Gulf Investment House Company

1. Company Overview & Earnings Context

Gulf Investment House (GIH), founded in 1998, is a Kuwait-based Sharia-compliant investment company listed on both Boursa Kuwait and the Abu Dhabi Securities Exchange (ADX). Its core activities include private equity, real estate and direct investments across the GCC, Middle East and selected international markets.

H1 2026 was a stable but mixed earnings period for GIH. Gross profit and income from operations increased, while overall net profit declined. Management attributed the lower bottom line mainly to weaker fair-value performance from investments and higher expenses associated with newly established subsidiaries.

2. Financial Performance Snapshot

• Gross Profit: KD 2.03 Million (+14% YoY)

• Income from Operations: KD 1.71 Million (+7%)

• Net Income: KD 3.74 Million (+11%)

• Expenses & Other Charges: KD 3.00 Million (+17%)

• Profit Before Tax: KD 741.8K (-7%)

• Net Profit: KD 703.4K (-8%)

• Profit Attributable to Parent Shareholders: KD 469.2K (+13%)

• EPS: 1.16 fils, vs. 1.04 fils (+12%)

While consolidated net profit declined, the important positive was that profit attributable to GIH's parent shareholders actually increased 13%, resulting in higher EPS.

3. Operating & Segment Performance

GIH reported 14% growth in gross profit from trading operations, increasing to KD 2.03 million from KD 1.77 million. Income from operations also increased 7% to KD 1.71 million.

The Group operates across Investment, Real Estate and Manufacturing segments. Investment remained the largest contributor, generating KD 896.8K of segment income and KD 813.8K of segment profit during H1 2026.

Manufacturing was the largest revenue-generating segment, with KD 1.92 million of segment income and KD 287.5K of segment profit. Real Estate contributed KD 36.1K of both income and profit.

Unallocated activities recorded a KD 799.3K segment loss, bringing total segment profit to KD 338.1K.

4. Key Performance Drivers

GIH's underlying income performance improved during H1, with net income increasing 11% to KD 3.74 million. However, this improvement did not fully translate into bottom-line growth because expenses and other charges increased 17% to KD 3.00 million.

Management attributed the higher expenses primarily to increased staff and operating costs at subsidiaries established during the previous period.

Net profit declined 8% to KD 703.4K mainly because of a decline in the value of investments measured at fair value, combined with higher general and administrative expenses.

However, the decline was concentrated in non-controlling interests. Profit attributable to non-controlling interests fell 32% to KD 234.2K, while profit attributable to GIH shareholders increased 13% to KD 469.2K, helping EPS rise 12% to 1.16 fils.

5. Balance Sheet & Financial Position

GIH ended June 2026 with:

• Total Assets: KD 72.16 Million (+3.5% YTD)

• Total Equity: KD 58.44 Million (+1.8%)

• Total Liabilities: KD 13.71 Million (+11.5%)

• Equity Attributable to Parent Shareholders: KD 50.50 Million (+1.4%)

• Non-Controlling Interests: KD 7.94 Million (+4.5%)

Management attributed the increase in assets mainly to the purchase of a new investment property in Kuwait.

Investments in associates represented approximately 37.95% of total assets, up from 37.10% at the end of 2025, reflecting additional purchases of associate shares and improved performance from associates. Based on the reported asset base, this makes associates a particularly important component of GIH's financial position.

Liabilities increased primarily because of additional borrowings from local banks. Despite this, equity represented roughly 81% of total assets at the end of June.

6. Investor Takeaway

GIH delivered a mixed but relatively resilient H1 2026 performance. Gross profit increased 14%, income from operations grew 7% and net income increased 11%, demonstrating improvement across several underlying income measures.

Headline net profit declined 8% to KD 703.4K because of weaker fair-value investment performance and higher operating expenses. However, the shareholder-level picture was stronger: profit attributable to parent shareholders increased 13% and EPS rose 12% to 1.16 fils.

The balance sheet also expanded, with total assets increasing 3.5% to KD 72.16 million and equity rising 1.8% to KD 58.44 million. Investments in associates remain particularly important, accounting for almost 38% of the Group's assets, while higher local-bank borrowings pushed liabilities up 11.5%.

Management also addressed the elevated geopolitical volatility experienced during H1 2026. It reported no material disruption to principal operations, adequate liquidity through cash, operating cash flows and committed bank facilities, and no material constraints on meeting financing obligations. Going into H2 2026, the key areas to monitor are investment fair-value movements, associate performance, operating expenses, profitability from newly established subsidiaries, borrowing levels and the impact of regional market conditions.