Kuwait Projects Company (KIPCO), the US$ 15 billion regional business enterprise, has had its bond rating upgraded from BBB to BBB+ by Capital Intelligence, the international emerging markets rating agency. The bond’s outlook is rated stable.
KIPCO, Kuwait’s largest private sector investment company, has major activities in financial services and media & telecommunications, as well as real estate, industry, and management & advisory, in a portfolio of more than 55 companies throughout the Middle East and North Africa.
In its rating report, Capital Intelligence said KIPCO was underpinned by mature Group companies with strong and stable earnings records; rapidly growing newer Group companies; high quality management at all levels, greatly improved funding structure; and stronger profits in 2003 and 2004 with a very strong outlook for 2005.
Commenting on the upgrade, KIPCO managing director and chief executive officer Faisal Al Ayyar said: “We are delighted to have our achievements recognised by Capital Intelligence. This reflects our consistently strong results across the spectrum of our businesses, as well as our solid financial standing and excellent future prospects.”
KIPCO’s profits in 2004 – its 13th year of unbroken profitability - jumped 39 per cent to a record high of KD 25.24 million (US$ 85.64 million), from KD 18.2 million (US$ 61.8 million) in 2003, driven by strong performances in its company portfolio.
2005 half year net profit surged 31 per cent to KD 17.1 million (US$ 58.6 million), an increase of KD 4.0 million (US$ 13.7 million) compared to KD 13.1 million (US$ 44.8 million) in the same period last year.
Full year 2005 net profit is forecast to rise 33 per cent to KD 33.5 million (US$ 114.7 million), resulting in a higher return on equity of 18 per cent against 14.8 per cent in 2004, and return on assets of 8.6 per cent compared to 7.1 per cent in 2004.
KIPCO’s core operating companies are its investment banking subsidiary United Gulf Bank (UGB); Gulf Insurance Company (GIC), a regional leader in commercial and personal insurance; Burgan Bank, Kuwait’s leading technology-driven commercial bank; Wataniya Telecom, the dynamic and fast-growing regional mobile telephone services provider; and Showtime, the popular digital pay-TV service spanning the Middle East and North Africa.
KIPCO, with ownerships and interests that extend to the U.S. and Europe, employs more than 12,000 people internationally, and its shares are among the most actively traded on the Kuwait Stock Exchange.
