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Mubadala H1 earnings hit by volatile commodities

Abu Dhabi owned Mubadala Development Company earnings cut to half to Dh625.50 million in the first six months of the year over Dh1.3 billion in the period a year ago, as 'volatile' commodity prices impacted some of its businesses.
The investment company's revenues slightly slipped to Dh15.9 billion from Dh16 billion in the period as higher semiconductor, information and communications technology, healthcare, real estate and industry-related revenues were offset by lower aerospace and energy-related revenues, the company said on Thursday.
Profit was Dh625.5 million in the half year period over Dh1.3 billion in the corresponding period while total comprehensive income plunged to Dh477.7 million from Dh1.3 billion, as an increase in income from financial investments was offset in part by lower operating income.
Commenting on the financials Mubadala Group CFO, Carlos Obeid, said: "Despite challenging market conditions such as volatile commodity prices impacting certain businesses in our portfolio, the diversity of our asset base and prudent management enabled us to record positive results."
He said as the economic situation remains unclear, "we continue to carefully manage our operations and balance sheet."
The investment company's operating income plunged to Dh761.8 million in January-June 2015 from Dh2.4 billion in 2014 due to the higher cost of sales of goods and services during the period and lower income from disposals. "Global economic conditions reinforce more than ever the importance of Mubadala's long-term investment strategy and diversified portfolio", said Khaldoon Khalifa Al Mubarak, group chief executive officer and managing director of Mubadala.
The investment company reported total assets valuing Dh241.7 billion as at 30 June 2015 over Dh243.6 billion as at the end of 2014.
Mubadala has a multi-billion dollar portfolio of local, regional and international investments in diverse spheres such as aerospace, semiconductors, metals and mining, oil and gas, renewables, information and communications technology, healthcare, real estate & infrastructure, utilities, and defense services.
The opening of Cleveland Clinic Abu Dhabi, the region's most sophisticated medical facility, and the continued expansion of portfolio companies such as Yahsat and Strata, continue to help drive the economic diversification of the UAE, the chief executive officer and managing director said.
"We continue to focus on developing leading, globally-integrated industry sectors in the UAE that support sustainable growth," the managing director said.
In the first six months of 2015, Mubadala's aerospace unit, Strata Manufacturing won a contract to manufacture Airbus A350-1000 Flap Support Fairings until 2023, and Boeing delivered the first 787 Dreamliner with advanced composite parts made by Strata.
The investment company's defence manufacturing arm, Emirates Defence Industries Company announced its second phase of integration by adding five new subsidiaries to its portfolio.
The company's healthcare project Cleveland Clinic Abu Dhabi, located on Al Maryah Island, became fully operational with over 30 medical services and subspecialties now available to the public.
Since becoming fully operational in May, over 35,000 appointments have been completed in Abu Dhabi, spanning 1,500 medical procedures. Al Maryah Island, a Mubadala development, is Abu Dhabi's international financial center with Abu Dhabi Global Market establishing its headquarters on the island. Al Maryah Central, a 3.1 million square ft. mixed-use mall, commenced construction, further cementing the island's position as Abu Dhabi's business and lifestyle destination.
Mubadala and Trafigura signed an agreement to create a 50:50 joint venture company to invest in the base metals mining sector, beginning with copper extraction operations in Spain.
GLOBALFOUNDRIES closed its proposed acquisition of IBM's microelectronics business after receiving all of the required regulatory approvals.
Also, the International Renewable Energy Agency's global headquarters in Masdar City was inaugurated, which alongside GE, Siemens and Lockheed Martin are contributing to Masdar City's growing ecosystem focused on sustainability, research, business and education.
Yahsat's YahClick service expanded into Pakistan, providing satellite internet to rural and remote communities across 13 countries where traditional networks are often unreliable.
- haseeb@khaleejtimes.com

• Abu Dhabi