Waha Capital almost tripled its profit in the third quarter after it incorporated the performance of associated oil and gas firm National Petroleum Services for the first time.
Net profit in the period that ended September 30 jumped to Dh301.2 million from Dh107.1m in the year-earlier period, Waha said in a statement yesterday.
Waha incorporated third quarter results from Dubai-based National Petroleum Services (NPS) after it acquired 20.56 per cent of the company in June this year, it said.
NPS secured contracts worth Dh241.9m during the third quarter, bringing its total backlog to Dh2.70 billion.
Third-quarter gains for Waha also came from the aircraft leasing firm Aercap, whose earnings per share increased 117.6 per cent after the acquisition of International Lease Finance Corporation (ILFC).
AerCap acquired ILFC from global insurer AIG in May for $7.6bn.
Waha Capital acquired a 20 per cent stake in AerCap in 2010, which then rose to 26.3 per cent before its dilution to 14.1 per cent following AerCap’s acquisition of ILFC.
“During the third quarter, AerCap signed lease agreements for 84 aircraft, delivered 26 aircraft under contracted lease agreements, purchased nine new aircraft and closed the sale and part-out transactions of 15 aircraft,” the statement said.
Shares of Waha Capital jumped as much as 8 per cent yesterday on the Abu Dhabi Securities Exchange. At the close, the stock was up 6.9 per cent to Dh2.92. Waha Capital has offered equity investors an almost 40 per cent return on the shares since January.
“I do see value in Waha,” said Vijay Harpalani, an assistant fund manager at Al Mal Capital, a Dubai-based investment bank. “There is potential for decent appreciation.”
Also in the reporting period, Waha entered into a US$575m hedging deal to protect gains made from its investment in AerCap Holdings.
AerCap owns and manages 1,300 aircraft, according to information posted on its website. The company's customer portfolio includes Etihad Airways, Emirates Airline, Qantas, Aer Lingus, KLM-Air France and British Airways.
The hedging transaction places a minimum strike price of $42.39 per AerCap share and a maximum strike price of $61.23 per share on half of its shares held. Waha’s original investment was valued at $13 per share.
AerCap shares closed on Friday in New York at $44.17 each.
The transaction is described as a collar trade, which is an options strategy that controls losses in the event of a fall in the stock price while letting buyers assume more debt to finance a deal.
The transaction provides additional funding of $575m, which will be used to partially repay existing debt and fund new investment opportunities, the company said at the time.
This type of derivative arrangement was once common in the Middle East. Previous transactions include Aabar protecting its acquisition of a stake in Daimler in 2009.
In September, Waha Capital proposed a share buy-back programme for up to 10 per cent of outstanding shares. Approval from the stock market regulator, the Securities and Commodities Authority, was granted on October 19.
The programme will “allow its shareholders to directly benefit from the company’s continued profit generation”, the statement said.
halsayegh@thenational.ae
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