Abu Dhabi's Mubadala swings back into the black

Mubadala Development rebounded to profit last year, helped by its units selling more microchips, oil and aircraft parts and an improvement in the value of investments around the world.

Mubadala, a strategic investment company owned by the Abu Dhabi Government, posted net profit of Dh455 million (US$123.8m), a turnaround from a Dh3.2 billion loss in 2011. Total comprehensive income reached Dh1.4bn last year after a loss of Dh4.2bn the previous year, mainly because of a slide in the value of financial and property investments.

"Our 2012 financial performance is a reflection of how we manage our portfolio, with certain key assets and projects reaching further maturity and improved market conditions positively impacting the value of many of our financial investments," said Khaldoon Khalifa Al Mubarak, the Mubadala chief executive and managing director.

"Looking ahead, we remain resolutely focused on building our globally integrated business, creating further opportunities for current and future generations and helping realise Abu Dhabi's ambition of becoming a diversified and innovation-driven economy."

Mubadala last year celebrated its 10th year of operation after being set up by the Abu Dhabi Government to help spearhead the development of the emirate and maximise returns on its oil wealth.

Revenues rose 12 per cent to Dh31.3bn last year, up from Dh27.9bn in 2011. A closer look at the revenue mix reveals the extent of Mubadala's diversification drive beyond its initial focus on hydrocarbons into new industries.

A total of 47 per cent of revenues came from GlobalFoundries, the semiconductor maker that Mubadala owns through its subsidiary, Advanced Technology Investment Company. Faster sales of wafers helped GlobalFoundries to become the world's second-largest semiconductor foundry by revenue during the year.

Mubadala's aerospace business contributed 18 per cent of revenue last year, helped by Strata Manufacturing delivering the first shipment of A330 ailerons - the moveable surfaces on the wing's trailing edge - from its plant in Al Ain to Airbus. It also struck multi-year deals to supply parts to Boeing.

Oil and gas continued to play a key part of operations. Mubadala Petroleum contributed to 21 per cent of its parent company's revenues, with working interest production averaging 378,000 barrels of oil equivalent per day.

But last year marked a milestone in an up and coming part of Mubadala's business. Yahsat, its satellite communications arm, booked a profit for the first time. It also launched Abu Dhabi's second satellite, Y1B.

"Mubadala continues to catalyse new centres of excellence, helping to further Abu Dhabi's position as a global leader in key sectors," said Mr Al Mubarak.

The company also benefited from a brighter outlook across global financial markets. Losses from financial investments pared to Dh1.4bn last year, from a loss of Dh3.03bn the year before. Impairments on property, plant and equipment investments eased to Dh585.4m, compared with Dh653m the year before.

The company this month signed a $2bn loan refinancing with banks, replacing a $2.5bn loan struck in 2010, Reuters reported last week, citing two unidentified sources. Nobody was available from Mubadala yesterday to comment on the issue.

Mubadala's total equity rose 28 per cent to Dh136bn last year, up from Dh106bn the previous year.

The Abu Dhabi Government injected Dh28bn into Mubadala last year, the same amount as the year before. At the end of 2011, the Executive Council approved a five-year plan for Mubadala, setting out the company's priorities up to 2016.

tarnold@thenational.ae