DUBAI: Bahrain’s Mumtalakat will remain profitable from now on, its chief executive said yesterday, as the sovereign fund ended five straight years of losses in 2013 due to improved performance at Gulf Air and lower impairments.
The fund, fully owned by the Bahraini state but run on a commercial basis, made a net profit of BD82.7m ($219m) in 2013 compared with a net loss of BD181.7m in the previous year, a statement said. The profit was driven “by significantly lower impairment losses and improved operating performance across portfolio companies, in particular Gulf Air”, the statement added.
“We are very hopeful that we are now on the right path and growth and profitability will stay with us going forward, that I can assure you,” Mahmood Al Kooheji, Chief Executive of Mumtalakat, said in a telephone interview.
“We’re out of the red and we’ll not be back there again, God willing.”
Mumtalakat has struggled in recent years due to problems in its home market, namely a local real estate crash followed by Arab Spring-inspired unrest in the Gulf Arab kingdom.
The fund has also been weighed down by Gulf Air, the loss-making carrier which has undergone a series of cost-cutting measures to help turn around its fortunes.
Bahrain’s national carrier, which cut routes and staff during a five-year restructuring, narrowed its net loss to BD95.4m in 2013 from BD183.8m a year ago.
For Mumtalakat, route closures fed through to a 5.6 percent dip in group revenue but this was offset by cost reductions at the airline.
“It’s a temporary drop (in revenue) and now we will grow slowly but surely, with routes based on commercial viability,” Kooheji said.
Reuters
