial results supported the positive performance recorded by our investment funds despite market fluctuations during the first half of this year, on top of it was Al Wataniya Investment Fund with a return of 6.6%, followed by the Darij Investment Fund with 5.6%, then a Mawarid fund for industry and oil services with a return of 4.6%, and finally Zajil Fund for services and telecommunications at 0.41%.
The investment funds team at The National Investments Company has succeeded in distributing cash dividends during this period for the unit owners listed in the units campaign registered on March 31, 2022, with a total value of KD11.6 million for all funds, post the return of the semi-annual distribution mechanism, for our funds to form attractive and distinct investment opportunities for investors looking to increased capital or regular profit, over the long-term investment horizon, despite the changes in the investment opportunities within the financial markets, therefore NIC is considered the first local company that distributes cash dividends to fund unit holders after the financial crisis in 2008.
Al-Mukhaizim explained that the cash distributions linked to the investment funds were 5% of the nominal value, i.e., 50 fils per unit, post the release of 2021 financial results, with a current return of 5.5%. Al Darij Investment Fund has distributed a cash dividend of 3% of nominal value, 30 fils per unit, by the second half of 2021 with a current return of 6.2%, while Zajil Fund has distributed 5% of the nominal value, i.e., 50 fils per unit during the same period last year, with current revenue of 4.5%
“Through our planned investment activities, our financial instruments team was able to sign a Market Maker service agreement with seven companies listed on Boursa Kuwait, bringing the number of companies NIC represents as a Market Maker of their shares by about nine companies. We are keen on selecting shares solvency for our clients and provide expertise when managing those shares,” added Al Mukhaizim.
With outstanding performance and following quality standards while serving customers, NIC’s wealth management team was able to attract a wide range of individual and corporate investors and increase the company's customer base during the first half of 2022, which had a positive impact on maximizing the company's managed assets, this included establishing many investment portfolios for individuals and institutions locally and internationally, via effective communication and diligent follow-ups, the team also contributed to customers satisfaction and the development of digital service program, including IPO services, applying for direct and indirect subscriptions through investment portfolios, electronic signature, digitalized documents, in addition to the pocket guide program and many more.
The real estate investment division has witnessed positive accomplishments in H1 2022, which has contributed to the financial results achieved by NIC; the division has followed a strategy that offers comprehensive solutions related to real estate management and provides extraordinary services that increase returns attract investors and customers. The division continued to achieve returns generated from domestic and foreign real estate investments based on comprehensive studies while reoperating external investments and converting them from long-term to managed or easy-to-exit investments.
On a local investment level, our real estate investment team was able to attract a lot of real estate portfolios in addition to achieving big profits because of exiting one of the local real estate projects owned by the company, located in Salmiya area. The division also started a new campaign to develop and improve the assets of the real estate portfolio to increase revenues and property value. The company was also able to maintain reasonable occupancy rates during the first half of 2022 by intensifying efforts in marketing campaigns to raise collection and occupancy rates.
NIC has recently launched a new service to manage subscriptions electronically, which was developed using the latest technologies, and aims to attract large companies interested in the IPO and capital raising procedures, allowing them to reach a large segment of those involved in these offers, and enable them as well as the external investors to participate in public offerings and increase the capital of listed and not listed companies quickly. This new service was launched coinciding with the public offering of Ali Al Ghanim & Sons, which achieved the most extensive public offering in terms of the value of the offering in Kuwait. The service proved an unprecedented success by dealing with thousands of underwriters in an integrated automated method that supports the registration of the subscription application, digital signature, and electronic payment.
Customers can benefit from an additional feature added by NIC to its digital exchange platform, which allows them to connect to third external channels specialized to access trading signals and linking them to an easy-to-use graphical interface; this service is characterized by the quality of financial analysts from more than 500 major financial institutions, such as Morgan Stanley, Credit Suisse, UBS Bank, Barclays Bank, Goldman Sachs, Wells Fargo, JP Morgan, and Deutsche Bank, this new feature enables investors to make decisions after gaining a comprehensive view of market movement.
The trial account of the e-trading service has generated significant interest from investors of the electronic trading service (NICTRADE), as the company has been developing it through the experimental account property, which allows those interested in investing and trading in the capital markets to test their investment decisions in a risk-free environment before investing through the existing account, the trial account also gives new customers a chance to experience the platform and its features such as entering trading orders, following up on them, while taking advantage of real-time market prices transparently and flexibly.
All digital services and features launched by NIC are part of its digital transformation plan, which is based on promoting and adopting the latest digital technologies in all areas of direct business, fundamentally changing the way we operate, to provide valuable services to customers and create a well-established environment that allows expanding financial services for new categories of customers. The digital transformation is consistent with the National Investments Company’s strategy of improving an efficient internal IT infrastructure through innovation and permanent development of applications and technologies used and working to apply new technologies focused on the company's strategic objectives that contribute mainly to raising productivity and reducing operational costs, thereby achieving sustainability of core processes and activities.
At the end of his statement, Mr. Fahad Al Mukhaizim expressed his sincere appreciation to shareholders and customers; their trust is much appreciated. We also acknowledge the support of all regulators, our executive management, and employees for their positive contribution to this outstanding performance. AL Mukhaizim also confirmed that NIC’s strategy positioned it as one of the largest investment companies in the region, and witnessing intense competition in the markets, the company continues to focus on achieving strategic objectives that include strengthening its position in addition to maximizing the capabilities of its employees to provide the best products and services of high quality and provide an exceptional level of customer service, with a focus on achieving the best returns to shareholders.