National Investments Company Announces Financial Results for 2020
• NIC Board of Directors recommends distributing cash dividends, the highest during the past ten years, 11 fils per share
• Shareholders’ equity increased by KD 1.25 million
• Total assets increased to KD 221.392 million
• 2020 impact on the local economic situation, affecting achievements and challenges
• NIC achieved net profits in Q4 approximating KD 5.3 million
• Total assets managed by the Company exceeded KD One billion at the end of 2020, despite the global economic recession and declining investment values.
• The upgrade of the Boursa Kuwait is a clear indication of the success of the Capital Markets Authority in achieving its strategic orientations
• We are proud of the successful and distinguished advisory role played by NIC in listing the Boursa Kuwait Securities Company on the Premier Market and achieving capital gains for shareholders.
• Shareholders’ equity amounted to KD 174.982 million, after the distribution of 9 fils per share cash dividends of paid-up capital for 2019
• We managed to maintain a superior performance for most of our investment funds. Mawarid Industrial and Petroleum Services Fund achieved a return of 3.93%, Zajil Services and Telecommunications Fund achieved a return of 10.10%, and Al-Mada Investment Fund achieved a return of 4.52%
• Our qualification as a Market Maker aims to provide liquidity and create high turnover rates
• Our Advisory Services Department achieved market-leading performance and returns despite unforeseen market conditions in 2020
• We continue to provide support and services to all customers during the lockdown, as our global real estate investments continued to distribute quarterly returns to customers without interruption despite Covid-19 pandemic.
• Restructuring and developing the Real Estate Investment Sector has increased the volume of real estate portfolios managed for third parties by 24%, and expenses decreased by 17%
Mr. Hamad Al-Ameeri, Chairman of the Board of Directors of National Investments Company (NIC) emphasized that the repercussions of Covid-19 pandemic hitting the world’s markets have proved that solid entities are the most resilient at the face of the pandemic, as demonstrated by NIC over the past year with its solid financial position.
Al-Ameeri said that NIC has maintained its stability and has made every effort to preserve its achievements during the repercussions of Covid-19 pandemic and its impacts on the local and global economy during 2020, reflecting the success of the strategy adopted by the Board of Directors and implemented by an experienced Executive Team.
Al-Ameeri revealed the Company’s financial results for the year ended 2020, where the Company made a loss through the statement of profits and losses by KD 2.65 million. In return the Company’s comprehensive income and reserves increased by KD 3.9 million, which reflected positively on shareholders’ equity achieving a hike of KD 1.25 million during the fiscal year ended December 31, 2020. In Q4 2020, the Company made profits through a statement of income amounted to KD 5.3 million. Based on these results, the Board of Directors recommended to the General Assembly a cash dividend distribution of 11 fils per share, which is the highest in the past 10 years. This reflects the Company’s solid financial position and the cash abundance that the Company has always maintained in the face of market volatility and capturing investment opportunities.
Al-Ameeri also highlighted the total shareholders’ equity of the Parent Company, which amounted to KD 174.982 million, after distributing cash dividends to shareholders of 9 fils, at a value approximating KD 7.2 million.
The total revenues reached KD 8.995 million, while the total expenses and provisions recorded to KD 11.233 million.
Managed Assets in 2020
Al-Ameeri said that the total assets under trust managed by the Company exceeded one billion Kuwaiti Dinar at the end of 2020, despite the global decline in investment values and the negative market performance, pointing out that the total value of assets increased to KD 221.392 million, a hike of 3.02% compared to KD 214.901 million for the corresponding period of 2019.
Al-Ameeri pointed out that the Company managed to report these good financial results despite the disruption of work seen worldwide in 2020 with the aim to reduce the spread of the novel corona virus. The economic scene was full of hot events that negatively affected the performance of the Boursa Kuwait. The Coved-19 pandemic was the most prominent and deepest event affecting all aspects of life, starting from the health aspect, then the economic aspect, and extending to the social aspect. In view of all these challenges and geopolitical fluctuations that are still seen in all GCC markets and the global markets, NIC has followed deliberate plans, which demonstrate the success of the Company’s objectives and its capabilities in dealing with all developments, and that the achieved financial results were a reflection of a long-term strategy adopted by the Company’s BoD, and implemented by the Executive Management with high professionalism.
Al-Ameeri also emphasized that these plans are mainly grounded on two important pillars; diversification of sources of income and reducing risk, praising the efforts made by the Company’s Executive Management, that is always working to translate the aspirations of the Board of Directors that spares no effort to meet the aspirations of shareholders and customers.
Al-Ameeri underlined that shareholder confidence is the main incentive for the Company and even the mainstay of its efforts and continuity in achieving more achievements, especially in the exceptional circumstances experienced by all markets.
Al-Ameeri praised the tireless efforts made by the Company’s team and its continued support for the “National Investments Company” journey, which helped to made the successes and achievements seen today during this hard time and under the pandemic repercussions that hit all sectors, stressing at the same time to move forward towards exerting further effort to preserve the Company’s earnings, hoping to achieve more progress and excellence in the coming days.
Al-Amiri said that the file of Boursa upgrade and accession to the MSCI Emerging Markets Index has also been affected by Covid-19 pandemic where MSCI Company postponed the Boursa Kuwait listing date to November instead of May, due to the repercussions of the pandemic and its impact on the ability of global investors.
He noted that the extraordinary achievements recently made by the Boursa Kuwait call for highlighting first, the decision of “FTSE Russell” to upgrade the Boursa to its emerging markets index in the second half of 2017, then a second upgrade through Standard and Poor’s Dow Jones in December 2018, and last but not last of the third upgrade in the “MSCI Index”, which took place on November 30, 2020, in which the Boursa attracted foreign inflows of about USD 2.9 billion.
Al-Ameeri said that these upgrades are a clear indication of the success of the Capital Markets Authority (CMA) in achieving its strategic trends it has been pursuing for several years. This is also an indication of the success of the exerted efforts and the cooperation of all other parties related to the capital markets system.
He said, “There is no doubt that these upgrades have tangible positive implications, as they confirm that Kuwait’s financial markets have possessed the required level of regulation, which is fair, competitive, transparent and able to protect investors and traders in securities activities on the one front, as well as the high volume of institutional and foreign investments directed to the Boursa, and encourage acquisitions by international institutions on the other front.”
Listing of Boursa Kuwait
Al-Ameeri said, “We are proud of the important and distinct advisory role played by the National Investments Company in listing the Boursa Kuwait Securities Company on the Premier Market within the Financial Services Sector, where the listing was carried out after thorough study of the market conditions and coordination with the relevant authorities, which yielded in providing a promising investment opportunity for the investment community through that listing.”
Al-Ameeri pointed out that the listing of Boursa Kuwait is the first event of its kind for a Boursa wholly owned by the private sector to list its shares in itself in the Gulf regions which is globally known as “Self-Listed Exchange”. This listing will undoubtedly enhance the position of the Boursa Kuwait on the regional level among other stock exchanges in the region.
In a related context, Mr. Fahd Al-Mukhaizim, the Chief Executive Officer at NIC affirmed that NIC always relies on developing multiple perceptions and plans, to remain fully prepared to deal with any changes that may occur in the region’s markets to ensure the stability and balance of the Company’s performance.
Al-Mukhaizim said that the good performance achieved by NIC is the fruit of collective cooperation of the Company’s all staff, departments and sectors, extending his appreciation to the BoD and all employees of the Company, pointing out that there is a package of additional tasks and objectives NIC is pursing to achieve in order to keep pace with the fluctuations in the markets due to the repercussions of Covid-19 pandemic.
Al-Mukhaizim affirmed that NIC is always keen to develop a holistic plan for dealing with the challenges and developments that occur on the local, regional and global markets, aiming to keep abreast with them with decisions and procedures through which it maintains the Company’s assets and the rights of its shareholders.
Al-Mukhaizim pointed out that the total equity attributable to the equity holders of the Parent Company reached KD 174.982 million at the end of 2020, taking into account that the Company distributed cash dividends of 9 fils per share at a total of KD 7.181 million of the paid-up capital for 2019.
Income of the Company
Al-Mukhaizim affirmed that the total income at the end of 2020 reached KD 8.995 million, while the Parent Company managed to achieve a total of KD 6.1 million as management fees for the assets it manages, and the consultancies and all types of commissions, compared to KD 4.5 million in 2019.
Al-Mukhaizim said that MENA Quoted Investments Sector is one of the main resources of the Company’s operating revenues, which gives it privacy and a pillar in dealing with the downturns that may occur in the markets, similar to what happened in 2020.
Al-Mukhaizim said, “We at NIC managed to preserve a superior performance for most of our investment funds as this Sector ably succeeded in maintaining its leadership through the outstanding performance of its products in 2020.”
Al-Mukhaizim said that Mawarid Industrial and Petroleum Services Fund which invests in Shari’ah compliant local and Arab equities achieved a return of 3.93%. Zajil Services and Telecommunications Fund which invests in Shari’ah compliant local and Arab equities also achieved a return of 10.10%. Al Mada Investment Fund which invests in Shari’ah compliant GCC equities achieved a return of 4.52%.
Undoubtedly, the outstanding performance of most of our investment funds in 2020 has reflected the success of the Executive Management in adopting effective and sustainable strategies able to apply rigorous and accurate business techniques and practices, capture investment opportunities with growth potential and achieve excellent financial returns with appropriate risk management.
Al-Mukhaizim said that NIC products constitute attractive and promising investment opportunities for every investor looking for a regular profit over long-term investment horizons, even in light of the rapid and successive changes markets is witnessing.
Al-Mukhaizim added that NIC has been qualified as a Market Maker and aims to provide liquidity and to create high turnover rates.
Al-Mukhaizim said that, in line with the Company’s decision to provide the Market Maker service at the Boursa Kuwait, the IT and E-Trading Sector in coordination with other sectors at the Company, has provided one of the best trading platforms for the Market Maker, and the project was successfully implemented and ensured its suitability to work in the Company.
Al-Mukhaizim said that the Advisory Services Department at NIC possesses excellent know-how and experience in identifying, negotiating and implementing the sources of prominent transactions in the local and regional markets.
Al-Mukhaizim highlighted the Advisory Team that provided market-leading performance. The Department has successfully invested in three Venture Capital Funds (one regional and two international), a trust fund managed by Goldman Sachs & Company, and another fund that invests in infrastructure. The Department has also implemented Real Estate Investment Trusts (REITs) Program, which achieved a return of 42.3%. The portfolio consists of 7 US, 4 European and 3 UK funds carefully selected from the original list of more than 350 REITs stocks. Despite the unforeseen market conditions in 2020, the Department managed to exit two old investments of the portfolio through swap transactions. The Department also intends to continue capturing profitable investment opportunities and strategic exit from the investment portfolio in 2021.
The Advisory Team also provided a market-leading performance. It acted as a sales advisor to the owners of a major food company with the aim of selling the company to another GCC leading food and beverage company. The Advisory Team also succeeded in listing the Boursa Kuwait Securities Company on the Boursa, making it one of the best performing listings in the past five years. It also acted as a buying advisory for the Boursa Kuwait, supporting its acquisition of a majority stake in Kuwait Clearing Company (KMC). It also acted as the acquisition manager of the mandatory acquisition proposal of Kuwait & Middle East Financial Investment Company (KMEFIC). The Advisory Team also provided advisory services on the evaluation and strategy for two leading technology companies. Nevertheless, the Advisory Team participated in the provision of pre-IPO consultancy to a family group, and completed a restructuring of a consumer services company.
Al-Mukhaizim revealed that NIC is currently finalizing the launch of the online portal system which allows customers to follow their investments on a real-time basis while giving them the ability to execute orders in a direct and effective manner, with other features such as comprehensive analysis of their investments of portfolios and funds in an innovative way as well as providing more holistic solutions to achieve their investment objectives.
Wealth Management Sector
Al-Mukhaizim referred to the challenges faced by the Company with all its sectors over the past year on the back of the Covid-19 pandemic, including Wealth Management Sector, under the volatility of markets and the lockdown imposed in Kuwait and other major regional markets.
He noted that the concerned team took the necessary actions and measures through the implementation of an advanced Business Continuity Plan (BCP) through which support was provided to all customers during the lockdown, during which the Company continued to provide high quality services to customers, pointing out that the Wealth Management Team played its continuous role in serving customers, increasing managed assets, and attracting new customers whether individuals or local and regional corporate.
Al-Mukhaizim said the team has rehashed all methods and means of communication with the Company’s customers to enhance the level and quality of the services, improve their experience with the Company and maintain the level of transparency provided to them.
Real Estate Investments
Al-Mukhaizim emphasized that the performance of the Real Estate Investment Sector was positive despite the economic crisis, pointing to the restructuring of the Real Estate Investment Sector to improve its performance in terms of strengthening the team with an elite of competencies working in the real estate sector. The Company has taken certain concrete measures to reduce expenses, and at the same time it granted discounts to support tenants in some buildings in order to back them during the economic crisis.
He pointed the development of business procedures and intensification of marketing efforts for units. In the light of these efforts, the volume of the real estate portfolios managed for third parties increased by 24% and expenses decreased by 17%.
Global Awards and Achievements
Al-Mukhaizim also highlighted the most important awards won by the Company in 2020 thanks to its fruitful efforts which contributed to its continuous achievements and success during 2020, including “Best Investment Company Kuwait 2020” from Global Business Outlook, “Best Gulf Investor Relations Company 2020”, the “Fastest Growing Investment Company Award” in Kuwait and “World’s 100 Best Classification Award For Real Estate Management” from Global Banking & Finance Awards, “Best Asset Manager Company” in Kuwait for the Year 2019 from MENA Fund Performance Awards 2020 and “Best CSR Initiatives Towards COVID-19 Award” from the Global Economics 2020
Appreciation and Gratitude
In conclusion, the Chairman of National Investments Company, Mr. Hamad Al-Ameeri extended thanks and appreciation to the members of the Board of Directors, the Executive Management and all staff of the Company for their continuous efforts to achieve this performance that is always in line with the Company’s strategic plan despite the hard circumstances facing the world.
Al-Ameeri also expressed his wishes asking Allah almighty to safeguard Kuwait and its people from all evil and harm, and to raise this scourge from Kuwait and the whole world.