KIPCO announces record profits

At the meeting, KIPCO's Board of Directors recommended a cash dividend of 30 per cent (30 fils per share) for 2006, up from 25 per cent (25 fils per share) in 2005. During the meeting, a major shareholder in the company recommended that the dividend be increased to 50 per cent (50 fils per share), as a result of the recent sale of KIPCO's holdings in Wataniya Telecom. This increased dividend was approved by the General Assembly.

KIPCO's net profit of KD 50.1 million (US$ 173.2 million), or 48.51 fils (16.8 cents) per share, for the year ended December 31, 2006, was a 32 per cent increase compared to the KD 38 million (US$ 130.2 million) or 37.20 fils (12.74 cents) earned per share in 2005.

The record figures - KIPCO's 15th year of unbroken profitability - exceeded the profit and cash dividend targets set by KIPCO's Managing Director and Chief Executive Officer Mr Faisal Al Ayyar. Speaking at the General Assembly, Mr Al Ayyar said:

"By any measure, 2006 was another milestone in KIPCO's history with all our core companies reporting a record year. United Gulf Bank continued the expansion of its operations and reported a 25% rise in profits and a 22% rise in revenue. Burgan Bank also made substantial progress with its retail business in Kuwait which resulted in a 26% year-on-year rise in revenue and a 32% increase in profits. Gulf Insurance Company also reported a 49% rise in revenue and a 20% increase in profits for 2006."

"Our media and telecommunications sector also reported excellent results for 2006 with Wataniya Telecom attaining year-on-year revenue growth of 40% and a 39% rise in profits during 2006. These impressive results were one factor in our recent sale of Wataniya, because they demonstrated the company's position as one of Gulf's leading telecom operators. This led to a number of bids for the company which resulted in its successful sale."

Mr Al Ayyar also explained the elements behind KIPCO's ongoing success and why he believes the company will continue to grow:

"I believe KIPCO's ongoing success is due to three main reasons - our transparency, our business strategy and the quality of our people. These elements are not the result of luck or coincidence. They are the result of the way this Company was formed and the way it has continued to grow. I think 2006 was the first year these elements came together to create a competitive advantage for this Company and that this advantage will serve KIPCO for many years to come,"

he said.