Building further on its strong performance amidst a challenging global economic environment, The Arab Petroleum Investments Corporation (APICORP) today reported its highest ever annual net profit, total assets and total shareholders’ equity. The government of UAE has a 17% stake in APICORP.
The 2010 net profit of the multilateral bank, owned by the ten member states of the Organization of Arab Petroleum Exporting Countries (OAPEC), surged to US$95 million, a 62 % increase over 2009 profit of US$58.5 million. Total assets for the period rose to US$4.3 billion, a 5% increase over their 2009 levels of US$4.1 billion, while total shareholders’ equity also rose by 13% to reach $1.1 billion.
APICORP’s Board of Directors approved the Audited Financial Statements for the year ended 31 December 2010.
Ahmad Bin Hamad Al-Nuaimi, Chief Executive and General Manager of APICORP said: “The historic results for 2010 reflect our continued commitment to maintaining strong banking fundamentals by strategically and prudently managing our equity and debt portfolios. Since its founding, APICORP has consistently played a counter-cyclical role by being exceptionally resilient to unfavorable economic conditions. Despite the tight credit conditions prevalent today, we have maintained an exceptional level of stability and a steady growth momentum.”
“The 2010 results provide an impetus to our five year plan of expanding our equity portfolio with midstream sector projects. Currently, we are investigating opportunities in shipping, petroleum tank farms, refining and related infrastructure investments. We are confident that APICORP will meet its target of doubling its direct investment portfolio by the end of its 2010-2014 five year plan.”
Al Nuaimi pointed out that APICORP has also continued to maintain a strong presence in the project finance market with a robust debt portfolio. Despite the slowdown in financial markets, APICORP was able to identify unique project, trade and corporate finance opportunities in the oil and gas industry throughout the Middle East and the North African region in 2010, where it negotiated transactions valued at US$3.3 billion with APICORP’s total commitment aggregating US$320 million. Encouraged by its solid financials and Moody’s Investors Service’s first-time issuer rating of A1 for long-term debt and Prime-1 for short-term debt, APICORP is now seeking to expand as well as develop new finance products.
Mr. Al-Nuaimi cited that the MENA oil and gas project finance market is on its way to recovery. According to APICORP’s research, 70% of the energy investment potential continues to be spread out across Saudi Arabia, the UAE, Qatar, Algeria and Egypt. This closely reflects the distribution pattern of crude oil and natural gas reserves in the region. Of the US$530 billion of actual capital requirements in the Arab world, the oil supply chain accounts for 42%, the gas supply chain accounts for 36%, while the capital requirements in the oil, gas and nuclear‐fuelled power generation sector represent the remaining 22%.
“APICORP is keen to contribute to the region’s economic recovery by investing in, financing, as well as advising and structuring vital energy projects. Our extremely successful debut of the Saudi Arabian Riyal (SAR) 2 billion (US$533 million) bond issuance in October last year was aimed at expanding our ability to support energy projects in the region. We also recently entered into a strategic partnership with the International Finance Corporation’s (IFC) Master Cooperation Agreement (MCA) to co-finance oil and gas projects internationally that feature Arab investments. APICORP is the first Arab multilateral development bank to sign such an agreement,” said Al Nuaimi.
As part of supporting MENA energy industry growth, APICORP also initiated a divestment strategy in 2010 with the aim of redeploying the funds generated towards widening its investments into oil refining, storage, transport and shipping. Besides, APICORP continues to provide financial advisory services to the region’s oil and gas industry, drawing from its vast knowledge of project finance, gained from being an active investor in the Arab energy sector.
Meanwhile, APICORP’s sound financial strength was also evident in the first quarter of 2011, where it registered a net income of US$39.3 million, while both total assets and total shareholders’ equity reached US$4.42 billion and US$1.16 billion respectively at the end of the first quarter of 2011.
Since its founding in 1975 APICORP has played a vital role in fostering the development of the Arab energy industry. Over the last 35 years, APICORP has invested as an equity owner in a total of 22 oil and gas joint venture projects worth in excess of $13 billion. At the same time, APICORP has participated in direct and syndicated energy finance transactions worth in excess of US$126 billion. APICORP‘s aggregate commitments in these transactions, both in equity and debt, are valued in excess of US$11 billion.
