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IHC shows resilience with growing asset portfolio and financial solidity during the first quarter 2020


Total assets grew AED 4.9 billion in 1Q 2020 to AED 8.9 billion, aided by acquisitions of AED 4.3 billion

• Net profit increased AED 103 million year-on-year to AED 112 million, including acquisitions contribution of AED 68 million
• Improved net profit margin of 15.7% for 1Q 2020 compared with 4.9% in 1Q 2019 from improved operational management and accretive acquisitions
• Covid-19 resilience initiatives implemented by IHC and portfolio Companies

Abu Dhabi, UAE: International Holding Company PJSC (ADX: IHC) today announced its financial results for the first quarter ending 31 March 2020. Based in Abu Dhabi, the Company was established in 1998 as a fish farming company, as part of an initiative to introduce new business concepts, and to diversify and grow non-oil business sectors in the UAE. During 2017, the company repositioned itself as a holding company for strategic investments and was renamed IHC. Subsequently, the company has sought to diversify its strategic holdings across a growing number of sectors (including Food, Utilities, Real Estate, Digital Technology, Industrial and Capital) through acquisitions and the restructuring of its businesses.

Total assets grew AED 4.9 billion during the first quarter of 2020 to reach AED 8.9 billion. This growth was mainly attributable to two acquisitions concluded on 1 January 2020, as business combinations with common shareholding, which jointly contributed AED 4.3 billion to asset growth.

These acquisitions comprised the following:

• Acquisition of 100% of the issued share capital of Al Tamouh Investments Company LLC, one of Abu Dhabi’s leading real estate developers, focused on building sustainable communities on Reem Island.
• Acquisition of 100% of the issued share capital of Al Seer Marine Supplies and Equipment Company LLC, the region’s foremost marine company, with expertise in vessel design, manufacturing, repair and maintenance.

Commenting on the 1Q results, Sheikh Tahnoon bin Zayed Al Nahyan, Chairman of IHC said: “IHC is confidently transforming into a multi-faceted global conglomerate. Despite headwinds from Covid-19, we are on a path of accelerated growth, focusing on the consolidation and reorganization of our operations in order to achieve stronger governance, higher agility and competitiveness. Our first and foremost objective is creating sustainable growth, increasing returns and generating value for our shareholders”

IHC’s cash generation and liquidity remained strong during the quarter, with cash and bank balances increasing by AED 656 million as at 31 March 2020, which will help support future working capital requirements and strategic investments.

Revenue for the first quarter of 2020 increased by AED 522 million from the comparable quarter of 2019 to AED 713 million, aided by the combined revenue contribution of the aforementioned acquisitions of AED 321 million. IHC’s net profit increased by AED 103 million year-on-year to AED 112 million, similarly boosted by acquisition contributions amounting to AED 68 million.

IHC Managing Director, Syed Basar Shueb said: “The world has witnessed unprecedented times during the first quarter of 2020. While the UAE’s leadership took decisive actions to successfully mitigate the effects of the pandemic at home, businesses across the globe are facing serious difficulties.

Many of IHC’s portfolio companies are stepping up to support the UAE’s efforts to combat Covid-19. Some of the holding’s initiatives include the redeployment of resources to the ‘frontline’ and assisting in the development of Field Hospitals across the capital. Others, led by IHC’s research team, focus on studies and trials to improve the recovery time of Covid-19 patients” Not all businesses have been equally affected by the new environment. While IHC’s trading, sports education and entertainment companies have been impacted in the short term, consumer, food and health businesses have been very successful in mobilizing to meet increased demand.

IHC’s strategy of diversification, stronger operational management and the acquisition of profitable businesses, is reflected in healthy gross and net profit margins of 28.8% and 15.7%