Annual Report 2023
Half a century of
Nineteen 73
achievement
Two thousand 23
01 | Annual Review |
Corporate Overview | 4 |
Key Milestones | 6 |
Financial Highlights | 8 |
Chairman's Report | 10 |
Board of Directors | 12 |
CEO's Report | 15 |
Management team | 16 |
Approach | 17 |
Review of Operations | 21 |
02 | Corporate Governance |
Governance Report | 27 |
03 | Financial Statements |
Chairman's Statements | 54 |
Independent Auditors' Report | 57 |
Consolidated Statement of Financial | 62 |
Position | |
Consolidated Statement of Profit of | 63 |
Loss | |
Consolidated Statement of | 64 |
Comprehensive Income | |
Consolidated Statement of Changes | 65 |
in Equity | |
Consolidated Statement of Cash | 67 |
Flows | |
Notes to the Consolidated Financial | 68 |
Statements |
His Majesty | His Royal Highness |
King Hamad bin Isa | Prince Salman bin Hamad |
Al Khalifa | Al Khalifa |
The King of the Kingdom | Crown Prince and Prime |
of Bahrain | Mnister of the Kingdom |
of Bahrain |
01 Corporate Overview
Established in 1973 and listed on the Bahrain Stock Exchange, Esterad Investment Company has pioneered the establishment of key national projects and industries and has a long-proven track record of secure investments across a variety of assets, regionally and internationally.
Half a century of
Nineteen 73
achievement
Two thousand 23
Esterad Investment Co. B.S.C. ("Esterad"), is one of the oldest, and leading investment firms in the Kingdom of Bahrain. Established in 1973 and listed on the Bahrain Stock Exchange, Esterad has pioneered the etablishment of key national projects and industries and has a long and proven track record of secure investments in a variety of assets, regionally and internationally. These include Saudi Cement Co, now the largest cement production company in the Kingdom of Saudi Arabia; Balexco, the first privatisation by the Government of Bahrain; and the Bahrain Livestock Firm, amongst many other notable investments.
Esterad investment divisions include Real Estate, Private Equity and Public Market investments. The company invests proprietary capital across a broad spectrum of real estate investments in lucrative locations and sought-after destinations. The company also leverages extensive experience and expertise in multi sector private equity, investing in diversified industries including Cement, Aluminum, Retail, Infrastructure and Technology across the
GCC. Esterad's Public Instruments division invests capital in both equities and fixed income securities in Bahrain, regionally and internationally.
With an ambition rooted in transformative investments in Bahrain and beyond, the Company's world class management team select investments based on stringent risk parameters, including the value added to its shareholders, and to the economies and societies in which we operate and serve.
01 A vibrant history of endeavour
Five decades ofperformance
1973 - 2023
Established in 1973, Esterad has pioneered the establishment of key investments across a variety of assets, both regionally and internationally. Most remarkably, it has performed strongly over a 50-year time-line of massive advancement in both technology and expectation.
The National Import and Export Co.
1973
Esterad was founded in Bahrain with a mandate for immediate expansion.
Established as "The National Imports and Exports Company", it was publicly listed the following year.
1976
Establishment of Saudi Cement Company
The Saudi Cement Company has developed to now become the largest cement production company in Saudi Arabia.
1991
Assisted in founding Bahrain Development Bank Alongside other companies, The National Imports and Exports Company assisted in the establishment of Bahrain Development Bank.
Balexco
1995
Balexco investment realised Investment of 25% shares in Balexco - The first privatization by the Government of Bahrain.
1996
National Concrete Company Investment
Acquisition of 25% of shares in National Concrete Company WLL - focusing on the manufacture and sale of ready-mix, blocks and hollow-core, dredging and sand-washing.
1998
Bahrain Stock Exchange donation
Esterad donated BD 300,000 to finance the automated trading system in the Bahrain Stock Exchange, thus enabling the bourse to improve performance with higher levels of efficiency.
United Cement Company
1999
United Cement Company Establishment of the United Cement Company, the largest importer and distributor of bulk cement in the Kingdom of Bahrain.
1999
Creation of Bahrain Livestock firm
Bahrain Livestock Company was formed as part of a plan to privatize the import and distribution of livestock and meat operations, presently handled by the government itself.
2001
Launched a new strategic direction in focusing on diversified minority investments
Sale of National Concrete Company WLL.
Bahrain Duty Free
2002
Bahrain Duty Free Acquisition A strategic acquisition of Bahrain Duty Free propelled Esterad into retailing of consumer and luxury goods.
2003
District Cooling Company (Tabreed) Acquisition Strategically acquired a 40% stake in District Cooling Company (Tabreed). The investment was exited in 2017.
2004
Strategic acquisition of Label Vie
Invested in Label Vie, a Moroccan retail chain, by acquiring a 12% stake and a seat on its Board of Directors. (Exited in 2007 with a 24% IRR).
2022
Venture Capital Bank Acquisition
2005
Investment in Lefebvre Invested in Lefebvre, a Canadian company that produces aluminum bus bars for smelters. Esterad's share was around 48%. (Exited in 2021 with a return of over 34% from the initial investment).
Lefebvre
2006
Expansion of its Quoted Equity Plan
Reallocated a substantial part of its portfolio of Quoted Equity into new undervalued emerging markets such as Brazil, Russia, China, and South Korea seeking further diversification and stability in earnings.
2008
Strategic investment in Saudi Arabia
Established "Esterad Saudi Invest1 WLL" as a special purpose vehicle to invest in 48% of the shares in M. A. Al-Oraini & Partners Company for Trading & Contracting WLL (OTC), a company conducting corrosion treatment, coating and insulation in the petrochemical and the oil and gas industries. (Exited in 2010 to an international investor with 24% IRR).
2009
Esterad launched a new strategic approach to its business
The capital was expanded, and a highly liquid, low-risk, high-yield investing plan was implemented.
Amwaj Beachfront
2016
Exit from European Islamic Investment Bank (EIIB)
2018
Manarat Investment Holding Joined Esterad Investment Company as major shareholder,
Manarat becomes the largest shareholder in Esterad, turning point in Esterad growth story.
2019
Amwaj Gateway Project Acquisition
Acquired Amwaj Gateway Project, the largest divestment to-date of the Committee for the Settlement of Stalled Real Estate Projects. Rebranded to "Amwaj Beachfront" and launched first phase.
2020
Exit from United Cement Company (UCC),
Esterad was one of the founding shareholders, for BD 2.3 million.
Venture Capital Bank
2020
New Brand Image
Esterad presented an entirely revamped image, characterized by a heightened level of boldness and complete alignment with a fresh ambition to steer its trajectory in the forthcoming decade, symbolizing a strategic shift towards innovation and adaptability in anticipation of the opportunities and challenges ahead.
2021
Marriott Executive Apartments Acquisition Secured a position in the high yield hospitality real estate asset "Marriott Executive Apartments" in Bahrain. (Exit of Marriott Executive Apartments in 2021 with gains being used to purchase premium real estate in Bahrain's Reef Island).
Strategically acquired Venture Capital Bank (VC-Bank), an Islamic wholesale bank licensed by the Central Bank of Bahrain. The Company and shareholders will benefit from VC-Bank's large investor base and its strongly diversified private equity and global real estate portfolio.
Madeleine Preschool
2022
Investment in Education Sector
Commenced investment in the Education sector via Madeleine Preschool where the company will create value through operational improvements and a strategic expansion plan. This will not just create shareholder value, but also support the sustainable progress of the Kingdom of Bahrain through education.
2023
Blue Sky Acquisitions Strategic acquisition of Blue Sky for $135 million with a geographically diversified investment portfolio base of investments in and out of Bahrain to pave the way towards the journey of breakthrough growth in 2024.
01 Financial Highlights
Solid growth
Five-year highlights
Year on Year Financial Performance
2023
2022
2021
2020 2019
BD '000
Net Profit (BD)
5,524
2,161
1,701
754 2,700
Total Assets (BD)
119,859
53,601
50,300
46,878 43,000
Total Liabilities (BD)
71,996
18,099
15,597
12,529 6,403
Shareholders' Equity (BD)
40,199
35,502
34,241
33,863 36,110
Dividend per share (BD)
0.020
0.006
0.006
0.005 0.010
Book Value (BD)
0.274
0.255
0.245
0.243 0.259
Return on equity (%)
13.74
6.09
4.97
2.23 7.48
Return on Assets (%)
4.61
4.03
3.38
1.61 6.28
Three Asset Classes
01. Private Equity
02. Real Estate
03. Public Markets
Esterad is one of the oldest investment firms in Bahrain with 50 years experience in successful investment in Private Equity.
Esterad invests proprietary capital across a broad spectrum of Real Estate investments in lucrative locations and sought after destinations.
For half a century, Esterad has been investing capital across both Equities and Fixed Income markets in Bahrain, the region and overseas.
Financial Performance Overview
(BHD millions)
Net Profit 2023
BD '000
5,524
Total Income 2023
BD '000
7,977
120 100 80 60 40 20 0
2019
2020
2021
2022
2023
Total AssetsTotal Income
Total Assets BD '000
119,859
Asset Portfolio OverviewInvestment Securities
(as at 31 December 2023)
(as at 31 December 2023)
4% 4%
19%
Total Shareholders' Equity BD '000
27%
31%
40,198
11%
61%
43%
Investment Securities
Quoted Bonds and Sukuks
Real Estate
Bahrain Duty Free
Other Assets
Unquoted Equity Securities
Cash and Bank Balances
Quoted Equity Securities
120.0 | ||||
54.0 50.0 | ||||
43.0 | 47.0 | |||
4.4 | 1.9 | 3.3 | 3.6 | 7.9 |
01 Message from the Chairman
Hisham Alrayes Chairman
Esterad's investment strategy is now focused on 'Value Investing' in overlooked opportunities in the GCC.
10
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Disclaimer
Esterad Investment Company BSC published this content on 26 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 March 2024 12:07:00 UTC.