DUBAI: Air Arabia suffered a 609.5 million dirham ($166 million) loss in 2018 as it took impairments on its exposure to collapsed private equity firm Abraaj, knocking its shares on Thursday as analysts said its dividend could be hit.
The Dubai-based carrier, whose stock fell by more than 7 percent on the results, had posted a net profit of 630.6 million dirhams in the same period a year ago.
Air Arabia said it faced impairment charges of 1.13 billon dirhams, mainly due to exposure to Abraaj-related investments.
“While Air Arabia’s liquidity status and profitable operations remain intact, this step aims to serve the best interests of the company and its investors,” it said.
Dubai-based Abraaj was the largest buyout fund in the Middle East and North Africa until it collapsed last year in the aftermath of a row with investors, including the Gates Foundation, over a $1 billion health care fund.
“While we expected this to happen, this will affect Air Arabia’s ability to pay dividends,” said Nishit Lakhotia, head of research at Bahrain-based SICO.
“Further, this has affected its balance sheet and possibly will imply a higher rate for airline purchase or leasing.”
Air Arabia added 26 new routes to its global network in 2018 from its operating hubs in the United Arab Emirates, Morocco and Egypt, it said in a statement on its website.
The carrier took delivery of three new aircraft and ended the year with a fleet of 53 Airbus A320 aircraft operating to over 155 routes across the Middle East, Africa, Asia and Europe.
Abraaj’s liquidators are in the process of determining the value its assets to settle liabilities, said Air Arabia, which last month revealed that it has begun legal proceedings against Abraaj founder Arif Naqvi in Sharjah.
Abraaj exposure drags Air Arabia to a $166m 2018 loss
Abraaj exposure drags Air Arabia to a $166m 2018 loss
- Air Arabia said it faced impairment charges of 1.13 billon dirhams, mainly due to exposure to Abraaj-related investments
- Dubai-based Abraaj was the largest buyout fund in the Middle East and North Africa until it collapsed last year in the aftermath of a row with investors
Closing Bell: Saudi main index closes in red at 11,167
RIYADH: Saudi Arabia’s Tadawul All Share Index dipped on Wednesday, losing 46.43 points, or 0.41 percent, to close at 11,167.54.
The total trading turnover of the benchmark index was SR4.88 billion ($1.30 billion), as 66 of the listed stocks advanced, while 192 retreated.
The MSCI Tadawul Index decreased, down 5.52 points, or 0.37 percent, to close at 1,506.55.
The Kingdom’s parallel market Nomu lost 153.40 points, or 0.65 percent, to close at 23,486.52. This comes as 32 of the listed stocks advanced, while 31 retreated.
The best-performing stock was Tourism Enterprise Co., with its share price surging 9.95 percent to SR14.36.
Other top performers included Mobile Telecommunication Co., Saudi Arabia, which saw its share price rise by 5.32 percent to SR11.48, and Al Masar Al Shamil Education Co., which saw a 4.86 percent increase to SR22.89.
On the downside, Almoosa Health Co. was the day’s weakest performer, with its share price falling 4.81 percent to SR150.40.
Dallah Healthcare Co. fell 3.81 percent to SR113.50, while Saudi Research and Media Group dropped 3.44 percent to SR100.90.
On the corporate front, Arabian Plastic Industrial Co. has signed a non-binding memorandum of understanding with K. K. Nag to explore the establishment of a specialized manufacturing facility for expanded polypropylene products.
According to a Tadawul statement, the agreement sets out initial mutual obligations and rights between the two parties as part of APICO’s broader expansion strategy to increase production capacity and meet rising industrial demand.
The company’s share price rose 1.21 percent to SR43.52 on the parallel market.
