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RNS Number : 8805Z
European Islamic Investment BankPLC
23 September 2015
 

European Islamic Investment Bank plc

 

("EIIB" or the "Company")

 

Interim Financial Statements

 

For the six months ended 30 June 2015

 

Highlights

 

·      Financial performance for the six months to 30 June 2015 was encouraging in challenging market conditions

·      Operating income of £4.9m (first half 2014: £6m)

·      Operating profit of £0.6m, compared to £0.9m for the first half 2014 (2014: full year profit before tax from continuing operations £1.5m)

·      Income attributable to Equity holders of £1.0m, compared to £0.2m in first half 2014

·      Assets under management (AUM) at 30 June 2015 including capital seeded by the Group stood at US$1,100m (31 December 2014: US$1,123m)

·      Earnings per share of 3.33p, up from 1.02p in first half 2014

·      Strong capital adequacy, regulatory and liquidity ratios maintained

 

For further information please contact:

EIIB plc                                                            Tel: +44 (0)20 7847 9900

Zak Caar Hydari, Chief Executive

Westhouse Securities                                     Tel: +44 (0)20 7601 6100

Antonio Bossi / David Coaten

 

 

Chief Executive's Statement

 

Financial results

 

During the first half of 2015 EIIB delivered encouraging financial performance in challenging market conditions.

 

Total operating income for the six months to 30 June 2015 was £4.9m (six months to 30 June 2014: £6m). Total expenses for the six months were £4.3m (first half 2014: £5.1m). The resulting Operating profit for the six months was £0.6m (first half 2014: £0.9m). However, the Income attributable to Equity holders of £1.0m was higher compared to £0.2m in the same period 2014.

 

The Group also maintained its strong capital adequacy, regulatory and liquidity ratios.

 

Commentary

In the first half of the year we maintained performance in challenging market conditions.

There has been significant volatility in the Middle East and North Africa (MENA) region from a geopolitical and economic perspective. Ever since oil prices started their downtrend trajectory equity markets have become more volatile. We expect volatility to remain high over the next 6-12 months with oil prices remaining low and energy subsidies being revised in Oman, Kuwait and Saudi Arabia. GCC governments are also likely to curtail non-essential spending and increasingly tap debt markets to fund expenditure. We also believe efforts to diversify economies away from oil will intensify and investments in infrastructure, transportation, healthcare and education will be prioritised.

 

Oil is under pressure from the demand side (rapid uptake of hybrid and alternative energy sources) as well as the supply side (US shale oil and Iran). US shale companies are the new swing producers in the market (almost 3 million barrels of supply) and have the technology to ramp up or cut down production within 6 to 12 months compared to 5 years on average for conventional producers.

 

The Iran nuclear deal is a significant development in the region. Whilst the heightened geopolitical tensions have added pressure to GCC budgets, we expect them to ease and remain hopeful that the Iranian deal will aid in solving conflicts in Syria, Yemen and Iraq. Our current strategy is focused on increasing allocation to the UAE where growth momentum remains strong. The Iran deal will have a positive impact on the UAE. Iran is the UAE's most important non-oil trade partner and the UAE accounted for approximately 30% of total Iran imports in 2014. Most of this trade goes through Dubai, which will benefit from a recovery in Iranian trade and investment as sanctions are lifted. On a longer term basis, the UAE's proximity to Iran, its safe haven status and its importance as an offshore trade and finance centre should drive UAE economic growth as it acts as an important hub for FDI into Iran.

Last year the upgrading of the UAE and Qatar to emerging markets status was a significant development. In the first half of this year Saudi Arabia followed through on earlier announcements to open its market to international investors. Whilst we are currently reducing exposure to Saudi Arabia, where earnings fell by 12% during the first half of 2015, the liberalisation of the $550bn Saudi market is transformational and increased ability to invest in Saudi Arabia will boost long-term prospects for regional markets.

Investment Management

 

Our investment performance was strong across all Funds and client portfolios. Our flagship funds, the Arabian Markets Growth Equity Fund and the Rasmala GCC Islamic Equity Income Fund, produced returns of 7.34% and 8.28% respectively, in the six months to 30 June 2015, and the Rasmala GCC Fixed Income Fund and the Rasmala Global Sukuk Fund, produced returns of 2.57% and 1.96%, respectively, over the same period.

 

Our Assets under management (AUM) including capital seeded by the Group stood at US$1,100m (period to 31 December 2014: US$1,123m). Gross inflows during the period exceeded $130m but were offset by redemptions and market movements. Strong demand for our Alternative strategies of Trade Finance and Leasing was particularly encouraging.

 

Investment Banking

 

In the first half of the year, we acted as lead arranger on a capital markets financing for National Bank of Fujairah. The total size was AED500m (US$140m) and was fully subscribed.  Our Investment Banking team has also developed a real estate capability and expects to complete one client led real estate backed transaction in the second half of the year.

 

Principal Investments

 

We continue to manage our balance sheet on a conservative basis and deploy capital to drive our product expansion strategy. We are also increasing the level of management involvement in our remaining legacy investments to ensure we achieve a timely and orderly exit.

 

Tender Offer

 

EIIB successfully completed a GBP20m Tender Offer on 7 May 2015.

 

Outlook

 

We are pleased to report a profit for the first half of the year, despite a challenging geopolitical and economic environment. We expect the second half of the year to be even more volatile and our strategy is to make incremental progress towards our goals, whilst maintaining stability during this period of heightened volatility.

 

 

Condensed consolidated statement of income for the six months ended 30 June 2015 (unaudited)

 



6 months to 30-Jun-15


6 months to 30-Jun-14


Year to

31-Dec-14



£


£


£

Income







Income from financing and investing activities


673,291


1,037,007


1,820,063

Returns to financial institutions and customers


(68,095)


(102,145)


(180,966)

Net margin


605,196


934,862


1,639,097





Net fees and commission income


1,521,907


2,390,055


5,921,086

Net gain on funds, sukuk and quoted equity


1,046,650


1,676,106


1,266,191

Gain on private equity investments designated at fair value

1,263,917


805,388


159,241

(Loss)/Gain on investment property designated at fair value


(51,868)


138,406


357,656

Other operating income


468,285


99,892


1,423,207

Total operating income


4,854,087


6,044,709


10,766,478






Expenses







Staff costs


(2,799,730)


(2,680,882)


(5,378,045)

Depreciation and amortization


(32,658)


(58,999)


(94,244)

Other operating expenses


(1,438,392)


(2,173,314)


(3,790,206)

Third party interest in consolidated funds


-


(218,018)


-

Total expenses


(4,270,780)


(5,131,213)


(9,262,495)





Operating profit before tax


583,307


913,496


1,503,983

Tax charge


(21,784)


(249,817)


(786,881)








Profit/(loss) from continued operations


561,523


663,679


717,102

Loss from discontinued operations


-


(218,736)


(116,976)

Profit for the period


561,523


444,943


600,126





Income/(loss) attributable to:







   Equity holders of the Bank


996,646


216,081


592,037

   Non-controlling interest


(435,123)


228,862


8,089



561,523


444,943


600,126








Earnings per share







-   Basic


3.33p


1.02p


3.16p

-   Diluted


3.33p


1.02p


3.16p

 

 

 

Please note 3.33p as at 30 June 2015 is post Tender Offer

Condensed consolidated statement of other comprehensive income for the six months ended 30 June 2015 (unaudited)

 



6 months to 30-Jun-15


6 months to 30-Jun-14


Year to 31-Dec-14



£


£


£

Profit for the period


561,523


444,943


600,126








Other comprehensive income







Net change in fair value of available-for-sale securities


(288,512)


47,944


179,031

Exchange gain/(loss) on net investment in foreign operations

(198,280)


39,202


(526,012)








Total comprehensive income for the period


74,731


532,089


253,145








Total comprehensive income/(loss) attributable to:







Equity holders of the Bank


627,122


224,507


245,056

Non-controlling interest 


(552,391)


307,582


8,089



74,731


532,089


253,145

 



 

Condensed consolidated statement of financial position at 30 June 2015 (unaudited)

 



30-Jun-15

30-Jun-14

31-Dec-14



£

£

£

Assets





Cash and balances with banks


9,286,167

7,293,822

6,561,726

Other assets


6,055,708

3,900,887

12,216,422

Available for sale investments


19,222,815

31,988,516

22,471,325

Assets held for sale


90,429

537,751

91,491

Financing arrangements


5,400,000

7,965,605

7,807,396

Financial assets designated at fair value


28,899,926

28,737,942

25,847,173

Fair value of foreign exchange agreements


1,649,439

1,036,946

24,394

Due from financial institutions


15,727,698

41,532,663

34,056,436

Private equity assets designated at fair value


17,729,211

16,026,636

16,693,699

Property, plant and equipment


189,242

153,892

174,243

Investment property


1,187,385

1,610,614

1,673,630

Intangible assets


121

7,767

2,528

Goodwill


10,659,524

10,021,251

10,784,754

Total assets


116,097,665

150,814,292

138,405,217






Liabilities





Due to financial institutions


6,634,516

10,584,567

6,630,419

Fair value of foreign exchange agreements


40456

1

954,329

Liabilities held for sale


122,110

564,140

123,545

Other liabilities


4,253,253

10,771,845

5,601,917

Third party interest in consolidated funds


-

1,385,031

-

Total liabilities


11,050,335

23,305,584

13,310,210



Shareholders' equity





Share capital


15,720,892

19,720,892

19,720,892

Share premium account


45,815,459

101,815,459

61,815,459

Capital redemption reserve


599,040

599,040

599,040

Treasury shares


(2,117,015)

(2,117,015)

(2,117,015)

Special reserve


60,000,000

20,000,000

60,000,000

Equity reserve


(911,624)

-

(911,624)

Fair value reserve on available-for-sale securities


109,630

267,055

398,142

Foreign exchange reserve


(922,834)

(355,328)

(841,822)

Accumulated losses


(15,521,074)

(16,771,268)

(16,395,312)

Total equity attributable to the Bank's equity holders


102,772,474

123,158,835

122,267,760






Non-controlling interest 


2,274,857

4,349,874

2,827,247






Total Equity


105,047,330

127,508,708

125,095,007

Total equity and liabilities


116,097,665

150,814,292

138,405,217


Condensed consolidated cash flow statement for the six months ended 30 June 2015 (unaudited)

 

 


6 months to 30 Jun 2015

6 months to 30 Jun 2014

Year to
31 Dec 2014


£

£

£

Cash flows from operating activities




Operating profit for the period

583,307

913,496

1,503,983

Operating loss on discontinued operations

-

(218,736)

(116,976)

Adjusted for:




Loss/(gain) on investment in funds and sukuk designated at fair value 

(846,244)

(989,573)

184,920

Gain on private equity investments designated at fair value

(1,263,917)

(805,388)

(159,241)

Reversal of provision on related party

-

-

(962,958)

Gain on sale of investments

-

-

(253,774)

Depreciation and amortisation

32,658

58,999

94,244

Fair value loss/(gain) on Investment property

51,868

(138,406)

(357,656)

Net (increase)/decrease in operating assets:




Due from financial institutions

18,328,738

(1,288,364)

6,187,864

Financial assets designated at fair value

(2,206,509)

(4,019,751)

(4,088,576)

Financing arrangements

2,407,396

3,484,462

3,642,672

Available-for-sale securities-sukuk

3,248,510

9,683,606

3,986,449

Private Equity financial assets designated at fair value

228,405

599,373

(669,793)

Investments in funds designated at fair value

-

(11,628,548)

-

Investment property

19,434

313,992

426,182

Fair value of foreign exchange agreements

(1,625,045)

-

1,353,403

Assets held for sale

1,062

-

818,617

Lease assets held for sale

-

-

4,368,976

Other assets

5,676,744

538,161

(9,161,369)

Net increase/(decrease) in operating liabilities:




Due to financial institutions

4,098

(2,455,756)

(6,370,387)

Fair value of foreign exchange agreements

(913,873)

-

951,510

Liabilities held for sale

(1,435)

-

-725,321

Other liabilities

(1,370,449)

4,517,226

(1,459,620)

Third party interest in consolidated funds

-

-

(6,499,725)

Taxation:




Corporation tax (paid)/received

-

-

-

Net cash inflow/(outflow) from operating activities

22,354,748

(1,435,207)

(7,306,576)





Cash flow from investing activities




Sale of investment in funds

-

-

5,576,730

Disposal of Op lease assets

-

4,368,976

-

Payment on acquisition of a subsidiary (cash consideration)

-

-

(1,773,769)

Disposal of a subsidiary net of cash disposed of

-

-

630,303

Disposal of investment property

414,944

-

-

Purchase of plant and equipment

(45,251)

(13,660)

(53,368)





Net cash inflow from investing activities

369,693

4,355,316

4,379,896





Cash flows from financing activities




Net Subscriptions to consolidated funds

-

(5,114,693)

-

Payment to minority shareholders

(20,000,000)

-

-

Net cash outflow from financing activities

(20,000,000)

(5,114,693)

-





Cash and cash equivalents at the beginning of period

6,561,726

9,488,406

9,488,406

Cash and cash equivalents at the end of the period

9,286,167

7,293,822

6,561,726



 

Notes to the condensed consolidated interim financial statements (unaudited)

At 30 June 2015

 

 

1.   Principal activities and authorisation of the financial statements

 

European Islamic Investment Bank plc ('EIIB' or 'Company') is a London headquartered specialist asset management and financing group incorporated in the United Kingdom on 11 January 2005. The Company is focused on the Gulf Cooperation Council countries and offers investment management and structured finance solutions.

 

The interim condensed consolidated financial statements of the Company and its subsidiaries (the 'Group') for the six months ended 30 June 2015 were authorised by the Board of Directors for issue on 21 September 2015.

 

The condensed consolidated financial statements of the Group as at and for the period ended 30 June 2015 are available at www.eiib.co.uk

 

 

2.   Accounting policies

 

The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2014.

 

 

3.   Share capital and share premium

 

EIIB consolidated its ordinary shares following a tender offer and as a result, the number of ordinary shares with voting rights in issue in the company has changed to 30,446,654 from 39,121,206.

 

 

4.   Subsequent events

 

There were no significant events occurring subsequent to the interim reporting period.

 

 

 

 

 


This information is provided by RNS
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