GFH’s second quarter net profit soars on offloading

GFH Financial Group, the Bahrain-based Sharia-compliant investment firm, said yesterday its second quarter net profit rose more than 400 per cent, thanks to income from investment exits.

Net profit attributable to equity holders in the three months ending in June reached US$30.2 million, compared with $5.5m for the same period last year. Consolidated net profit for the second quarter rose to $32m from $7.9m in the year-earlier period.

“During the quarter we have been able to achieve excellent exits from our real estate and education portfolio which made substantial contribution to our revenue stream,” said Hisham Alrayes, the chief executive of GFH.

“We have also been able to achieve some recoveries from our debt portfolio, which has contributed to our overall income as well.”

Fitch in July upgraded GFH to B from B-, five steps below investment grade, with a positive outlook, owing to the company’s settlement of legal cases last year.

GFH settled a number of cases last year filed against former executives, including two ex-chairmen. GFH, which had liabilities of over $1 billion in 2008, has gone through numerous debt restructurings and is currently in an acquisition and expansion phase.

“Regarding our plan for strategic acquisitions and following shareholders’ approval earlier this year, we have been able to achieve major acquisitions for the benefit of our infrastructure portfolio and increased the capital of the bank with a premium to our shareholders,” said Mr Alrayes.

“With the current pace of performance, we expect to end the year with a record achievement and maintain distribution of dividends to the market.”