National Investments Company Holds Financial Analysts Conference for Q3 2023 Results
National Investments Company held the Financial Analysts Conference for its Q3 2023 results on Sunday, 19 November 2023. The conference witnessed the positive participation of Mr. Girish Nair, the company’s Chief Financial Officer, Mr. Bashar Khan, Senior Vice President of the Investment Banking Sector, Mr. Al Muthana Al Maktoum, Executive Vice President – Wealth Management Sector. They presented a brief about the company’s financial results achieved in Q3 2023, which proved that NIC is taking practical steps in strengthening its leading position and achieving sustainable future growth and that the company. In pursuit of its strategic goals, NIC always seeks to focus on core investment activities by attracting and seizing many investment opportunities, thanks to the flexibility of its business model and its prudent diversification strategy to strengthen its position and enhance its sustainable growth prospects.
Mr. Girish Nair, Chief Financial Officer on NIC, has presented a detailed report on the financial position of the company during the nine months ended September 30, 2023, of which the company achieved a total income of KD9.0 million, a net profit of KD2.5 million and earnings per share of 3.2 fils, as shown in the income statement, compared to the same period of 2022, where the total income reached KD17.2 million, a net profit of KD8.8 million and earnings per share of 11 fils.
He pointed out that the return on average shareholders’ equity and return on average assets up to Q3 2023 based on net profit amounted to 1.4% and 1.0%, respectively, and the leverage ratio reached 25.6% as of September 30, 2023.
Mr. Girish added that the company’s net book value amounted to 217 fils per share. The assets under management as of credit amounted to KD1.06 billion as of 30 September 2023. Compared to the same period in 2022, the net book value amounted to 245 fils per share, and assets under management amounted to KD1.17 billion.
A comparison of the performance during the third quarter of 2023 as compared with the performance of the same period in 2022, indicates that the net loss amounted to KD1.7 million compared to a loss of KD3.2 million in 2022, and the comprehensive loss of KD1.5 million decreased during the current quarter compared to KD2.5 million in 2022. The Kuwaiti All Share index recorded a decline of 2% during the three months of the third quarter of this year, compared to a decrease of 4.3% for the comparative period of 2022.
The first nine months of 2023 witnessed a decline in NIC’s net profit attributable to shareholders of the parent company, and total income during the cumulative nine-month period ended 30 September 2023 decreased by 71% and 48%, respectively, due to the increase in losses in the company at fair value through profit or loss and a decrease in dividend income earned during the nine months of 2023, compared to the corresponding period in 2022. The performance reflects the changes witnessed in the past three quarters in the financial statements due to macroeconomic factors and the tightening of monetary policy measures adopted by various central banks, as the Kuwait All Share Index recorded a decline of 5.6% during the last nine months of 2023, compared to a gain of 0.9% during the comparative period of 2022.
On the other hand, Mr. Girish explained that the fees for management, incentives, brokerage, consultancy, and services during the nine months ended September 30, 2023, amounted to KD6.4 million compared to KD8.3 million for the corresponding period in 2022. The decrease was mainly due to lower brokerage income from the subsidiary, lower trading volumes on Boursa Kuwait, and lower management fees from funds and portfolios.
He went on to say that the administrative expenses amounted to KD6.6 million for the current period of 2023 and amounted to KD7.0 million for the corresponding period of 2022. Financing costs amounted to KD1.2 million for 2023, higher than KD 0.8 million for the corresponding period. This increase resulted from successive increases in the discount rate from the Central Bank of Kuwait since the end of the previous period.
“The main contributor to the other comprehensive loss of KD6.3 million for the nine months ended 2023 is the impairment of investments listed in the GCC at fair value through other comprehensive income.” He clarified.
To conclude his presentation, Mr. Girish explained that total assets and shareholders’ equity attributable to the parent company reached KD239.3 million and KD172.7 million, respectively, as of 30 September 2023, compared to KD270.9 million and KD198.8 million for the year ended 31 December 2022, a decrease of 12% and 13%, mainly due to dividend payout.
Performance of the Main Sectors
Mr. Bashar Khan, Senior Vice President of the Investment Banking Sector, went through the main
highlights of Q3 2023 for some of the company’s key sectors. MENA Securities Sector has maintained outstanding performance, as the top three investment funds achieved exceptional performance during the nine months of 2023. Mawarid Fund for Industrial and Petroleum Services achieved a positive return of 7.48%, and Zajil Services and Telecommunications Fund completed a return of 5.63%. Al Mada Investment Fund gained a positive performance of 2.62 %. These exceptional results reflect the sector’s fund management expertise and ability to deal with market fluctuations effectively.
The sector offers investment products and services that meet diverse risk appetites and objectives. This confirms the sector’s keenness to provide different investment mandates to suit our client’s objectives and constraints. NIC has also been a leader in Market Maker since its launch in 2021 during the third quarter of 2023 and its ability to renew key market maker contracts for the company’s existing clients.
As for the Real Estate Investment Sector, due to the active management and improvement of the company’s properties, the sector has been instrumental in enhancing the overall performance of the company’s real estate portfolio, as the sector team has implemented targeted asset management strategies, such as property renovations, rental negotiations, and operational improvements, to maximize rental income and increase the value of real estate. By actively monitoring market trends and tenant demands, the sector has been able to make decisions that increase the value and profitability of real estate assets.
During the third quarter of 2023, the real estate portfolio achieved a commendable collection rate of 77%. It maintained a strong occupancy rate of 87%, and two portfolio management contracts were signed to commence in October.
Mr. Bashar Khan has confirmed that NIC focuses on four strategic elements to grow the business and enhance its competitive position: building assets under management, enabling technology and competencies, improving governance, and developing banking investment leadership within the market sector.
As for building assets under management, which is built on three leading enterprises, where advisory services are developed in an organized manner, with a focus on venture capital and international real estate products, the company is building a solid team by adding qualified bankers to support growth, in addition to creating a solid reputation to bring joint investment opportunities to the company’s investors, such as Boursa Kuwait, Kuwait Foundry Company, Lidl France and The Farm.
Mr. Bashar Khan addressed the second element of the strategy, which is enabling technology and competencies, as the company focuses its efforts on digital flexibility, investing in digitizing operations, developing work environments, ensuring sustainable business growth, and adhering to the company’s digital strategy, which leads to many services, including online trading, the client platform, real estate system development, in addition to the digital subscription system service.
NIC has also achieved leadership in Investment Banking through the company’s execution of transactions and focus on middle-income clients, in addition to building a specialized operational team with full knowledge of capital markets and debtor capital.
Concerning enhancing governance, which is one of the elements of the NIC’s strategy, he pointed out that the company continues to improve the risk management framework to align with international best practices.
At the end of the conference, NIC affirmed its commitment to communicate with its customers and shareholders and keep them informed of company developments through the quarterly analysts’ conference.