The Investment Dar - 2008 Results KD80.3 Million Loss

TID has issued a press release on its 2008 financials (Arabic only).  The actual financial report or extracts from it (balance sheet, income statement, etc) don't appear to have been released yet.   So this is a preliminary review.

What are the major financial headlines?

1. 2008 net loss of KD80.3 million.
2. Total assets of KD1,200 million.
3. Total liabilities of KD1,000 million.
4. Shareholders' Equity of KD168.5 million.  A quick look at the above numbers suggests that this does not include minority interests.

Once the financial reports are issued, I post again with an analysis of the numbers.  

The announcement had some other important information:

1. First, we (that is TID) were able to pass through this crisis of asset valuation (definitely nothing to do with our business model) through patience, deliberateness and sound planning.  I'm going to pause for a moment or two while I compose myself.  Luckily at this hour there is no Turkish coffee to spill.  There is apparently plenty of praise to go around and it's only fair to mention all those who deserve it, including oneself.  
2. Elsewhere in the press release TID thanks the Central Bank and the Governor again, the Central Bank's "man" at TID, investors, banks, the Co-Ordinating Committee, TID's advisors, the creditors' advisors.
3. We confirm the soundness of the financial position of TID the improvement in the value of the assets with the recovery in markets  will enable us to discharge all of our obligations.
4. We are committed to implementing the terms of the restructuring which more than two-thirds of our creditors and investors approved as the best solution to exit from the crisis.
5. A significant component of all our assets have values much higher than their accounting values.
6. The provisions and write-downs are both unrealized and temporary.
7. A couple of times elsewhere in the release it's mentioned that more than 80% of creditors and investors approved the restructuring plan as the best way forward.

Now fair is fair (and AA is nothing if not fair).  Earlier I had granted an award of sorts to Dr. Esam Janahi and Gulf Finance House for creative thinking in press releases about their own financial difficulties.  Private sector competition of course. 

Tonight I'm going to have to re-award that honor to Adnan Mussalam and  his team at TID.  Dr. Janahi and his team are going to have to settle for the silver.

How was TID able to pull off this last minute sprint for the Gold?

The three primary factors in their victory were (in order of importance).  

1. Their trumpeting that their losses are not just unrealized.  But are also temporary. 
2. The self-praise. While the entire phrase "with patience, deliberateness and sound planning" was especially well crafted, it was the bit about sound planning.  That's sort of like the chap who  doesn't know how to swim, jumps in the English Channel, gets pulled out just before he goes down for the third and final time and then credits his athletic training and foresight for not drowning.  It takes a special sort of competitor to pat himself so vigorously on the back after falling into such a self-made disaster.
3. Presenting recourse to the Financial Stability Law as a major positive instead of the last recourse to prevent the restructuring from unwinding. 

Of course there were some negative marks for not mentioning the soundness of TID's business model.  Not having a reference to non core assets also cost a few points, though not that many since TID probably has to sell off most or all of its assets to repay its creditors.  It's difficult to use that last expression if one doesn't have a reasonable amount of core assets.

But in the game of life one doesn't have to be perfect, just a bit better than the other contestants.