KUWAIT CITY, April 19: Kipco Asset Management Company (KAMCO) recorded a net profit of KD 6.13 million, showing an increase of 453 percent, in 2009.
This was announced by KAMCO’s Vice-Chairman, Entisar Al Suwaidi, at the company’s Annual General Meeting (AGM) held Monday.
KAMCO’s earnings per share surged to 24.1 fils from 4.3 fils in 2008, and the return on shareholders’ equity rose from 1.3 percent in 2008 to 7 percent in 2009. The company’s return on assets also showed marked improvement climbing from 0.6 percent in 2008 to 3.7 percent in 2009.
On the flip side, the total shareholders’ equity registered a dip by 6.1 percent to reach close to KD 87.4 million. Total assets retreated by 8.3 percent to stand at KD 165.1 million at the end of 2009, as against KD 180.1 million in 2008. Assets under management also dropped by 16 percent to KD 2.2 billion.
Explaining some of these negative figures, Al Suwaidi said that these financial results should be viewed in the regional and global macro-economic atmosphere. “From that perspective, our performance was excellent and it reflects the many accomplishments KAMCO achieved during the year.

“We have created sustainable profitability through a series of stringent controls and financial discipline that have enabled us to maintain high levels of liquidity.
“Given our strong financial position and sustainable growth we not only secured new lines of credit from local banks in 2009, but also repaid an installment of USD 25 million of a loan.
“The company’s liquidity position was further enhanced in mid 2009, when our bondholders approved a two-year bond maturity extension of our KD 20 million bonds, enabling investment in promising opportunities.
“Another highlight of the year was mandating KAMCO as the sole acquisition advisor for KIPCO Group’s KD 100 million acquisition program, which aimed to purchase assets of private-sector Kuwaiti distressed companies with strong growth potential. We received a very positive response to this program with over 25 enquiries from local companies in a variety of different sectors.
“We also provided restructuring and advisory services for clients with debt totaling KD 35 million. Further to this, KAMCO was instrumental in setting up nine small to medium-sized business with combined capital of KD 3.1 million though the National Investment Fund Portfolio, which is operated in cooperation with the Kuwait Investment Authority.”
Increase
Al Suwaidi also referred to the increase in the company’s managed portfolios as example of the market’s confidence in KAMCO’s expertise.
Following the AGM, KAMCO held the Shafafiya Investor’s Forum, in which KAMCO’s CEO Sadoun Abudlla Al Ali said that the company achieved its net profit by setting aside investment provisions of KD 1.6 million, compared to KD 8 million in 2008.
“This lower level of provisions reflects better management of impaired investments under conservative accounting principles. Investment revenue of KD 9.1 million has been posted for 2009 despite weak markets, compared to KD 2.1 million for 2008.”
Sadoun attributed KAMCO’s performance in 2009 to many factors. He named the 34 percent cut in administrative expenses and the 18 percent reduction in finance costs.
“Other major factors for our performance comprises better risk management practices, improved corporate governance practices, revamping of policies and procedures, prudent asset and liability management, which reflected in reduced leverage and extension of debt maturities.
Talking about the company’s opportunities in 2010, Sadoun noted that KAMCO will maintain its focus on strengthening its balance sheet and profitability, while keeping healthy cash balance, prudently managing the existing debt and extending its maturities.
“The company has a healthy product pipeline, including mutual funds and private offerings. Actively pursuing our strategic objectives, KAMCO will be looking for additional talented staff to assist in executing its strategy and business plans for 2010.”