A multilateral development financial institution, Arab Petroleum Investments Corporation (APICORP) Tuesday announced a marginal growth of three percent in net income for 2020 financial year.
Continuing its record performance, the Corporation posted a 3 percent rise in net income despite the fallout of the unprecedented COVID-19 global crisis from $112million in 2019 to $115million in 2020.
The key growth drivers of the Corporation include a 6 percent growth in APICORP’s Corporate Banking portfolio to $3.9billion, as well as a 13 percent increase in its Treasury & Capital Markets portfolio, which also netted $46million in capital gains and a 488 percent increase from the prior year.
Moreover, the Corporation’s balance sheet increased from $7.34billion to $7.89billion in 2020, a 7.5 percent uptick which is higher than the 5 percent CAGR recorded over the past five years.
Key financial and risk metrics also continued their steady improvement, as the Corporation recorded its highest ever liquidity ratio at 349n percent and increased its capital adequacy ratio to 31 percent, as well as reducing its leverage level from 2.5x in June 2020 to 2.23x in December 2020.
Apart from demonstrating the strength and resilience of APICORP’s financial position, the robust financial and risk metrics enabled APICORP to retain its ‘Aa2’ rating with a stable outlook from Moody’s and earned its inaugural ‘AA’ rating with a stable outlook by Fitch, the only regional financial institution in MENA to hold two ‘AA’ ratings.
The year also witnessed a landmark capital increase by which the Corporation increased its authorized capital from $2.4billion to $20billion, subscribed capital from $2billion to $10 billion, paid-up capital from $1 billion to $1.5 billion, and callable capital from $1 billion to $8.5 billion.
Commenting on APICORP’s results, Dr. Aabed bin Abdulla Al-Saadoun, Chairman of the Board of Directors said the strong 2020 financial results despite the uncertain economic landscape that clouded most of the year illustrates APICORP’s exceptional steadfastness and resilience.
He explained that the fact that the financial year ended with a 3 percent increase in net income points to the Corporation’s strong and solid fundamentals.
“As the region, and indeed the world, begins to recover from the impact of the COVID-19 pandemic, we are confident that we will continue to ably support the MENA energy sector, including the proactive advancement of the energy transition agenda”, Al-Saadoun said.
Dr. Ahmed Ali Attiga, Chief Executive Officer of APICORP was proud the Corporation closed the year with milestones achieved in 2020 were made more remarkable given the shockwaves of the unprecedented triple crisis stemming from the COVID-19 pandemic that severely impacted the financial results of peer financial institutions and affected all sectors.
Complemented by the resolute support from our Member Countries, deep partnership base, and the hard work of all staff members, our positive results underscore the soundness of our long-term investment and funding strategy, as well as our agile and efficient approach to tackle the challenges of 2020.
“Looking ahead, we will continue to solidify our position as the trusted financial partner to the MENA energy sector. In line with our development mandate, we aim to focus on supporting the growth of the private sector – particularly in the clean and renewable energy space – to accelerate the energy transition and build a more sustainable future for the Arab region,” Dr. Attiga added.
Although the 2020 crisis affected the revenues of some investee companies, it also opened opportunities for APICORP to pursue quality investments in high-potential well-run companies alongside like-minded investors seeking to maximize long-term value creation and impact. The year witnessed the Corporation making its first-ever equity stake in a wind energy company, while at the same time progressing on a number of exits from current investments to optimize the balance sheet as well as capitalize on the positive long-term growth prospects of its equity portfolio.