x Abu Dhabi, UAEFriday 21 July 2017

Aabar stock rises as earnings jump

The biggest shareholder of Daimler, sees its profits more than double after it built up stakes in industries as diverse as space travel and Formula One car racing.

Aabar Investments, the biggest shareholder of Daimler, saw its profits more than double last year after it built up stakes in industries as diverse as space travel and Formula One car racing. The performance capped an active year for the company as it emerged on the world stage as a major investment vehicle for the Abu Dhabi Government through a flurry of eye-catching acquisitions. Also last year, the International Petroleum Investment Company (IPIC), a government energy investment fund, assumed 71 per cent majority ownership of Aabar. Aabar said full-year net profit rose to Dh1.68 billion (US$457 million), from Dh721m a year earlier. The results sent its stock to its highest in three weeks on the Abu Dhabi Securities Exchange, gaining 4.1 per cent to close at Dh2.31.

"The support granted by its parent shareholder, IPIC, has played a significant role in this success with IPIC's contribution of Dh6.68bn in capital and access to its pipeline of high-quality investment opportunities," the company said. Aabar has spent more than Dh25bn on building stakes in companies that include the German car maker Daimler and the UK aerospace firm Virgin Galactic. It also acquired 30 per cent of Brawn GP last November. In March, it took a 9.1 per cent stake in Daimler, the world's second-biggest luxury car maker. That was followed by the acquisition of a 3.64 per cent stake in the California electric car maker Tesla Motors, worth $23m.

In the latest sign of Aabar's ambitions to diversify its holdings, it said last month it aimed to acquire 70 per cent of Arabtec, the UAE's biggest builder, in a deal worth Dh6.4bn. That would also give the investment firm a foothold in Saudi Arabia, where Arabtec formed a subsidiary early last year, and Russia, where it hopes to build the Okhta tower in St Petersburg, the proposed tallest tower in Europe.

The company said in August it planned to assemble as many as 10,000 cars and lorries a year in Algeria along with Daimler, MAN Ferrostaal and three other German manufacturers, as well as the Algerian government. In October, Aabar took a Dh1.2bn stake in Banco Santander (Brazil), the Brazilian unit of Spain's biggest bank. It followed the acquisition of the Switzerland-based private banking unit of American International Group that is now known as Falcon Private Bank.

Financial services, along with property, cars, infrastructure and aerospace were the five key investment areas for the company, Mohammed Badawy al Husseiny, the chief executive of Aabar, said last year. In November last year it secured a Dh5.98bn bridge loan to help shore up its finances. @Email:tarnold@thenational.ae