Public Markets business generates AED 94 million in net profit in H1 2022
Private Investments business records AED 28 million in net profit in H1 2022
Waha Land generates AED 20 million in net profit in H1 2022
Abu Dhabi, 4 August 2022 - Waha Capital PJSC, an Abu Dhabi-listed investment management company (ADX: WAHA), has reported a H1 2022 net profit of AED 98.7 million despite a challenging second quarter in global markets.
Waha Capital recorded a net profit of AED 98.7 million in H1 2022, versus AED 383.1 million in the same period last year. However, the company recorded a net loss of AED 101.4 million in Q2 2022, compared to a profit of AED 220.6 million in Q2 2021, as the significant fall in global markets was reflected in a decline in mark-to-market valuations for holdings in listed securities across the Public Markets and Private Investments businesses.
Despite adverse macroeconomic conditions, the Public Markets business, which manages emerging markets credit and equity funds, reported investment gains and fee income of AED 152 million for the first half of 2022. Meanwhile, the Private Investments business recorded net income of AED 92 million as it continued to deploy capital through its Global Opportunities portfolio. Finally, Waha Land generated income of AED 25 million in the first half of the year.
Waha Capital's total assets under management stood at AED 6.3 billion at the end of June 2022, an increase of 8.6% from AED 5.8 billion at the end of 2021.
Public Markets Highlights
Waha Capital's Public Markets investment teams have taken defensive positions in their exposure to global equity and credit markets since the beginning of the year. This has enabled the business' funds to mitigate the substantial fall in major global indices and significantly outperform their respective benchmarks.
The Public Markets business recorded a net profit of AED 94 million in H1 2022 versus AED 320 million in the same period last year. In the second quarter of 2022, the business reported a net loss of AED 54 million, compared to a net profit of AED 180 million in Q2 2021.
The Waha MENA Equity Fund produced a total return of 7.8% in the first half of the year, compared to 0.4% for the reference S&P Pan Arab Composite Index. The Fund has delivered a cumulative return of 264.5% since its inception in 2014, versus the S&P Pan Arab Composite Index's return of 64.5%.
The Waha CEEMEA Credit Fund returned -5.8% in the first six months of 2022 amid turbulence in global fixed income markets, significantly outperforming the -26.4% return by the reference JPMorgan CEEMEA CEMB Index. The Fund has delivered a cumulative return of 157.8% since its inception in 2012, compared to 34.6% for the reference index.
The Waha Islamic Income Fund returned -0.51% in the first half of the year, compared to -7.96% for the reference Dow Jones Sukuk Index. The Fund has yielded a cumulative return of 56.6% since its launch in August 2020, versus a return of -1.19% for the reference index.
Private Investments Highlights
The Private Investments business recorded a net profit of AED 28 million in H1 2022, versus AED 17 million in the same period last year. In the second quarter, the business recorded a net loss of AED 2 million, compared to a net profit of AED 10 million in Q2 2021. This was largely driven by mark-to-market losses on several of its listed investments.
In line with its long-term, multi-asset investment strategy, the business has continued to make investments through its Global Opportunities portfolio, bringing total assets under management to AED 1.1 billion as of 30th June 2022.
During the second quarter, the business successfully divested its stake in Bahrain-based Addax Bank.
Waha Land Highlights
The Waha Land subsidiary, which owns and operates a light industrial real estate development in Abu Dhabi, generated a net profit of AED 20 million in the first half of 2022, versus a net profit of AED 17 million in the same period last year. Net profit in Q2 2022 was AED 10 million compared to AED 9 million in Q2 2021. The property portfolio is currently 95% leased.
Waleed Al Mokarrab Muhairi, Chairman of Waha Capital: "Global capital markets have faced strong headwinds in the second quarter of 2022, with many of the world's major indices experiencing significant declines. Although Waha Capital's recent strategic realignment has helped to mitigate this volatility, the fall in mark-to-market valuations of the company's holdings resulted in it reporting a net loss for the second quarter.
With the macroeconomic uncertainty expected to continue over the coming months, the diversification of Waha Capital's public and private portfolios will provide strength and stability to investors and shareholders. The company has a robust financial position and continues to attract third-party capital to its funds, with assets under management increasing AED 500 million in the first half of the year.
Waha Capital remains committed to its long-term strategy and is well-placed to take advantage of a recovery in global markets to deliver value to our stakeholders."
Ahmed Khalifa Al Mehairi, Chief Executive Officer of Waha Capital: "Waha Capital remains focused on generating returns for our investors by prioritising prudence and sustainability. In the second quarter of 2022, we have navigated a challenging economic environment characterised by surging inflation, interest rate hikes, and ongoing geopolitical tensions.
Despite a notable reduction in our operating expenses, falling global markets have impacted our investments and resulted in the company reporting a quarterly net loss. However, the active management of our Public Markets funds into a more defensive position has enabled them to outperform their respective benchmarks in 2022. Meanwhile, the Private Investments business has continued to invest selectively through its Global Opportunities portfolio, while also realising value from its mature assets.
Although we expect our operating environment to remain challenging for the foreseeable future, our business remains resilient and well-positioned to deliver solid performance to our investors and shareholders once economic conditions begin to improve."