The Arab Petroleum Investments Corporation (APICORP), a multilateral financial institution, today announced its financial results for the first six months of the year ending on June 30, 2022.
APICORP continued its post-pandemic growth with major financial and operational achievements against a backdrop of market volatility and inflation concerns that have sparked significant rates hikes and asset pricing fluctuations globally. At the end of the first half of 2022, APICORP recorded a net income of USD 52mn, a 67% y-o-y increase. The Corporation’s balance sheet marginally grew by 3% y-o-y to USD8.26bn. Net income from operations grew significantly to USD 97.9 million in H1 2022 from USD 40.7mn in H1 2021
Growth in Treasury and Capital Markets
APICORP’s Treasury assets reached USD 2.9bn, representing an increase of USD 712mn or 32% y-o-y rise. This was attributed to good opportunity available in money market placements and lower cost of funding for short-term borrowings.
Moreover, Treasury income grew by USD 31.6mn mainly due to restructuring of Treasury investment book and higher gross interest earnings and capital gains from sale of fixed income securities as average price of LIBOR reached 100 bps compared to 18 bps in H1 2021.
Dr. Aabed Al-Saadoun, Chairman of the APICORP Board, said: “APICORP has continued to deliver robust and consistent results in the first half of 2022, despite growing market volatility and inflation concerns. Our structural and strategic resilience has facilitated exceptional performance in all our business segments as we continue to showcase our economic and community impact and cement our legacy of financing for impact.”
Khalid Ali Al-Ruwaigh, Chief Executive Officer of APICORP, said: “Even as the global and regional financial markets are facing economic headwinds, APICORP recorded an increase in balance sheet and income y-o-y during the first six months of 2022. All business units continued to deliver growth showcasing alignment with our growth strategy. The Treasury business unit in particular showcased growth led by better money market performance of our investments. Our goals continue to define our ongoing operational and financial performance as we work towards achieving a balanced energy transition and providing financial services and solutions for the energy of tomorrow.”
Business Line Highlights
Treasury & Capital Markets
The treasury and capital markets portfolio had an exceptional first half due to lucrative opportunities available in money market placements. The unit was the best performer increasing in size in the first six months of 2022 to USD 2.9bn and beating budgeted returns to record a gross income of USD 21.9mn.
The net income of the Corporation’s equity investment portfolio rose by 41% to reach USD 30mn in the first half of 2022, buoyed by higher dividend income. Investment assets increased by USD 25.5mn due to upward revaluation of certain investments.
Corporate Banking Corporate banking unit’s assets slipped by 10% to USD 4.1 bn due to net repayment including secondary market sales. While the gross income rose by 22% y-o-y reaching USD 74.7mn in H1 2022.
Earlier this year, APICORP successfully launched the first A/B loans program in the region leveraging its preferred creditor status to encourage international debt financing for projects in the region. The A/B loan facility is a significant addition to APICORP’s extensive range of innovative financial solutions as it continues to support the sustainable development of the region’s energy sector. In April, APICORP received ‘A2’ Sustainability rating as it became the first financial institution in the region to receive a solicited Sustainability rating from Moody’s, reflecting the corporation’s successful integration of ESG factors into its strategy, operations and risk management.
APICORP received ‘AA-‘ credit rating with ‘stable’ outlook from S&P Global in March, reflecting its robust financial performance and risk profile. In June, Fitch affirmed APICORP’s rating at ‘AA’ with outlook revised to ‘positive’ on the back of its steady improvement in key solvency and liquidity metrics, making it one of the highest-rated financial institutions in the MENA region.