Mubadala Development has experienced a huge shift in its revenue mix in the past three years as it reduces reliance on energy.
Mubadala, a strategic investment company owned by the Abu Dhabi Government, yesterday reported a 22 per cent rise in revenues last year to Dh16 billion (US$4.35bn), due largely to the maturation of a range of non-hydrocarbon businesses it played a critical role in starting.
Those companies include Emirates Aluminum (Emal), an aluminium maker it built in partnership with Dubai's Dubal.
Emal's enormous smelter near Abu Dhabi's border with Dubai last year reached its full annual production capacity of 742,500 tonnes, and the partners are considering expanding its operations with a second phase of construction. Strata, an aircraft materials plant in Al Ain, opened in the middle of last year and shipped its first finished products in September.
It has initial production contracts worth more than Dh4.8bn, including a direct work deal with Airbus. And Mubadala's healthcare unit had its first profitable year last year. Aerospace manufacturing and maintenance businesses contributed 31 per cent of revenues, and infrastructure added 21 per cent.
The rise of such businesses helped to reduce Mubadala's reliance on oil and gas.
Oil and gas assets, including the pipeline and gas production company Dolphin Energy and the exploration and production business Pearl Energy, accounted for just 38 per cent of revenues last year, compared with 81 per cent in 2008.
"You're seeing two other units rise to prominence in our revenue mix," said Waleed al Muhairi, the chief operating officer of Mubadala. "Aerospace and infrastructure have each contributed significantly. What you're seeing is that part of our initial thesis at Mubadala is being played out, which means over time you're seeing more and more significant businesses coming on line, which are in turn diversifying the revenue base of Mubadala as we grow over time."
Continuing on that path of growth, maturation and diversification will be Mubadala's main priority this year, Mr al Muhairi said. But he said executing the strategy would be tough given the turmoil in financial markets and external shocks such as the earthquake and tsunami in Japan, and recent unrest in the Middle East.
"When we ended 2010, I think all of us collectively were wiping the sweat off our brows and saying it's been a rough two and half years, we came out OK, we weathered the worst and I think we acquitted ourselves pretty well," Mr al Muhairi said.
"Then all of a sudden you see what's happening all around you in 2011.
"With all the shocks that are happening to the system, nobody would have guessed that 2011 could also be a time of volatility.
"We're going to have to manage through that. I think 2011 in many ways is going to be a thematic continuation of 2010 in the sense that you're going to see us making sure more and more of the businesses move from the start-up phase to the delivery phase, as we see more and more revenue contribution across the different sectors."
Mubadala was founded in 2002 but has only recently grown into Abu Dhabi's main vehicle for economic diversification away from hydrocarbons.
It began reporting annual financial results in 2008, when it posted a loss of Dh11.8bn. Its profit for 2009 was Dh4.6bn.
The company is looking at a range of investment opportunities this year, Mr al Muhairi said, which include strengthening Emal's partnership with Dubal to control a larger piece of the aluminium supply chain.
The companies already jointly own a concession in Africa to mine bauxite, the source mineral for aluminium production.
"It's natural for [Emal] to have continuing dialogue [with Dubal], especially when things are going well, which they are, and think about how we can deepen those partnerships and how we can look at strategic opportunities," he said. "That is an ongoing dialogue but there is nothing definitive yet."
Another focus this year will be deepening joint-venture partnerships Mubadala has formed with international companies.
It has an $8bn commercial finance joint venture with General Electric, and is one of the biggest investors in the US-based conglomerate's shares. The venture, Mubadala GE Capital, has deployed about $2bn in loans so far, said Carlos Obeid, the chief financial officer of Mubadala.
"The JV [joint venture] was profitable from year one," Mr Obeid said. "We have currently about 65 people and we anticipate another year of good growth."
Mubadala also has significant holdings in property and technology. It is behind the project to create the capital's new financial district on Sowwah Island, of which central parts are expected to be completed this year.
It is also a major shareholder in the US microchip maker Advanced Micro Devices and owns the company's semiconductor manufacturing operations through a subsidiary called the Advanced Technology Investment Company.