ADIA eyes stake in Indian snack foods maker

The Abu Dhabi Investment Authority (ADIA) is reportedly in discussions with Indian restaurant company Haldiram over a potential takeover of its snacks business, Reuters reports, citing two undisclosed sources with direct knowledge of the matter. ADIA is engaging in talks via a consortium led by US alternative investment management firm Blackstone, and which also includes Singaporean sovereign wealth fund GIC.

The details: The Blackstone-led consortium has reportedly submitted a non-binding bid for a 75% majority stake in the Indian snacks business, with the potential agreement valuing the company at up to USD 8.5 bn. However, the final stake percentage and valuation are not yet conclusive, with talks still at an early stage, the sources added.

Background: Haldiram was considering giving up a majority stake in both its snacks and restaurant businesses in September 2023 to Indian IT company Tata Group for USD 10 bn. Negotiations with the local bidder have since ceased, with no active agreements in progress, Reuters reports, citing a separate, unnamed source.

ADIA and GIC have investment ties: Talks of a consortium between the Abu Dhabi and Singaporean wealth funds and private equity firms KKR, Permira, and Hellman and Friedman were in play earlier this month for the purchase of a stake in international school operator Nord Anglia.

OTHER M&A NEWS-

American-Canadian packaging and labeling firm CCL Industries has acquired 100% of its joint venture with the UAE’s Albwardy Family, Pacman-CCL, according to a statement. The acquisition is expected to be completed this summer, the statement said, adding that financial details will be disclosed upon completion.

Fast facts: Albwardy family also owns Spinneys Dubai, which it listed on the DFM earlier this month, as well as several food and logistics ventures, including Al Seer, and hospitality and ins. businesses.

Background: The JV operates five production facilities across the UAE, Saudi Arabia, Egypt, Oman, and Pakistan, and is the Middle East’s largest label converter. It serves clients in the home and personal care, pharma, oil lubricants, food, beverage and dairy markets.

Property Finder raises USD 90 mn to fund BECO’s exit: Real estate platform Property Finder secured USD 90 mn from US-based Private Equity firm Francisco Partners to buy out Beco Capital’s stake in the platform, Bloomberg reports. Beco Capital — Property Finder’s first institutional investor — exited Property Finder “with a strong return on investment,” providing no further details on the transaction.

The transaction marks Francisco Partners’ first investment of its kind in the Emirates, signaling continued foreign investor interest in the UAE’s real estate market.

Property Finder — currently valued at around USD 1 bn, making it one of the region’s unicorns — is looking to expand into Saudi Arabia and Turkey after having expanded operations in Qatar, Bahrain, and Egypt. The real estate platform

Lahyani sees “hyper-growth” in the UAE’s property market coming to an end: “A real estate market that grows at 50% is not going to be sustainable for the long run and everybody knows that. What we’re seeing right now is a transition from a hyper growth market to a market that is going to continue to grow but in a more sustainable way,” he said.

Advisors: JPMorgan & Chase Co. and White & Case served as advisers to Property Finder on the transaction.

SPINNEYS-

Spinneys’ net income grew 12.8% y-o-y to AED 74.7 mn in 1Q 2024, according to the company’s first financial statements (pdf) filed with the DFM since listing last week. Growth came despite one-off IPO-related costs of AED 10 mn and pre-store opening expenses in Saudi Arabia, and was driven by efficient sourcing and supply chain capabilities and a successful private label strategy, the company said in a separate earnings release (pdf).

The company booked AED 814.8 mn in revenues, climbing 10.9% y-o-y on the back of better performance across its retail segment, which saw transactions up by 9.5% y-o-y to 802k. Revenue improvement was also boosted by heightened customer demand and a 10.9% y-o-y increase in e-commerce sales, the company said.

Looking ahead: The company plans to launch several new stores and concepts in 2024, including three new stores in the UAE, and Spinneys’ first standalone dining concept — dubbed The Kitchen — in 1H 2024. Spinneys will also debut a La Strada store in Saudi Arabia in 1H 2024, with three more stores slated to launch by the end of the year.

REMEMBER- Spinneys debuted on DFM this month: Al Seer Group listed 900 mn of its shares — equivalent to a 25% stake — in Spinneys on the DFM earlier in May, raising AED 1.38 bn after receiving more than AED 71 bn in orders.

EMAAR-

A solid quarter for Emaar: Real estate developer Emaar Properties saw its net income before tax grow 16% y-o-y to AED 4.3 bn in 1Q 2024 as the real estate sector continued to see robust demand, according to its earnings release (pdf). Revenues came in at AED 6.7 bn, marking a c. 6% y-o-y increase. Growth in retail sales and tourism demand also boosted performance.

The developer made a record AED 13.5 bn in property sales during the quarter, marking a 47% y-o-y growth. Its revenue backlog from property sales rose to AED 78.3 bn.

REMEMBER- In real estate, sales ≠ revenues. With off-plan sales dominating the industry, most real estate companies book a sale when you sign a contract to buy a home. But they only record (some or all) of the value of the unit it sold you when it (a) delivers the unit to you or (b) hits a percentage completion on a total project. In most cases, then, revenues are composed of sales from past periods, while sales in a given quarter will be recognized as revenues in the future when units are completed or delivered.

How Emaar’s subsidiaries performed: Emaar Development’s revenues reached AED 3.5 bn during the quarter, while Emaar Malls’ posted AED 1.4 bn in revenues.

AD PORTS-

Abu Dhabi-based port operator AD Ports Group recorded a 10% y-o-y increase in net income to AED 400.0 mn in 1Q 2024, according to an earnings release (pdf). The company’s revenue more than doubled to AED 3.9 bn, marking a 22% y-o-y increase after adjusting for the impact of M&A.

Breakdown: Revenues from the group’s Ports Clusters rose 80% y-o-y to AED 565 mn, which AD Ports attributed to growth in port leases, general cargo handling, and Ro-Ro handling. The maritime & shipping division’s revenue rose 92% y-o-y to AED 1.76 bn, making it the largest contributor of revenue and EBITDA, according to the release. Meanwhile, the logistics segment's revenue rose seven-fold to AED 1.08 bn, boosted by recent acquisitions and a new logistics JV in Uzbekistan.

Key acquisitions drove AD Ports' earnings growth: Strategic acquisitions, including Noatum Logistics, Sesé Auto Logistics, and the Global Feeder Shipping in late January, all contributed to higher revenues during the quarter.

Looking ahead: “Going forward, we plan to commercialize and drive up utilization of existing and upcoming assets, maximizing their value, while we focus on consolidating our position in Abu Dhabi across all clusters, as foreign direct investments in the UAE continue to soar, Group Chief Strategy and Growth Officer Ross Thompson said.

FERTIGLOBE-

Urea and ammonia exporterFertiglobe’s adjusted net income fell 11.9% y-o-y in 1Q 2024to USD 119 mn on the back of lower prices and market volatility, according to an earnings release (pdf). The company’s revenues also dipped 20% y-o-y to USD 552 mn, with decreasing crop and energy prices and reduced imports from India and Europe impacting performance.

On the bright side: Sales volumes were up 5% y-o-y, driven by increased production and efficient inventory management, with ammonia sales rising 22% and urea sales rising 1%, Fertiglobe CEO Ahmed El Hoshy said. Adnoc's acquisition of OCI's 50% stake in Fertiglobe, set to be completed this year, is also expected to drive the company's growth into new markets.

Looking ahead: Adnoc's planned acquisition of OCI’s 50% stake in Fertiglobe is expected to close this year, Fertiglobe said. The transaction “supports Fertiglobe’s growth strategy” and is set to support the company’s expansion into new markets and “[unlock] further potential in its core products of urea and ammonia.”

YAHSAT-

Al Yah Satellite Communications Company’s (Yahsat) net income attributable to shareholders rose 96% y-o-y to AED 185.9 mn in 1Q 2024, according to the company’s financials (pdf). The company posted revenue growth of 1% y-o-y amounting to AED 371 mn for the period.

Infrastructure and managed solutions drove growth: Yahsat attributed its strong quarterly performance to 1% y-o-y growth in its infrastructure operations, which supply long-term indexed communications capacity to the government, as well as 19% y-o-y growth in managed solutions, which deliver satellite comms to government entities, according to its earnings release (pdf).

Looking ahead: The company is currently working towards finalizing its USD 5.1 bn capacity and managed services mandate contract with the government, along with procuring two new satellites, Al Yah 4 and Al Yah 5, according to Yahsat CEO Ali Al Hashemi. The company is also “working on completing the procurement of Thuraya 4, to be launched into space in the second half of this year.”

Remember- The company is also looking to finalize its merger with Bayanat in 2H 2024, after the two companies’ boards signed off on the merger in April.

DUBAI INVESTMENTS-

Dubai Investments net income fell 61.8% y-o-y to to AED 120 mn 1Q 2024 due to an unfavorable base effect on the back of a one-off gain on the fair value of investment properties in 2023, according to the company’s earnings release (pdf). Excluding the one-off gain, Dubai Investments’ bottom line would have risen 90% y-o-y during the quarter. The company recorded AED 791.9 mn in revenues during the quarter, down 21.6% y-o-y.

Looking ahead: “The group’s dedication to prudent portfolio growth and strategic asset expansion remains unwavering, as evidenced by the upcoming launch of DIP Angola that promises infrastructure development and economic growth in Africa,” the company said. The company will focus on rolling out key real estate projects initiated in the previous year.

E7-

E7 Group had a stable quarter: Printing company E7’s net income after tax increased 29.4% y-o-y to AED 26.6 mn for 1Q 2024, according to the company’s financials (pdf). The company’s revenues remained somewhat stable, inching down 1% y-o-y to AED 126 mn due primarily to a revised delivery schedule of a key commercial printing contract, according to its earnings release (pdf). Revenues from the contract will be realized in 2Q 2024.

Refresher: E7 reported a net loss of 51.1 mn in 2023, compared to a net income of AED 67.9 mn in 2022. Net income was influenced by E7's listing on the ADX as a de-spac entity, the region’s first. The company’s board approved a 1:10 share split back in April to help attract retail investors and “indirectly improve” liquidity.

BAYANAT-

Geospatial services provider Bayanat saw its net income after tax fall 53% y-o-y to AED 10.3 mn in 1Q 2024, according to its financials (pdf). Bayant saw its revenues climb 12% y-o-y to AED 113.3 mn for the quarter, driven by “the expansion of its market presence and its strong product range and service offerings,” it said in its earnings release (pdf).

Looking ahead: Bayant will continue to work with Yahsat to finalize their merger, creating AI-powered space tech firm Space42, set for completion in 2H 2024.

SHARJAH CEMENT AND INDUSTRIAL DEVELOPMENT-

Sharjah Cement turns to the black in 1Q: Sharjah Cement and Industrial Development turned to profitability in 1Q 2024, reporting a net income of AED 8.4 mn for the quarter, compared to the AED 7.4 mn loss incurred during the same period last year, according to the company’s earnings release (pdf). The company attributed the recorded income to lower raw material and energy costs, along with higher investment returns. Sharjah Cement saw its revenues rise to AED 167 mn during the quarter, up 6% y-o-y, according to the company’s financial statements (pdf).

TABREED-

District cooling firm Tabreed’s net income after tax fell 52% y-o-y to AED 112 mn in 1Q 2024 on the back of one-off gains in the same period last year,according to its earnings release (pdf). Tabreed posted AED 122 mn in net income before tax, marking a 4% y-o-y rise during the quarter. The district cooling company’s revenues remained relatively flat in 1Q at AED 468 mn, up 0.8% y-o-y from the AED 464 mn reported during the same period last year.

INVESTCORP CAPITAL-

Investcorp Capital’s bottom line dropped 35% y-o-y to USD 49 mn in 3Q of its 2023/24 fiscal year, owing to lower value gains and performance fees, which it attributes to “the prevailing market conditions,” according to its earnings release (pdf). The company saw flat growth in its revenue from capital financing services, logging USD 33 mn during the quarter, compared to USD 34 mn in the same period the previous year, while its revenue from capital deployment tumbled 44% y-o-y to USD 29 mn. Investcorp’s fiscal year runs from July to June.

ARAM GROUP-

ARAM Group saw its net income rise 56% y-o-y to AED 455k in 1Q 2024, driven by an appreciation of its share investment in Kuwait Hotel, according to the company’s earnings release (pdf). The investment company’s revenues remained relatively flat at AED 2.4 mn — 97% of its budgeted revenue — during the period.

ARAM achieved its highest occupancy level recorded at 96.54%, up nearly eight percentage points from the previous year, but growth was hindered by its limited number of available rental units following the disposal of its Industrial Area 3 property.

Looking ahead: The company plans to roll out “continuous improvements to current facilities and strategic projects in the pipeline,” it said. It will also focus on diversifying its portfolio, and is in the process of setting up new investment plans and strategic initiatives to expand operations into high-yield business segments.

NAEEM HOLDING FOR INVESTMENTS-

Naeem Holding for Investments turned to the black in 1Q 2024, reporting a bottom line of USD 492.8k over the period, compared to the USD 37k loss recorded in the same quarter last year, according to its financial statements (pdf). Its top line stood at USD 3.4 mn during the first three months of 2024, reflecting an increase of 59% y-o-y during the quarter.

NATIONAL CEMENT COMPANY-

Dubai’s National Cement posted a 155% y-o-y increase in net income to AED 129.5 mn in 1Q 2024, according to the company’s unaudited financials (pdf). The cement manufacturer’s revenues rose 30.5% y-o-y to AED 55.3 mn.

UNIKAI FOODS-

Dubai-based Unikai Foods reported a bottom line of AED 4.4 mn in 1Q 2024, up 712% y-o-y, according to the company’s unaudited financials (pdf). The company’s revenues increased 23.1% y-o-y to AED 96.5 mn, according to the statement.

GULF MEDICAL PROJECTS-

Gulf Medical Projects saw a 39% y-o-y jump in its bottom line, reaching AED 23 mn in 1Q 2023, according to the hospital operator’s earnings release (pdf). The company logged AED 167 mn in revenues for the period, marking a 23% y-o-y increase.

EMIRATES INVESTMENT BANK-

Emirates Investment Bank’s bottom line fell 8.5% y-o-y to AED 31.1 mn in 1Q 2024, according to its consolidated financials (pdf). The investment bank’s interest income rose 35.5% y-o-y to AED 30.8 mn, while its net income from both interest and investments more than doubled to AED 41.4 mn, posting a 117.4% y-o-y growth.

US-based asset management company Blue Owl has appointed Haitham Abdulkarim (LinkedIn) to lead the company’s institutional business in the region, according to a statement. Abdulkarim previously headed BlackRock in the UAE. The appointment comes as Blue Owl expects to open its regional office in Abu Dhabi in the coming months, Bloomberg reported previously. The company, with USD 174 bn worth of assets under management, is looking to get a foothold in the region by securing funds from family offices, pensions and sovereign wealth funds.

It’s relatively quiet for UAE in the news: France24 has a feature out on Chad McGehee, the founder of the Abu Dhabi-based Craft pub, and his efforts to set up the sole licensed microbrewery in the Arab Gulf region. Plans to establish the pub followed Abu Dhabi's relaxation of alcohol laws in 2021, in a bid to attract more tourists to the emirate. Meanwhile, the Washington Post looks at the US’ increased interest in the UAE’s AI sector, and how the two countries are managing “risks” associated with Chinese investments in the sector.

FINANCIAL SERVICES-

ADGM watchdog grants Liminal greenlight: Liminal Custody, a digital wallet infrastructure provider, will now be able to operate as a digital asset custodian in the Mena region after receiving a financial services permission license from Abu Dhabi Global Market’s (ADGM) regulator, the Financial Services Regulatory Authority (FSRA), according to a statement. The FSP license will allow Liminal to hold and manage digital assets for retail and institutional investors, hedge funds, and venture capital firms, Liminal said.

LOGISTICS-

#1-RSA cold chain JV breaks ground on Jebel Ali facility: RSA Cold Chain, a joint venture between Dubai-based RSA Global and US publicly listed temperature-controlled warehousing company Americold, began construction of its flagship facility in Dubai's Jebel Ali Freezone (Jafza), according to a press release. Built in collaboration with Group Amana, the center will feature eight chambers and expand pallet capacity by 40k, maintaining temperatures as low as -25°C. The project is scheduled for completion in 1Q 2025, with plans to double capacity to 70,600 pallets.

#2- DP World + Einride to deploy the Middle East’s largest fleet of driverless electric cargo vehicles: DP World and autonomous and electric freight mobility outfit Einride have inked an agreement to electrify inter-terminal container flows at Jebel Ali Port, according to a press release. The agreement will see the dispatch of 100 connected electric trucks — the largest fleet of its type in the region. Deployment will begin late this year, and will ramp up to support 1.6k container movements per day. Pilot trials for autonomous trips will kick off in 2025, the statement said.

About the fleet: The fleet will be managed through Einride Sage — a digital operating system that can analyze, optimize, and increase efficiency of electric and autonomous road freight operations, according to the statement. The fleet will curb some 14.k tonnes of CO2 and 158 tonnes of nitrogen oxide emissions per day, once it reaches full capacity.

HEALTHCARE-

M42’s biobank is on track to open next year: Abu Dhabi-based G42 healthcare arm M42 is set to launch a 2 sqkm net-zero biobank in Masdar City next year, in collaboration with Abu Dhabi’s Department of Health, M42 Senior VP Albarah Elkhani tells The National. The center will hold the largest collection of human biomaterials in the region, storing up to 5 mn biological samples and 100k stem cells. It will also feature the region's first public cord-blood bank.

The center will serve the entire region, in a bid to address the underrepresentation of Middle Eastern and Asian communities in global clinical trials, and facilitate research efforts for novel treatments and drug discovery. It will employ local talent, with collaborations with universities currently underway to develop programmes on biobanking to ramp up local expertise.

SUSTAINABILITY-

Tadweer to build waste sorting facility in Abu Dhabi: Abu Dhabi waste management company Tadweer has issued tenders to establish the emirate’s first greenfield Material Recovery Facility, according to a statement. Construction on the plant, which will have the capacity to process 1.3 mn metric tons of waste annually, will start by the end of the year after the contract is awarded, with operations set to begin in 2026.

The details: The plant will sort recyclables from solid waste, reducing landfill use and producing materials for Abu Dhabi’s waste-to-energy facility, the statement adds. The project will contribute to Tadweer Group's goal of diverting 80% of waste from landfills by 2030. The long-term plan for the facility also includes providing feedstock to produce sustainable aviation fuel.

FOOD-

Abu Dhabi-based agrofood tech company Silal has opened a 12 sqkm automated packhouse in Al Ain, the Abu Dhabi Media Office reports. The new facility, equipped with 28 precooling chambers and nine cold stores, has a daily capacity of 325 tons and is capable of producing 180k packs per day.

The US has gone on the offensive in the trade war with China, with the White House yesterday announcing a raft of tariff increases on USD 18 bn worth of Chinese imports that will each begin taking effect between 2024 and 2026.

Biden has his eyes set on green tech, deciding that tariffs on Chinese EVs will quadruple to 100%, those on lithium-ion EV batteries to more than triple to 25%, those on solar cells to double to 50%. And he hasn’t forgotten about semiconductors, as tariffs on chips from the world’s second biggest economy are set to double to 50%.

Biden’s tough talk seems to be directed to US voters as much as it does to China, warning the world’s factory yesterday that “when you make tactics like this, you’re not competing, it’s not competition, it’s cheating. And we’ve seen damage here in America” (watch, runtime: 22:30). The US is a minor market for Chinese EVs today.

YOU HAVE TO LOVE IT- Evli Emerging Frontier Fund has beaten 99% of its peers over the past five years. It’s next big thing? small-cap stocks, this time in Turkey. An ambitious fund manager that’s building a story about a great segment of the economy in a country that has plenty of challenges — and tons of potential? What’s not to like. Bloomberg has more.

ALSO- BlackRock is making its presence felt in the crypto space after building up USD 16.7 bn in assets since the launch of its crypto exchange-traded fund (ETF) in January 2024. Despite initial reluctance to move into crypto — which CEO Larry Fink called “an index of money laundering” in 2017 — BlackRock is now the second-largest BTC fund after market leader Grayscale. The asset manager has also rolled out a crypto treasury fund that is already being used by hedge funds and money markets to source collateral for crypto trades.

MARKETS THIS MORNING-

It’s a mixed morning in Asia: The Shanghai Composite is down, the Nikkei is up, and markets in both Hong Kong and South Korea are closed in observance of Buddha’s birthday. Futures suggest European and US markets will open in the green later today as traders wait for a key US consumer price report later today.

THE CLOSING BELL-

The ADX fell 0.4% yesterday on turnover of AED 941.6 mn The index is down 5.4% YTD.

In the green: Bank of Sharjah (+7.3%), Agthia Group (+4.2%) and Adnoc Drilling (+3.7%).

In the red: Fujairah Building Industries (-9.8%), Palms Sports (-5.8%) and E7 Group (-5.6%).

Over on the DFM, the index fell 0.9% on turnover of AED 694.2 mn. Meanwhile Nasdaq Dubai dropped 0.8%.

CORPORATE ACTIONS-

Aramex has tapped Arqaam Securities as a liquidity provider for its listed shares on the DFM, the company stated in a DFM disclosure (pdf).