FAB’s net income jumps 56% in 2023 + Adnoc’s Borouge sees annual bottom line dip

We have more earnings reports this morning, including First Abu Dhabi Bank, Borouge, Sukoon Takaful, Ras Al Khaimah Ins. and Abu Dhabi National Hotels Group.

FIRST ABU DHABI BANK-

FAB had a strong year: First Abu Dhabi Bank (FAB) saw its net income rise 22% y-o-y to a record AED 16.4 bn in 2023, the bank said in its earnings presentation (pdf). The UAE’s largest lender attributed the strong performance to revenue growth. Operating income jumped 32% y-o-y to AED 27.5 bn, driven by a 27% y-o-y increase in the bank’s net interest income to AED 18.1 bn.

On a quarterly basis,the bank saw its bottom line leap 63% y-o-y to AED 4.01 bn in 4Q 2023, beating analyst expectations of posting a 30% y-o-y increase to AED 3.6 bn. Operating income climbed 17% y-o-y in 4Q 2023 to AED 6.93 bn.

Total assets hit AED 1.2 bn: “We further consolidated our leading position as one of the largest global banks, with total assets increasing to AED 1.2 tn,” FAB chairman Sheikh Tahnoon Bin Zayed Al Nahyan said in the earnings release (pdf).

What’s next for the bank? The bank is targeting a return on tangible equity of above 16% over the medium-term, by “continuing to build on its momentum of business growth and diversification and to strengthen and expand its leadership position in the UAE and its international operations,” according to the earnings release.

FAB expects the Emirates’ GDP to grow 4.5% in 2024, compared to 3.7% in 2023, and also expects the Central Bank of the UAE to cut interest rates three times in 2H 2024, according to the earnings presentation.

BOROUGE-

Borouge’s annual income down, quarterly income up: Adnoc petrochemicals JV Borouge saw its net income fall 29% y-o-y to USD 1 bn (AED 3.67 bn) in 2023 amid dampened demand, according to the company’s annual earnings release (pdf). The company’s revenues dipped 14% y-o-y to USD 5.8 bn (AED 21.3 bn) in 2023, driven by a 16% slump in average selling prices.

On a quarterly basis, the company’s net income increased 16% y-o-y in 4Q 2023 to USD 288 mn (AED 1.05 bn). Meanwhile, quarterly revenues fell 6% y-o-y during the quarter to USD 1.6 bn (AED 5.8 bn).

What they said: “Over the past twelve months we have demonstrated the resilience of our business model and ability to leverage our strong brand positioning, technical capabilities, operational scale and excellence to outperform in challenging market conditions,” Borouge CEO Hazeem Sultan Al Suwaidi said in the earnings release, adding that operational efficiencies helped bolster performance.

Dividends: The company plans to distribute USD 1.3 bn (AED 4.77 bn) in dividends in 2024, according to the earnings release.

Sukoon Takaful reports 2023 loss: Sukoon Ins.’ Takaful arm Sukoon Takaful incurred a net loss of AED 76.5 mn in 2023, widening from an AED 30.7 mn net loss the previous year, according to its financials (pdf). The firm’s revenues for the year inched down 1.5% y-o-y to AED 126.6 mn.

Looking forward: The company expects to achieve a turnaround by the end of the financial year amid steps towards bolstering solvency and optimizing resources, including through the divestment of non-core assets, according to Sukoon’s financial statement.

Ras Al Khaimah National Ins. returned to the green in 2023, recording AED 14.5 mn in net income during the year, compared to 2022’s net loss of AED 35.5 mn, according to the company’s preliminary unaudited financials (pdf), disclosed on the ADX. Ins. revenue stood at 464.4 mn, up from 458.5 mn in 2022.

Abu Dhabi National Hotels Group’s bottom line stood at AED 422 mn in 2023, up from AED 415 mn in 2022, according to the company’s earnings release (pdf). The group’s consolidated revenue stood at AED 1.6 bn in 2023,up from AED 1.5 bn during the same period last year. The hotel segment experienced an increase in revenues, reaching 1.4 bn, up 12% y-o-y. The transport company's revenues for 2023 amounted to 285 mn, reflecting a 11% y-o-y rise.