Investment Dar announces financial results for 2008

14 April 2010

Total assets of KD 1.2 billion (2007: KD 1.27 billion)
Loss of KD 80.3 million (2007: net profit KD 132 million)
Shareholders’ equity at KD 168.5 million (2007: KD 387 million)
Loss per share 87.5 Fils (2007: earnings per share 140.58 Fils)

The Investment Dar K.S.C.C. (C) has announced its financial results for the year ended December 31, 2008, after obtaining approval from the Central Bank of Kuwait and endorsement by the company’s auditors. The Investment Dar reported an annual loss of KD 80.3 million for the financial year 2008, its first loss since the Company’s inception in 1994. This is equal to a loss of 87.45 fils per share. The financial results of 2008 were impacted by unrealized losses and a decline in asset values. Investment Dar’s total assets in 2008 were at KD 1.2 billion, against total liabilities of KD 1 billion in the same year.

Following the rapid contraction of global credit markets and the deterioration in market conditions from mid-2008, Investment Dar financial results were primarily impacted by losses arising from its portfolio of company assets as well as impairments made for reduced asset valuations. The final quarter of 2008 saw a reduction in value of KD 520 million in the assets of some Investment Dar’s affiliate companies, with Investment Dar’s share of this asset value reduction at KD 90 million in the same period. Total provisions of KD 89.5 million were taken at the full year to provide against the reduction in value of Investment Dar’s investments.

Since early 2009, Investment Dar has been in a process of restructuring, which it has undertaken in partnership with its banks and investors. Through its advisors and through the leadership of the Coordinating Committee, established to represent the views of Investment Dar’s banks and investors, the Company has agreed the commercial terms of a consensual restructuring plan with more than 80% of banks and investors. The restructuring plan will see all outstanding obligations repaid in full.
Adnan Al Musallam, Chairman of the Board of Directors and Managing Director of the Investment Dar, commented:

“2008 was an extremely challenging year following the rapid deterioration in market and credit conditions. These factors affected Investment Dar’s financial performance which resulted in our first ever loss. However, we remained well founded, with assets of KD 1.2 billion and shareholders’ equity of KD 168.5 million. As is well-known, several of the sectors we have invested in are cyclical in nature and as the cycle turns so we anticipate asset values - including some of those held by The Investment Dar - will improve.

“Since the beginning of last year, we have been working hard to restructure the business, to ensure that we remain in a position to generate long term value for our investors and shareholders. This has seen us working with our banks and investors, the Coordinating Committee and our advisors to agree and progress a consensual restructuring plan that will see all outstanding obligations paid in full. With the plan agreed, we are now moving towards formal documentation of the plan and look forward to its implementation.”