The International Investor reports KD 2.5 million
The Annual General Meeting of The International Investor (TII) was held on Sunday 12 January 2003. The complete agenda was approved by the General Assembly, including election of a new Board of Directors, and release of the financial results for 2001.
The new Board of TII comprises nine members: Messrs Adnan Al Bahar, Najeeb Al Mulla, Sayer Al Sayer, the Public Institution For Social Security represented by Faisal Al Mussalam, the Burhan Company represented by Anwar Al Besher, Salah Al Wazan, Abdulla Al Beijan, Mussa Al Mussa and Faisal Al Khatrash.
The new Board held its first meeting on Monday 13 January 2003 at which Mr Adnan Al Bahar was elected as Chairman and Managing Director, and Mr. Najeeb Al Mulla as Vice Chairman.
In reviewing the 2001 financials before the General Assembly, Adnan Al Bahar noted: "Even though TII incurred losses, shareholders' equity rose from KD 24.1 million to KD 67.6 million, while the book value of a share went up from 151 fils to 175 fils.”
TII reported a total income in 2001 of KD 7.3 million (US$ 23.8 million) compared to KD 9.7 million (US$ 31.8 million) in 2000. Profit from operations was KD 2.5 million (US$ 8.2 million) in 2001 compared with KD 4.4 million (US$ 14.4 million) the previous year. Total assets rose from KD 24.9 million (US$ 81.6 million) in 2000 to KD 74.0 million (US$ 241.6 million) in 2001, reflecting the amount paid to Dallah Albaraka Group. The share offering in 2001 led to an increase in capital from KD 17.7 million (US$ 57.9 million) to KD 38.1 million (US$ 124.1 million), while total shareholders' equity rose from KD 24.1 million (US$ 78.9 million) to KD 67.5 million (US$ 220.1 million).
Impairment losses incurred during the year totalled KD 7.7 million (US$ 25.1 million), resulting in a net loss of KD 5.2 million (US$ 16.9 million) for 2001 compared with net profit of KD 3.9 million (US$ 12.8 million) in 2000. Therefore, the Directors are not recommending a dividend payment for 2001.
Commenting on the results, TII chairman and managing director Adnan Al-Bahar, said:
"Our financial performance for 2001 reflects an extraordinary year for TII in which we incurred major expenses as a result of establishing the new entity, Albaraka & The International Investor. These include the cost of major restructuring of TII to ensure that necessary human and technical resources were in place to support the new group's activities. TII's results also reflect, to a lesser degree, the impact of the sharp slowdown of the global economy and continued volatility of international capital markets in 2001, and the consequences of the tragic events of September 11.
“The need to absorb the acquisition-related expenses pending the outcome of the arbitration process, together with the costs of refocusing our business activities, will continue to affect TII's financial performance in 2002. However, TII remains a strong and viable financial institution and, as we have demonstrated since our inception in 1992, we have the capability and the resources to weather such temporary setbacks. Once the issues of costs and compensation have been resolved, and as we begin to benefit from the diversification of revenue sources generated by our new strategic thrust, we are confident that TII will return to profitability in 2003.”
On TII's future strategy, Adnan Al-Bahar said:
"In today's increasingly competitive marketplace, standing still is not an option. The willingness and ability of organisations to accept change, embrace innovation, and adjust their mission, strategy and operations in line with changing conditions, will mark the difference between corporate success and failure. "Therefore, whatever the outcome of the arbitration process, TII remains focused on forging a new strategic thrust. This includes the development of a regional Islamic non-bank financial services business to complement our investment banking activities. On a number of different fronts, we are currently pursuing opportunities with several interested parties across the region. They share our commitment to developing a strong and competitive regional Islamic financial services industry, and also our conviction that consolidation remains the best way forward for the industry.
The release of TII's 2001 financials was delayed as a result of the request received in April 2002 from Dallah Albaraka Group to unwind the share transfer agreement that led to the establishment of Albaraka & The International Investor during 2001. TII had originally planned to produce consolidated financial statements for the new group as a whole. However, following their decision to refer all outstanding issues with Dallah Albaraka Group to arbitration, the Board of Directors has reported the 2001 financial results for TII without the consolidated financial statements of the Albaraka banks.
The future of Albaraka & The International Investor will be resolved by an arbitration panel in London, UK, to be convened under the auspices of the International Chamber of Commerce.