Management discussion and analysis
for the period ended 30 June 2022
www.wahacapital.aeAl Waha Capital PJSC (“the Company”) and its subsidiaries (together referred to as “the Group”) reported net profit
attributable to Owners of the Company of AED 87.3 million for the six-month period ended 30 June 2022 compared to
net profit of AED 264.5 million for the corresponding period of 2021.
KEY ACTIVITIES DURING THE PERIOD
Total Public Market assets under management reached AED 4.4 billion (USD 1.2 billion) as at 30 June 2022 in line with
AED 4.4 billion (USD 1.2 billion) as at 31 December 2021. The assets under management attributable to Owners of the
Company were AED 2.9 billion as at 30 June 2022 compared to AED 2.9 billion as at 31 December 2021. The funds’
period to date net returns were: Waha CEEMEA Credit Fund SP of -5.8%, Waha MENA Equity Fund SP of 7.8%, Waha
Islamic Income Fund SP of -0.5% and Waha EM Equity fund SP of -2.0%.
KEY FINANCIAL HIGHLIGHTS
Summary income statement for the
period ended 30 June AED ‘000
H1 2022 H1 2021 Q2 2022 Q2 2021
Revenue from sale of goods and services 55,375 65,719 28,695 33,576
Income / (loss) from equity-accounted
associates and joint ventures, net 4,986 (10,142) 2,303 (4,471)
Gain on disposal of equity-accounted
associates and joint ventures 31,263 50,511 31,263 50,511
Impairment of equity-accounted associates
and joint ventures - (32,014) - (32,014)
Income / (loss) from financial investments,
net 149,853 501,536 (107,815) 277,748
Income from investment property, net 24,572 23,212 12,430 11,542
Other income/(expense), net 2,318 (5,110) 1,827 (6,080)
Total income / (loss) 268,367 593,712 (31,297) 330,812
Cost of sale of goods and services (44,367) (45,528) (22,931) (23,753)
General and administrative expenses -
company (39,181) (82,676) (4,358) (41,217)
General and administrative expenses -
subsidiaries (25,412) (25,050) (13,255) (12,067)
Finance cost, net (54,284) (41,800) (28,547) (21,514)
Total expenses (163,244) (195,054) (69,091) (98,551)
Profit / (loss) for the period from
continued operations 105,123 398,658 (100,388) 232,261
Loss from discontinued operations (6,430) (15,580) (1,008) (11,678)
Non-controlling interests (11,411) (118,597) 42,054 (66,683)
Profit / (loss) attributable to owners of
the Company 87,282 264,481 (59,342) 153,900
Basic and diluted earnings / (loss) per
share (AED) 0.05 0.14 (0.03) 0.08
2Total income / (loss)
Six-month period ended 30 June 2022
Total income of AED 268.4 million for the six-month period ended 30 June 2022, compared to AED 593.7 million for
the corresponding period of 2021, was driven by the following:
• Public Markets income of AED 151.5 million compared to AED 478.0 million in 2021 reflecting challenging
market conditions
• Private Investments income of AED 91.5 million compared to AED 91.6 million in H1 2021 mainly due to
• Revenue from goods and services of AED 55.4 million (H1 2021: AED 65.7 million)
• Income from equity-accounted associates and joint ventures of AED 5.0 million (H1 2021: loss of AED 10.1
million)
• Loss from financial investments of AED 1.6 million against profit of AED 23.8 million in H1 2021
• Gain on disposal of AED 31.3 million (H1 2021: AED 50.5 million); and
• No Impairment adjustment for H1 2022 compared to AED 32.0 million in H1 2021
• Waha Land income of AED 25.4 million compared to AED 24.1 million in H1 2021
Three-month period ended 30 June 2022
Total loss of AED 31.3 million for the three-month period ended 30 June 2022, compared to a profit of AED 330.8
million for the corresponding period of 2021, was driven by the following:
• Public Markets loss of AED 72.2 million compared to AED 268.1 million in Q2 2021
• Private Investments loss of AED 17.1 million compared to profit of AED 50.7 million in Q2 2021 mainly reflecting
• Revenue from goods and services of AED 28.7 million (Q2 2021: AED 33.6 million)
• Loss from financial investments of AED 35.6 million against profit of AED 9.9 million in Q2 2021
• Gain on disposal of AED 31.3 million (Q2 2021: AED 50.5 million); and
• No Impairment adjustment for Q2 2022 compared to AED 32 million in Q2 2021
• Waha Land income of AED 12.8 million compared to AED 12.0 million in Q2 2021
TOTAL EXPENSE ANALYSIS
Six-month period ended 30 June 2022
Total expenses for the six-month period ended 30 June 2022 was AED 163.2 million compared to AED 195.1 million in
2021, mainly comprised of:
• General and administrative expenses - company, amounting to AED 39.2 million compared to AED 82.7 million
for the corresponding period of 2021, a decrease of AED 43.5 million due to lower staff related provisions and
prior year reversals
• General and administrative expenses – subsidiaries, amounting to AED 25.4 million in line with AED 25.1 million
for the corresponding period of 2021
• Finance costs, net - company, amounting to AED 32.9 million, compared to AED 20.1 million in the
corresponding period of 2021, an increase of AED 12.8 million, mainly due to higher utilisation of Revolving
Credit Facility and increase in interest rates
• Finance costs, net - subsidiaries, amounting to AED 21.4 million, compared to AED 21.7 million in the
corresponding period of 2021
Three-month period ended 30 June 2022
Total expenses for the three-month period ended 30 June 2022 was AED 69.1 million, compared to AED 98.6 million
in 2021, mainly comprised of:
• General and administrative expenses - company, amounting to AED 4.4 million compared to AED 41.2 million
for the corresponding period of 2021, a decrease of AED 36.8 million, mainly due to due to lower staff related
provisions and prior year reversals
• General and administrative expenses – subsidiaries, amounting to AED 13.3 million compared to AED 12.1
million for the corresponding period of 2021, an increase of AED 1.2 million
• Finance costs, net - company, amounting to AED 17.8 million, compared to AED 10.3 million in the
corresponding period of 2021, an increase of AED 7.5 million, mainly due to higher utilisation of Revolving
Credit Facility and mainly due to higher interest rates
• Finance costs, net - subsidiaries, amounting to AED 10.7 million, compared to AED 11.2 million in the
corresponding period of 2021, a decrease of AED 0.5 million, mainly due to lower utilisation of repurchase
liabilities for public market funds
3Net profit / (loss) attributable to owners of the Company
Six month period ended 30 June 2022
Net profit attributable to owners of the Company: Net Profit of AED 87.3 million for the six-month period ended 30
June 2022, compared to a net profit of AED 264.5 million for the corresponding period of 2021, was mainly driven by
the following:
• Public Markets profit of AED 93.8 million compared to AED 319.6 million in 2021;
• Private Investments profit of AED 34.0 million compared to AED 32.5 million in 2021;
• Waha Land profit of AED 19.5 million compared to AED 16.8 million in 2021; and
• Loss from discontinued operations of AED 6.4 million compared to AED 15.6 million in corresponding period
of 2021.
Three month period ended 30 June 2022
Net (loss) / profit attributable to owners of the Company: Net loss of AED 59.3 million for the three-month period
ended 30 June 2022, compared to a profit of AED 153.9 million for the corresponding period of 2021, was mainly
driven by the following
• Public markets loss of AED 53.7 million compared to AED 180.2 million profit in 2021;
• Private Investments loss of AED 1.2 million compared to profit of AED 21.6 million in 2021;
• Waha Land Profit of AED 9.4 million compared to AED 8.8 million in 2021; and
• Loss from discontinued operations of AED 1.0 million compared to AED 11.7 million in corresponding period
of 2021.
Net profit / (loss) by segment (AED million)
180 320
Public Markets Asset Management
(54) 94
10 17
Private Investment Private Investment
(2) 28
Waha Land 9 Waha Land 17
9 20
Finance costs (1(1 80 )) Finance costs (20)
(33)
(35)
Other Corp. Costs (69)
6 Other Corp. Costs
(22)
154
Net Profit 265
(59) Net Profit / (loss)
87
Q2 2021 Q2 2022 H1 2021 H1 2022
4Balance sheet highlights
AED ‘000 As at 30-Jun-22 As at 31-Dec-21
Investments in equity accounted associates and joint
169,440 170,242
ventures
Right-of-use assets 33,839 99,649
Investment property 245,400 711,422
Financial investments 6,196,140 6,414,024
Loan investments 36,987 -
Other assets 937,544 772,879
Cash and bank balances 665,968 1,421,350
Assets Held For Sale 668,216 -
Total assets 8,953,534 9,589,566
Borrowings 3,504,394 4,117,198
End of service benefit provision 19,004 26,288
Derivative liabilities 115,566 100,626
Lease liabilities 35,444 119,918
Trade and other liabilities 298,956 434,146
Liabilities Associated with Asset Held For Sale 175,178 -
Total liabilities 4,148,542 4,798,176
Total equity 4,804,992 4,791,390
Total liabilities and equity 8,953,534 9,589,566
Total assets composition (AED million)
The Group’s total assets of AED 8,953.5 million as at 30 June 2022, compared to AED 9,589.6 million as at 31 December
2021, a decrease of 7% and mainly comprised of:
a) Investments in equity accounted associates and joint ventures of AED 169.4 million compared to AED 170.2
million in 2021, a decrease of AED 0.8 million, mainly due to share of profit of AED 5.0 million offset by
dividends received of AED 5.8 million.
b) Financial investments of AED 6,196.1 million compared to AED 6,414.0 million in 2021, a decrease of AED 217.9
million, mainly due to net decrease of AED 559.5 million in public market funds offset by net increase of AED
341.6 million from private investments comprising investment of AED 361.6 million in unquoted funds and
other investments.
c) Cash and bank balances of AED 666.0 million compared to AED 1,421.3 million in 2021, a decrease of AED
755.3 million; mainly includes the following cash flows:
 Corporate: Public Market units redemption of AED 172.9 million offset by dividends paid AED 138.8 million;
 Public Markets: Net disposal of AED 732.6 million and net contributions from non-controlling interest
holders of AED 52.2 million, offset by decrease in repurchase liabilities of AED 597.1 million; and
 Private Investments: Net Investment in unquoted funds and loan investment AED 397.6 million.
5d) Other assets of AED 937.5 million as at 30 June 2022 compared to AED 772.9 million as at 31 December 2021,
an increase of AED 164.6 million mainly due to increase in receivables of public market funds due trom brokers
on settlement of trades offset by reclassification of trade and other receivables as held for sale.
e) Assets held for sale of AED 668.2 million comprise Investment property of AED 466.8 million and healthcare
assets of AED 201.4 million classified as held for sale.
The Group’s total liabilities of AED 4,148.5 million as at 30 June 2022 compared to AED 4,798.2 million as at 31 December
2021, a decrease of AED 649.7 million, comprised of:
a) Borrowings of AED 3,504.4 million compared to AED 4,117.2 million as at 31 December 2021, a decrease of
AED 612.8 million; mainly represents decrease in repurchase liabilities related to public market funds of AED
597.1 million.
b) Trade and other liabilities of AED 299.0 million compared to AED 434.1 million as at 31 December 2021, a
decrease of AED 135.1 million; mainly represents decrease in payables of public market funds due to brokers
on settlement of trades and employee related payments and reclassification of liabilities as held for sale .
6BUSINESS AND PORTFOLIO COMPANIES ANALYSIS
The Group’s business comprises three primary divisions: Public Markets, Private Investments and Waha Land.
Public Markets
The Public Markets division have focused on applying rigorous analysis to emerging markets in order to deliver quality
returns over the market cycle on behalf of the Group and external investors. All the funds within the Public Market’s
management continue to generate strong performances in H1 2022, despite the challenging macro global markets
conditions impacting markets around the region.
Over the last 10+ years, two flagship funds have been established: the Waha CEEMEA Credit Fund and the Waha MENA
Equity Fund. Time, and initial seed capital of AED 368m (US$100m) in each, has been invested to build the team,
infrastructure and track record before looking to raise third party capital.
The Waha Islamic Income Fund SP with seed capital of AED 92 million was launched in Q3 2020 to invest in Sharia
compliant assets across the Sukuk and equity markets.
The Waha EM Equity Fund was launched in Q4 2021 with a seed capital of AED 92 million. The objective of the fund is
to invest in equity and equity related securities in emerging markets.
The key strategic focus of the division is to continue to actively manage client assets, while generating market leading
performance and attracting third party institutional and high net worth investors.
The funds’ period to date returns on invested capital were:
 Waha CEEMEA Credit Fund SP of -5.8% on a fund size of AED 1.77bn (US$ 481.6 million);
 Waha MENA Equity Fund SP of 7.8% on a fund size of AED 2.43bn (US$ 661.8 million);
 Waha Islamic Income Fund SP of -0.5% on a fund size of AED 0.13bn (US$ 36.3 million); and
 Waha EM Equity Fund SP of -2.0% on a fund size of AED 0.10bn (US$ 25.7 million).
Private Investments
The Private Investments business activated its new multi-asset investment strategy and commenced the full portfolio
and team rebuild process in the last quarter of 2021. This included the launch of two new investment portfolios – Global
Opportunities and Core.
The Global Opportunities portfolio has a broad and flexible investment mandate enabling Waha Capital to invest across
geographies, industries, capital structures and asset classes, in an opportunistic manner. This diversified portfolio,
which was launched in November 2021, targets investments in the alternatives space with high risk-adjusted returns.
During H1 2022, five new investments were made into this portfolio totalling AED 406 million. Net Carrying value of the
Global opportunities portfolio as at 30 June 2022 was AED 535 million.
The Core portfolio will seek to take controlling or significant minority stakes in businesses in the MENA region with
established track records, strong management teams and robust governance frameworks. Such companies would
typically demonstrate stable capital growth prospects, whilst providing recurrent and reliable cash yields. The Core
portfolio was seeded with the Company’s healthcare platform as its anchor asset. Net Carrying value of the Core
portfolio as at 30 June 2022 was AED 122 million.
The Legacy portfolio within Private Investments is comprised of existing assets that do not fit within the Global
Opportunities or Core portfolio mandates. A review of strategic alternatives was conducted for each asset within this
portfolio to develop and implement a plan that will maximize shareholder value. As part of that review, the Company
has divested its tactical holdings in the Waha U.S. Securities portfolio and equity investment in ADDAX bank. Net
Carrying value of the legacy portfolio as at 30 June 2022 was AED 471 million.
7Waha Land
Waha Land, a wholly owned subsidiary of Waha Capital, is developing “ALMARKAZ”, an integrated industrial
development with Grade “A” industrial/logistics facilities and first class infrastructure. The development is located in Al
Dhafra, approximately 15 minutes from Mussafah, Abu Dhabi, and is well located to access the multi-modal industrial
and logistics infrastructure (land, sea, air, and rail) of the UAE. The development is on a 6 km2 land, granted by the
Government of Abu Dhabi.
The development is envisioned to be completed in four phases with multiple stages in each phase. Phase 1, which
comprises of 25% of the total land area (1.5 km2), will be completed in three Stages. In Stage 1 and Stage 2A, circa
180,000 m2 of multi-use industrial/logistics units were completed along with the associated infrastructure like roads,
utilities and telecom. The existing units are fully leased out, home to more than 85 tenants, both local and international
entities, from diverse industry segments such as Oil & Gas, Manufacturing, Defence, Logistics, IT, Contracting and F&B.
An expansion, “Stage 2B”, is currently under construction, which will add circa 75,000 m2 of premium industrial/logistics
facilities, with an expected close by Q3 2023. This expansion is in line with the Waha Land’s underlying ethos to execute
a consistent, disciplined investment approach with emphasis on institutional quality assets flexible to suit a variety of
uses and support a diverse range of tenants from different industry segments. Waha Land’s growth strategy is focused
on continuing to grow the leasable portfolio, developing new products and services for the UAE’s Industrial/Logistics
market, in line with dynamically evolving regional and global market dynamics.
During the period ended 30 June 2022, Waha Land reported total income of AED 25.4 million (2021: AED 24.1 million).
The carrying value of investment property was AED 712.2 million as at 30 June 2022, including AED 466.8 million
classified as held for sale.
OUTLOOK
Waha Capital remains focused on generating returns for both its shareholders and clients, in a manner that
is both cautious and sustainable. Despite the unprecedented geopolitical and macroeconomic challenges
that are continuing to impact global markets, the Company’s results for the first half have remained
resilient. The active management of our Public Markets funds has enabled our funds to outperform their
respective benchmarks, with the continued growth of third-party investments and the preservation of
capital remaining our priorities for the remainder of the year. While market conditions are expected to be
uncertain and volatile, Waha Capital is well prepared to weather these challenges using its active investment
approach and broad capabilities.
Despite the continued challenges in the operating environment, we remain cautiously optimistic about the
future as we continue to enhance and develop our investment platform. The Public Markets division
remains steadfast in extending its strong track record of investment outperformance, while working to
promote the platform and attract additional capital from new and existing investors. The Private
Investments team continues to deploy assets into their flagship Global Opportunities portfolio, achieving
positive profit growth in the first half of 2022; while continuing to drive value creation for the Core and
legacy portfolios. Waha Land on the other hand continues to represent a best in class industrial real estate
offering, as reflected in their high occupancy rates. Underpinning this outlook is our continued focus on
maintaining strong corporate governance, protecting both shareholder and client assets, growing the asset
base and achieving economies of scale across our balance sheet
__________________________________________________________________________
Ahmed Khalifa Al Mehairi
Chief Executive Officer, Al Waha Capital PJSC
4 Aug 2022
8

Sentiment: neutral