Kamco Invest cuts 9-month losses to $4.5mln

Equity funds and managed portfolios continued to outperform their respective benchmarks

  
A Kuwaiti investor looks onto the trading floor at the Kuwait Stock Exchange in Kuwait City, Kuwait. Image used for illustrative purpose.

A Kuwaiti investor looks onto the trading floor at the Kuwait Stock Exchange in Kuwait City, Kuwait. Image used for illustrative purpose.

Getty Images/Graeme Robertson

Kuwait-based Kamco Invest, a financial powerhouse, has posted a net profit of KD2.5 million ($8.15 million) in Q3 2020 (Q3 2019: net loss of KD0.178 million) reducing the 9-month losses to KD1.4 million ($4.5 million) (9M 2019: net profit of KD0.932 million).

The company reported earnings per share stood at 7.41fils in Q3 2020 (Q3 2019: -0.75 fils) and -3.95 fils in 9M 2020 (9M 2019: 3.93 fils).

The results were impacted by Coronavirus pandemic which disrupted government entities, the private sector, and economies since March 2020. Brent Crude Oil and the MSCI GCC Index dropped by 65.5% and 24.6%, respectively, during the first quarter.

During the second and third quarters, markets around the world witnessed partial recovery and most of the markets remained in the red in terms of YTD-20 returns. Brent Crude Oil and the MSCI GCC Index narrowed their losses to end the nine months of the year losing 38.0% and 8.8%, respectively. Simultaneously, the Company reported profits in Q2 and Q3 of KD0.7 million and KD2.5 million, respectively.

On the business level, the slow of business since March 2020 had a negative impact on the fee & commission income which dropped by 9.4% compared to same period of last year to reach KD11.8 million in 9M 2020. Despite the unprecedented challenges, negative sentiments and the slow of business, the company continued to provide its clients with interruption-free services and distributed cash dividends to its shareholders for the fiscal year 2019 amounting to KD1.7 million in June 2020.

As at the end of September 2020, total assets under management stood at KD3.9bn (USD12.6bn). Equity funds and managed portfolios continued to outperform their respective benchmarks and three funds were recognized by the 2020 Refinitiv Lipper Fund awards for their consistent risk-adjusted performance relative to peers.

During Q3 2020, the company reduced its total liabilities by KD13.3 million, a reduction of 14%, to reach KD82.3 million at the end of September 2020.

The Company enjoys a strong financial position with KD51.7 million in shareholders’ equity as of 30 September 2020 and a “BBB” long-term credit rating and “A3” short-term rating with stable outlook by Capital Intelligence in their latest review in June 2020.

Faisal Mansour Sarkhou, Chief Executive Officer, said: “Despite the extremely difficult economic and operating conditions, we managed to report positive results in the third quarter, reduced our total liabilities, rationalized our cost base and most importantly retained the level of our recurring fee-based income. Furthermore, we were able to sign new mandates, close deals, attract new clients and raise funds for new and existing products.”

“We have expedited our digitization drive while ensuring our existing systems and processes handled the situation of remote working and serving of our clients. We will continue to monitor new trends and behavioural changes that will inevitably lead to the formulation of new standards and investment opportunities after overcoming the current crisis,” he added. – TradeArabia News Service

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