|By Arabian Post Staff| The extent to which the economic slowdown has affected the performance of companies is fairly well known. Still, when Abu Dhabi’s sovereign wealth fund and corporate entity Mubadala announced its half yearly result, it came as a shocker.
The Mubadala Development Co., which has announced a merger with International Petroleum Investment Co., has posted a first half loss of AED 4.43 billion ($1.2 billion) on account of the decline in commodity prices and setbacks in financial investments.
The result compares with a profit of AED 625 million a year ago, according to a statement from the fund. Sales increased to AED 14.3 billion from 13.6 billion, while higher depreciation and impairments brought about a real slump in profits.
IPIC itself suffered a loss of $2.7 billion last year, with assets dropping to $58 billion from $66 billion in 2014.
“The global economic challenges we have faced since the beginning of 2015 persist,” Chief Executive Officer Khaldoon Mubarak said in the statement. “That said, we continue to develop priority sectors and industry champions, in line with Abu Dhabi’s long-term vision.”
According to Bloomberg, Mubarak had said in an interview earlier this week that the fund has been facing difficult market conditions. “It’s been a very challenging year, and that’s been reflected in the results of many companies,” he said. “The key for me, from a Mubadala perspective, is to ensure we continue to manage through these cyclical times from an economic perspective, manage the portfolio of Mubadala in an effective and efficient way.”