Mumtalakat reports first set of financial results

Having been created in June 2006 to be an independent holding company for the Government of Bahrain's non-oil and gas assets, Mumtalakat now has a total of 35 commercial enterprises within its $10bn portfolio. Its investment strategy is to enter into partnerships with local and international institutions targeting opportunities for long-term, sustainable financial returns.

Between 29 June 2006 and 31 December 2007, Mumtalakat generated net income of BD245.8m from total revenue of BD1.8bn. Total assets stood at BD5.3bn at the period end, with shareholders' funds increasing to BD3bn.

During the period, Mumtalakat began to execute upon its strategy of securing long-term growth opportunities whilst developing the value of its current portfolio of assets. One of its more notable acquisitions was that of a 30% stake in McLaren Group Limited, the parent company of the Vodafone McLaren Mercedes F1 racing team. Mumtalakat also took full control of Gulf Air during the period, consolidating its previous 50% shareholding. This has enabled Mumtalakat to work closely with Gulf Air's management team to put together a strategy to help re-build Bahrain's national carrier for future growth.

Sheikh Ahmed bin Mohammed Al Khalifa, Chairman of Mumtalakat, said:

"Mumtalakat's ultimate ambition is to create long term financial value on behalf of Bahrain. It is an ambition that carries with it a great responsibility to create value on behalf of not only shareholders and employees, but, also the people of Bahrain. Our team of investment and management professionals has accepted this responsibility and are building a world leading investment company capable of delivering that goal."

"We have already made significant progress in our plans and the current financial climate offers, we believe, a wealth of opportunities for long term investment returns. As economies and markets slow around the world, we intend to execute upon investment strategies that will capture financial value over the long term. We are also targeting the investment opportunities of local and regional economies and markets, as the rapid economic development of the GCC region continues apace based on historically high prices of oil and the increasingly economic diversification strategies now being pursued by the GCC states," he added.

Talal Al Zain, CEO of Mumtalakat, commented:

"Since its formation in June 2006, Mumtalakat has made significant progress, as demonstrated in our first set of financial results. A lot has changed since Mumtalakat's inception. The long bull run of the global financial markets has finally come to an end, changing many of the certainties that we had accepted for so long. Despite the downturn in markets and the negative outlook for economic growth over the short to medium term, there is still value to be captured and developed. For those with the right strategy, funding and insight, the tougher market conditions will offer up a wide range of investment opportunities."

He said, "Our overall investment goal is to create a balanced portfolio of national, regional and international investments to achieve high returns and spread risk through geographic and industrial diversification. Given our current portfolio is largely domestic in nature, we will be looking increasingly at international and regional investment opportunities. We will be targeting opportunities in specific market sectors such as financial services, telecommunications, real estate, food, hospitality and leisure, transportation and renewables. Largely, we will seek minority positions in our investments and will seek to offer our portfolio companies added value through knowledge and expertise as we develop our global talent resource. Occasionally we will consider taking controlling positions."

"From the outset, it has always been Mumtalakat's policy that it should operate international levels of corporate governance both within Mumtalakat and across its portfolio companies. Only with such standards can we hope to achieve our investment goals. By implementing high levels of corporate governance we are able to recruit the right people to represent our interests on the boards of our investee companies and ensure that they bring with them not only the management tools of operational assessment and strategy review, thus enhancing the business' operational excellence, but, also offer the added value we can bring in terms of innovation and knowledge. Transparency in everything we do also means that our intentions and investment objectives are clearly understood by outside audiences. As a commercially orientated investment company, this enables us to be far more efficient in selecting and executing upon growth opportunities as and when they arise," Al Zain added.

"With a clear strategy in place, it is now our responsibility to execute upon it and deliver long term financial growth. We believe that the current market situation offers an investment company such as ourselves plenty of opportunity. I look forward to reporting on our progress in next year's Annual Report," he concluded.