Mumtalakat 2017 Annual Report

INVESTING

FOR A BETTER FUTURE

Eleven years on, we continue with our mandate to grow and diversify the Kingdom of Bahrain’s wealth, investing for a better future for many generations to come. With our active partnership approach, we remain committed to building a diversified portfolio both in terms of sectors and geography.

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Our

Progress

In 2017, we maintained our profitability for the fifth year in a row, which not only reflects the strength of our investment approach, but also how we continued to build on the momentum gained in the previous years.

Key

Acquisitions

In 2017, our team achieved a number of key milestones which put Mumtalakat on a stronger footing for the future.

We established two new companies in Bahrain.

We also successfully concluded three international investments in addition to a number of co-investments with the Russian Direct Investment Fund (RDIF).

Mazad (002)

We established a new company responsible for organising and conducting auctions.

Danat

We formed DANAT, the Bahrain Institute for Pearls & Gemstones. Responsible for issuing verification and authentication reports; conducting research and analysis of pearls and gemstones; and providing ongoing training programmes for young researchers and scientists, the Institute caters to business and consumer needs.

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In partnership with Arcapita, we acquired NAS United Healthcare Services, a leading GCC provider of outsourced health insurance processing services.

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This was our second investment in Germany. We invested in FAI Aviation Group, one of the largest private aviation operators in Europe.

Arc-Logistics

Marking our second partnership with Arcapita in 2017, together we acquired Dubai Industrial Portfolio which consists of a portfolio of light industrial warehouse assets in the UAE.

PhosAgro

Through our co-investment programme with the RDIF, we invested in PhosAgro, a Russian vertically integrated producer of phosphate-based fertilizers.

Transneft logo

Our investment in Transneft was another outcome of our partnership with RDIF. Transneft is a Russian state-owned transportation company operating the Russian oil and oil-product trunk pipelines network.

Polyus

The largest gold producer in Russia. Polyus holds the world’s second largest gold reserves with mines located across Russia. This was part of our co-investment programme with RDIF.

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Global Truck, the second largest full truck load trucking operator in Russia was added to our portfolio this year. The investment was made with RDIF.

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Expanding our presence in Russia, we also invested in the country’s 4th largest airport, the only operating airport in St. Petersburg. This was through our investment in Northern Capital Gateway, the operator of Pulkovo Airport.

Our

Diversification

We hold stakes in 62 companies locally, regionally and internationally in 11 different sectors.

BY SECTOR

BY GEOGRAPHY

Our

Leadership

Our investment model is guided by our Board of Directors, led by HE Shaikh Khalid bin Abdulla Al Khalifa, Deputy Prime Minister and Chairman of the Board, as well as our executive management team, led by our Chief Executive Officer, Mahmood Hashim Alkooheji.

Chairman’s

Message

Our work within Mumtalakat is affected by our surroundings, both domestically and internationally. Economic growth throughout 2017 was stable and positive. In fact, 2017 saw the highest global economic growth rate since 2011. This was mirrored in Bahrain where the annual economic growth rate reached 3.8% during the year, with most of that growth being attributed to the non-oil sector.

It gives me great pride to know that Mumtalakat played a role in that through our focus on investing in and for Bahrain. Our financial position remained strong as we reported net profits for the fifth consecutive year, reflecting the success of our investment strategy and the resilience of our portfolio management.

KHALID BIN ABDULLA AL KHALIFA
DEPUTY PRIME MINISTER &
CHAIRMAN OF THE BOARD OF DIRECTORS

CEO’s

Message

This was a great year for us as we witnessed substantial growth and added a number of new investments to our growing portfolio. Our total consolidated assets reached US $15.4 billion, an increase of 46.4% in comparison to 2016.

In addition to our new international acquisitions and co-investments, we established three new companies in Bahrain, creating more job opportunities in the Kingdom and supporting economic diversification.

This success would not have been possible without the support of our Board members under the chairmanship of HE Shaikh Khalid bin Abdulla Al Khalifa, Deputy Prime Minister, and of course the tireless efforts of my colleagues in Mumtalakat. We enter 2018 with confidence in our investment approach and our ability to continue to generate strong financial returns for our country.

MAHMOOD H. ALKOOHEJI
CHIEF EXECUTIVE OFFICER