--2011 loss mainly due to fall in market value of financial investments
--Remains committed to existing investments; eyes new geographies
--Revenues up 76% at AED27.9 billion on ATIC boost
--Total assets rise 73% to AED177 billion in 2011
(Recasts, adds company comments, details throughout.)
By Asa Fitch
Of ZAWYA DOW JONES
DUBAI (Zawya Dow Jones)--Mubadala Development Co., a strategic investment company owned by the Abu Dhabi government, said Thursday it will continue to look at new deals this year, despite losing almost $900 million in 2011 as the value of its financial investments declined.
Mubadala, which owns stakes in the U.S. conglomerate General Electric, semiconductor giant Advanced Micro Devices and private equity firm Carlyle Group, made a loss of 3.2 billion U.A.E. dirhams ($872 million) in 2011 attributable to its shareholders, compared with a profit of AED1.2 billion a year earlier.
The 2011 loss was primarily driven by negative fluctuations in the fair value of Mubadala's financial investments, as well as a reduction in the market value of certain real estate holdings, the company said.
Despite the losses, Waleed Al Muhairi, Mubadala's chief operating officer, said the company would continue to examine new investments this year following its $2 billion deal in Brazil.
The company last month said it would invest $2 billion to buy into the sprawling business empire of Brazil's richest man, Eike Batista, a move that could lead to further investments by the Gulf state in Brazil and Latin America.
"We are looking at geographies that are both new to Mubadala and those that build on positions we currently have," Muhairi said Thursday.
Moreover, the company said it remains committed to its existing investments in spite of its net loss on financial investments reaching AED3.03 billion last year.
"We are long-term holders of these shares and therefore remain completely confident that the long-term value of these shares will be there," Carlos Obeid, the Mubadala chief financial officer, said, adding that these were "paper losses" that simply reflected movements in share prices.
In addition to owning stakes in foreign companies, Mubadala is behind some of Abu Dhabi's biggest domestic investments. These include Strata, a manufacturer of composite structures for the aerospace industry, and Emirates Aluminium.
Other ventures include Sowwah Island, a new central business district being built just off Abu Dhabi's main island, and Masdar City, a renewable energy and technology district near the city's international airport.
Revenues in 2011 increased 76% on year to AED27.9 billion, the company said, boosted by the transfer of the government-owned Advanced Technology Investment Company into Mubadala's hands in February. ATIC holds Abu Dhabi's semiconductor research and production investments.
Research and development expenses meanwhile rose to AED2.95 billion, compared with AED80.3 million a year earlier, Mubadala said, attributing the rise mainly to the transfer of ATIC under its control. Total assets rose 73% from the year before to AED177 billion, also due mainly to the addition of ATIC to its portfolio.
Mubadala is a central cog in Abu Dhabi's attempt to diversify its economy away from oil. The company sold $1.5 billion in bonds last April.
-By Asa Fitch, Dow Jones Newswires, +971 4 446-1685, email@example.com
Copyright (c) 2012 Dow Jones & Co.
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