Multiply Group, a leading Abu Dhabi-based investment holding firm, today reports its Q1 2024 results with a net profit excluding fair value changes of AED 393 million, representing 48 percent growth compared to the same period last year (AED 266 million Q1 2023).

Robust underlying profit growth was driven by strong performance across business verticals. Reported loss of AED 4.2 billion includes over AED 4.6 billion paper losses from unrealized changes in fair value driven by periodic market fluctuations with no implications on the operational performance of the business. In year 2022, we reported paper gains of AED 18.5bn which gives us fair value gains of AED 13bn since then.

Group revenue increased by 45 percent YoY to AED 391 million, driven by growth across all verticals and the consolidation of Media 247 and BackLite Media under the Media vertical. Blended gross profit margin remained healthy at 51.1 percent, reflecting continued profitability across core verticals. Investment and other income was +29 percent YoY at AED 361 million.

Group net profit growth excluding unrealised fair value changes was driven by strong vertical performance (48 percent YoY blended growth) – excluding the Kalyon JV contribution, which was negative AED 13 million on higher deferred tax expense impacted by hyperinflation accounting in Turkey. In Q1 2024, we reported income tax benefit of AED 46 million on the recognition of fair value losses during the period.

Balance sheet remains robust with cash balance of AED 1.62 billion. The Group again demonstrated the value of its long-term strategy by building a diversified portfolio of strong assets across its four core verticals (Mobility, Energy and Utilities, Media and Communications, and Beauty and Wellness) whilst investing in lucrative assets under Multiply+ for double-digit returns.

2024 at Multiply Group is The Year of Efficiency. The Group has identified across its portfolio areas of EBITDA uplift worth up to AED 45 million run-rate. 50 percent of which will come from revenue synergies (e.g. geographic expansion, cross-selling and value-accretive bolt-ons), up to 40 percent through cost optimization (e.g. back-office integration and streamlining procurement) and up to 10 percent from Digital Transformation and Artificial Intelligence initiatives that look to enhance customer acquisition and automate processes.

Under Multiply+, the public market portfolio closed the quarter with a valuation of AED 28 billion, compared to an initial investment of AED 15 billion. Despite market fluctuations affecting the fair value of some assets, notably from the Q1 decline in the share price of TAQA, performance across the portfolio remains strong as does the underlying long-term potential from targeted investments. In its core operational portfolio, the Group focusses on driving synergies and integration among the businesses under each vertical, with emphasis on accelerating digital transformation and operational efficiencies. This is reflected in continued and strong revenue growth.

Samia Bouazza, Group Chief Executive Officer and Managing Director, said, “Throughout Q1 2024, we maintained our focus on delivering strong growth across existing subsidiaries and adding new high-value acquisitions to our portfolio. As a result, net profit and revenue of our operating portfolio grew by 39 percent and 45 percent respectively with Q1 net profit standing at AED 393 million excluding fair value changes. Throughout the quarter, we unlocked value across our businesses by adding new services, introducing efficiencies and reducing operating costs - making us leaner while elevating margins and shareholder returns. Our first acquisition in 2024 was Backlite Media and we will continue to invest in value-accretive targets and acquire profitable companies in emerging markets and across the globe, both in existing and new sectors.”

“Finally, 2024 is this is the year of Efficiency at Multiply Group, where we have identified areas of EBITDA uplift across our businesses that will come from revenue synergies, (e.g. geographic expansion, value accretive bolt-ons), cost optimization (e.g. back-office integration) and digital transformation and AI initiatives that enhance customer acquisitions and automate processes. Therefore, we are positive about our outlook for 2024, but more importantly the long-term sustainable growth of Multiply Group," she added.