Inovest has reported a consolidated net loss of $0.18 million for the three months ended December 2020 in comparison with a net profit of $2.14m for the same quarter of 2019.
Accordingly, the basic loss per share for the quarter amounted to 0.06 cents as compared with earnings per share of 0.72 cents for the same period in 2019.
The decrease is primarily due to a decline in real estate sales and revenues, a drop in their relative values, and in revenues from management fees.
Accordingly, the net operating loss was $0.26m compared with a profit of $2.1m earlier.
For the year 2020, consolidated net profit was $5.03m, representing a 30 per cent decrease from $7.15m for 2019.
This decline is the outcome of a decrease in the fair value of a number of investments, as well as a drop in associated management fees.
Moreover, it stems from decline in revenue from contracting activities and a decrease in capital gain due to real estate exits.
Accordingly, the group reported basic earnings per share as of end-2020 amounted to 1.69 cents as compared with 2.4 cents in 2019.
Consolidated net operating loss was $0.7m in comparison with a profit of $6.17m in 2019.
Accordingly, net profit of 2020 resulted mainly from the reversal of provision of $6m against one of the accounts receivable.
In line with this, the consolidated operating income decreased by 49pc to $10.10m in comparison to $19.9m.
Operating expenses were reduced by 22pc to $10.78m in 2020 from $13.78m in 2019.
This stems from consistent control of expenses, as well as the reorganisation and reallocation of critical resources, and ongoing repayment of financing instalments at a local financial institution with the aim of lowering the financing costs.
The decline also stems from the reclassification of labour costs reported by the contracting arm.
Equity increased by 3pc to $141.62m in comparison with $137.97m at the end of 2019; attributed to the net profit of $5m, and upward fair value revaluation of $1.5m netted against a provision of $2.9m representing the impact of adopting FAS 30.
Consolidated total assets were $241.43m, representing a decline of 1pc during the last quarter of 2020 in comparison with $244.22m at the end of 2019.
On the liquidity front, cash and bank balances stood at 10pc of total consolidated assets.
As of end-2020, the cash and bank balances were at $23.4m, a 37pc decrease from $37.3m as of end-2019 which stems from settlements and a capital investment related to an industrial manufacturing investment.
Commenting, Inovest chairman Dr Omar Al Mutawa said, “We are pleased to see that the group has maintained a solid performance despite current conditions. The path ahead in 2021 is a difficult one to predict, however, we do know it will be characterised for our executive team by a firm sense of diligence and pragmatism in dealing with exceptional circumstances.
“Although our corporate strategy with its principle of sustainability has served us well, we recognise the importance of re-evaluating with all that has transpired in the past year. Generally, it is expected that our investment approach will be a guarded one in the year to come, with our priority being growth of our income generating assets and taking on acquisitions with a prudent view of risk and reward.
“Operationally, we will continue to streamline efforts towards enhanced efficiency and effectiveness on a group-wide front. To that end we will continue to support our key subsidiaries and ensure they deliver to their fullest potential.”
Inovest chief executive Yasser Al Jar said, “During the course of 2020, we have managed to overcome several challenges. Several practical initiatives were undertaken including some necessary settlements, which ultimately had a positive impact on the financial standing.
“In terms of our new investments, we stayed true to the investment strategy, and acquired 45pc of AIM Manufacturing Group, the only specialised regional manufacturer of Wood Plastic Composite (WPC) products with a wide range of business and construction applications and a promising level of market demand.
“We placed considerable effort in maintaining and growing ongoing investments. Work has begun on expanding the BIW Labour Accommodations project, and support and resources have been extended to Takhzeen which will soon be marking 10 years of successful operation.
“As for Durrat Marina, several steps were taken to improve project standing including the settlement of several debts, which resulted in the release of real estate assets and substantial relief in terms of liquidity.
“Additionally, specific effort was placed on bringing forward construction of the project’s power station which will serve the retail zone and marina.”
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