Acquisitions drive six-fold increase in IHC’s 2020 profit

International Holding Company posted a six-fold increase in its 2020 net income as an expanding asset base gave profitability a boost.

Net profit for the period ending December 31 stood at Dh3 billion, fuelled by organic growth and acquisitions, IHC said yesterday in a filing to the Abu Dhabi Securities Exchange. Revenue for the reporting period grew from Dh1.26bn in 2019 to Dh7bn.

“IHC has transformed into a major investment company that benefits from a robust balance sheet and a highly diversified portfolio that spans six verticals,” said chief executive Syed Shueb.

The company, in which Abu Dhabi’s Pal Group of Companies owns a majority stake, has steadily expanded its portfolio by acquiring businesses in sectors such as emerging technology, property and health care.

It acquired a stake in California aerospace company SpaceX through a private equity fund and invested in British DNA sequencing company Oxford Nanopore Technologies and New York digital marketing company Yieldmo.

IHC’s healthcare arm, which owns Quantlase Imaging La – the company behind the rapid Covid-19 screening system on the Abu Dhabi-Dubai border – last year secured a 52 per cent stake in R-Med Medical Supplies, which makes Covid disinfection gates.

It also bought property developer Royal Development, project management company Royal Architect and took a 60 per cent stake in Apex Alwataniah Catering Service.

IHC’s total assets grew to Dh14bn at the end of last year, up from Dh4bn a year earlier. Its cash and cash equivalents stood at Dh3.7bn at the end of the reporting period.

Although the company’s growth was partially driven by strategic acquisitions and investment, its subsidiaries delivered strong revenue growth of 165 per cent, said Mr Shueb.

The subsidiaries displayed “significant resilience when faced with considerable global macroeconomic challenges”, he said.

Mr Shueb said IHC remains “well positioned to invest further in high-potential opportunities”.

The Abu Dhabi-based company, which listed three of its subsidiaries on the secondary market of the ADX, said it will “enhance shareholder value through operational synergies and cost efficiencies”.

It plans to continue to evaluate investment opportunities through direct ownership and partnerships in the UAE and abroad.

IHC said it has a clear strategy to enhance its portfolio through acquisitions, strategic investment, restructuring, consolidation, diversification and divestment.