Gulf Air takes toll on Bahrain’s Mumtalakat fund

DUBAI, July 8, (RTRS): Bahrain’s $9 billion sovereign wealth fund Mumtalakat said its full-year consolidated net losses widened due to higher provisions and reduced income from associate companies.
Mumtalakat, which owns sta+kes in firms such as Gulf Air and Aluminium Bahrain, made a net loss of 270.6 million dinars ($717.68 million) in 2011, it said in a statement on its website.
That compares with a loss of 234.3 million dinars in 2010.
Losses from struggling national carrier Gulf Air in particular weighed on the fund’s income.
“Several restructuring initiatives were undertaken at Gulf Air to reduce operating losses, achieve cost efficiencies and improve the quality of product offering and customer service,” the statement said.

Consolidated revenue and gross profit in 2011 increased 8.4 percent and 5.5 percent respectively, primarily due to the strong performance of Aluminium Bahrain, it said.
The fund, which appointed Mahmood Hashem al-Kooheji as chief executive in March, booked impairment losses of 316.5 million dinars in 2011 compared with 191.2 million the previous year.
Mumtalakat said its consolidated operating loss fell almost 88 percent to 5.9 million dinars in 2011, from 48.9 million.
Mumtalakat is one of the smaller sovereign wealth funds in the world’s top oil-exporting region.
Its chief executive said this month the fund may offload a portion of its stakes in firms and reinvest the proceeds in the country’s economy.

Meanwhile, Aluminium Bahrain’s output edged up 1.7 percent in the first half of 2012 but sales were almost flat as weak economic growth in Europe dampened demand in the first quarter, Alba said on Sunday.
Production at one of the world’s largest aluminium smelters was 443,533 tonnes in the first half of the year, against 436,256 tonnes in the same period of 2011, a company statement said.
Sales edged up to 446,044 tonnes versus 445,370 tonnes in the first half of 2011.
“Our sales and production figures reflect the company’s operational focus on delivering progress while facing challenges,” Chief Executive Laurent Schmitt said, pointing to a fall in aluminium prices and weak economic growth in Europe.
Bahrain’s state-run energy supplier raised Alba’s gas supply costs by $0.75 per million British thermal units (mmbtu) to $2.25/mmbtu on January 1, but Alba still enjoys cheaper fuel than its competitors outside the Gulf.
The company plans to increase capacity from 881,000 tonnes to 1.28 million tonnes a year in 2015 with a new production line.

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