Amanat will remain 'discipled' in choosing its investments, Faisal bin Juma Belhoul, the chairman of Amanat’s board, said. Lee Hoagland / The National
Amanat will remain 'discipled' in choosing its investments, Faisal bin Juma Belhoul, the chairman of Amanat’s board, said. Lee Hoagland / The National

Business

Amanat Holdings quarterly profit rises more than five-fold

Amanat’s net profit in the three months ending March 31 surged to Dh9.5 million from Dh1.5m during the same period last year, the company said on Sunday.

Sananda Sahoo

May 08, 2016

The Dubai-listed healthcare and education company Amanat Holdings reported a more than five-fold jump in first-quarter net profit, thanks to its Al Noor Hospitals Group share sale and its Islamic finance products.

Amanat’s net profit in the three months ending March 31 surged to Dh9.5 million from Dh1.5m during the same period last year, the company said on Sunday. Amanat listed on the Dubai Financial Market in November 2014.

First-quarter revenue reached Dh16.6m, more than double that of the corresponding figure from a year earlier. It included Dh15.5m from Mudarabah and Wakala deposits and a gain of Dh1.1m from the sale of its remaining 3 per cent stake in Al Noor Hospitals Group. Amanat’s operating expenses was Dh9.4m during the period.

Abu Dhabi’s Al Noor Hospitals was acquired by the South African hospital chain Mediclinic in the first quarter.

Amanat shares closed up 0.12 per cent to 83 fils on Sunday. The price is down from 87 fils a year ago.

Amanat’s share of profit from its investment in the Saudi healthcare company Sukoon International Holding was Dh2.2m during the first quarter. Amanat invested a further 16.6m riyals (Dh16.2m) in Sukoon during the quarter, with its stake reaching 33.25 per cent. Its current investment in Sukoon stands at 195.8m riyals. Amanat invested 179.2m riyals for a 35 per cent stake in Sukoon last August.

The reduction in Amanat’s stake from 35 per cent to 33.25 per cent was owing to Sukoon’s 52.6m riyals capital increase, diluting Amanat’s holding.

“Amanat will continue to be disciplined in sourcing desirable opportunities in the healthcare and education sectors where there is significant potential for long-term growth,” said Faisal bin Juma Belhoul, the chairman of Amanat’s board.

The UAE healthcare sector has been growing as demand rises. For the 11 months ended February 29 2016, Mediclinic’s Middle East business – excluding Al Noor – recorded revenues of Dh1.39 billion. For the financial year ended in March last year, Mediclinic’s revenues from the UAE touched 4.3bn South African rand.

London-listed and Abu Dhabi-based NMC Health reported a 10.6 per cent jump in net profit to US$85.8m last year from a year earlier. Revenues touched $880.9m, a 36.8 per cent rise over 2014.

ssahoo@thenational.ae

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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