Markets Update: Mubadala Development made a loss of Dh4.2 billion (US$1.14bn) last year as the financial crisis squeezed the value of its investments around the world.
Mubadala reports Dh4.2bn loss linked to global financial crisis
Mubadala Development made a loss of Dh4.2 billion (US$1.14bn) last year as the financial crisis squeezed the value of its investments around the world.
The company's total comprehensive loss, which combines operating profits from its seven main industry sectors and paper losses on investments, exceeded the Dh338 million loss made in 2010, it said today.
"While our financial investments' performance were impacted by the volatility in the global marketplace during 2011, we continue to maintain a long-term financial investment perspective," said Khaldoon Khalifa Al Mubarak, the chief executive and managing director.
A drop in the value of Mubadala's investments and a slide in property prices were the primary drivers of the loss, said Mubadala, a strategic investment company owned by the Abu Dhabi Government.
Operating income, which includes profits from businesses including oil and gas, health care and semiconductors, declined to Dh1.2bn last year from Dh2.6bn in 2010. The decline reflected more investments in semiconductor manufacturing as well as research-and-development expenditure, Mubadala said.
Revenue rose by 77 per cent to Dh27.9bn last year, partly because of the consolidation of Advanced Technology Investment Company (Atic), which owns Globalfoundries, a maker of semiconductor chips. Atic was transferred to Mubadala's stable in February last year.
Revenue growth was also driven by rising energy prices, and the expansion of Mubadala's aerospace business. Strata, a subsidiary making high-tech aircraft parts, became a tier-one supplier to Boeing in November, while last year also marked its first full year of shipping wing components to be used on the Airbus A330.
Revenue was also increased by Mubadala's expanded shareholding in the Abu Dhabi district cooling company Tabreed.
Mubadala's total equity rose by nearly 71 per cent to Dh106bn last year from Dh62bn in 2010. The transfer of Atic provided an additional Dh21bn to the equity, while the Abu Dhabi Government injected Dh28bn, up from Dh13bn the year before.
As a result of the transfer of Atic and Tabreed and the issuance of bonds by Mubadala, total liabilities rose to Dh71bn last year. The firm's debt-to-capitalisation ratio dropped to 29.6 per cent from 30.2 per cent in 2010.