NIC Holds Analysts Conference for Q1 2024

The National Investments Company (NIC) held its Analysts Conference for Q1 2024 on Sunday, 12 May 2024. The conference saw the positive participation of Mr. Girish Nair, NIC’s Chief Financial Officer; Mr. Bashar Khan, Managing Director of the investment Banking Sector; Mr. Al Muthana Al Maktoum, Managing Director – Wealth Management Sector, who presented a brief about the company and shed light on the positive financial results achieved in Q1 2024. These results were a testament to the success of the company’s prudent strategy and the expertise of its team by consolidating the sustainability approach and its outstanding performance and operational achievements, which helped to enhance its financial position, thereby maintaining high-quality assets and making the shareholders feel secure about their investments. The Financial Performance Mr. Girish Nair provided a comprehensive overview of NIC’s financial position during the conference. He emphasized the significant improvement in our financial performance, with the company achieving a total income of KD8.4 million, a net profit of KD4.1 million, and an earning per share of 5.1 fils, as indicated in the income statement of Q1 2024. This represents a substantial increase compared to the same period of 2023 when the total income was KD2.1 million, the net profit was KD1.1 million, and earnings per share were 1.3 fils. These key figures demonstrate our robust growth trajectory and the promising future of NIC. He pointed out that the return on average shareholders’ equity and return on average assets reached 2.2% and 1.7%, respectively, and the leverage ratio reached 29.6% in the first quarter of this year. He said the net book value amounted to 246 fils per share and assets under management to KD1.07 billion, compared to 217 fils per share and assets under management to KD1.05 billion as of 31 December 2023.  The Assets under management was KD 1.09 billion as on 31 March 2023. Mr. Girish Nair also emphasized the substantial growth in NIC’s financial performance. The company’s consolidated net profit for Q1 2024 increased by 403%, reaching KD4.4 million compared to KD0.9 million in the first quarter of 2023. Similarly, the total income for the three months ended March 31, 2024, witnessed a remarkable 300% increase, reaching KD8.4 million compared to KD2.1 million in the first quarter of 2023. This impressive growth is primarily attributed to the profits earned by NIC from financial assets listed at fair value through profit or loss, as the S&P Kuwait index recorded a rise of 7.5% during the first quarter of 2024 compared to a decrease of 3.3% during the first quarter of 2023, should make all stakeholders feel optimistic about NIC’s future. He also highlighted that the fees for management, incentives, brokerage, consulting, and services during the first quarter of 2024 amounted to KD2.4 million compared to KD2.3 million for the corresponding period in 2023.     Administrative expenses increased to KD2.6 million in the first quarter of 2024, compared to KD2.2 million in the corresponding period of 2023, in line with the increase in operating income. Financing costs increased to KD0.6 million, compared to KD0.4 million last year, due to the rise in discount rates from the Central Bank of Kuwait and new loans. The other combined comprehensive income amounted to KD18.5 million during the first quarter of this year, compared to a loss of KD7.1 million in the first quarter of 2023, due to the increase in the valuation of GCC investments listed at fair value through other comprehensive income; thus the total comprehensive income for the first quarter of this year reached KD22.9 million compared to a total comprehensive loss of KD6.2 million in the first quarter of the year 2023.  Total assets and shareholders’ equity attributable to the parent company amounted to KD277.7 million and KD195.8 million, respectively, compared to KD249.3 million and KD173.3 million for the same period last year. Around 80% of our total assets are investments, 11% are real estate, and the rest are cash and other assets. Key Sectors Performance Mr. Bashar Khan referred to the milestones achieved during the first quarter of 2024 and said that the company’s strategy is based on four key elements that help grow the business and enhance its competitive position: building assets under management, enabling technology and competencies, developing investment banking leadership in the market, and improving governance. Regarding building assets under management, NIC has focused on three main initiatives: developing advisory services in an organized manner, focusing on venture capital and international real estate products, and for this, the company is building a solid team through a selection of qualified bankers to support future growth, in addition to focusing on the established reputation to bring joint investment opportunities to the company’s investors. Examples include Boursa Kuwait, Kuwait Foundry Company, Lidl France, and The Farm, and the management is launching the first private real estate trust fund in Kuwait. The second element of NIC’s strategy focuses on enabling technology and competencies; the company is committed to taking advantage of the latest digital business technologies, including artificial intelligence, to drive work flexibility, productivity, and efficiency, ensure business sustainability, and adhere to the company’s digital strategy, which provided many services, including electronic trading, customer platform, real estate system development, in addition to the digital subscription system service.  Concerning developing investment banking leadership, the third element of the strategy, the company built a dedicated team with full knowledge of the capital and debt capital markets and experience in executing successful transactions in Kuwait, where the company completed one of the largest mergers and acquisitions in the education sector, in addition to the first issuance of preferred shares in Kuwait. In line with continuous development and improvement, the company is strengthening its teams by attracting first-class professionals, and four new members were welcomed.  Enhancing governance, one of the elements of NIC’s Strategy, Mr. Bashar Khan pointed out that the company continues to improve its risk management framework to include quantitative and qualitative metrics in line with international best practices and its commitment to supporting the highest standards of corporate governance and providing a solid foundation for sustainable growth and success. He also added that the MENA Securities Sector maintained its outstanding performance, as NIC’s investment funds achieved exceptional performance, reflecting the extent of management’s excellence and success in adopting strategies aimed at achieving financial returns for the company’s clients and superior to its counterparts in the market. Therefore, such exceptional results reflect the sector’s expertise in managing funds professionally despite the volatility of the financial markets.   NIC has also succeeded in providing the ‘Market Maker’ service since its launch in 2021; during the first quarter of this year, NIC was able to add two new contracts, bringing the total number of companies that benefit from its market-making service to 13, and for the Real Estate Investment Sector, it maintained a substantial collection and occupancy rates, and the sale of a real estate portfolio was recently completed in line with the company’s strategy. Mr. Bashar Khan presented many cases that are clear examples of the company’s ability to seize opportunities and implement them in the market. One example is Boursa Kuwait, which is an idea to invest in acquiring a strategically important asset with intense, frequent, and sustainable cash flows due to its leading position in the market. The second example is the acquisition of the original quotation of a company with a substantial value much greater than the prevailing market value, and most of the company’s shares were reinstated in this deal.Examples include financing a facility to buy, rent, and sell real estate for storage in one of the European countries; the real estate was sold and re-leased by Lidl, and the project is still achieving a return over two and a half years; and other investment projects that took place in one of the United States of America. At the end of the conference, NIC affirmed its commitment to continuing regular and permanent communication with its customers and shareholders and to regularly inform them of developments in the company through the quarterly analyst conference.