The Libyan Foreign Investment Company (LAFICO) announced yesterday Financial Results and Key Financial Performance Indicators for the period 2014-2024 and the financial target for 2025 of the company and its owned and subsidiary companies.
It said this comes as part of its firm commitment to promoting the principles of corporate governance, transparency and disclosure policy for 2024, and reflects the company’s keenness to provide accurate and reliable information to all relevant parties.
Challenging macroeconomic environment
LAFICO said that despite the challenging macroeconomic environment, including the global rise in inflation rates – leading to increased interest rates and declining credit ratings for several financial institutions and host countries within the company’s investment portfolio – LAFICO has successfully navigated these challenges with resilience.
Egypt and Pakistan’s falling credit ratings
Citing an example of this ‘‘challenging macroeconomic environment’’, LAFICO highlighted how Egypt’s credit rating declined from B3 in 2016 to CAA1 in 2023, according to Moody’s, while Pakistan’s rating dropped from B3 in 2020 to CAA3 in 2023.
COVID-19, geopolitical instability and currency fluctuations
Additionally, the COVID-19 pandemic and geopolitical instability in key investment host countries, such as Ukraine, Lebanon, Syria, Yemen, Iraq, and Sudan, have further complicated the investment landscape. Sharp currency fluctuations, particularly in Egypt-which accounts for nearly 50% of LAFICO’s total investments – have also posed significant challenges.
UN-imposed asset freeze since 2011
LAFICO also cited structural economic constraints, such as the UN-imposed asset freeze since 2011, which have restricted its ability to manage investment assets optimally.
Implementing an ambitious strategy has led to profits
However, LAFICO said that since the current management took over in the third quarter of the 2021 financial year, the company has implemented an ambitious strategy that has significantly improved financial results, leading to the highest net profits in the company’s history.
Highest net profits in the company’s history
For the 2023 financial year, LAFICO said net profits reached 805 million Libyan dinars (approximately 165 million USD), while preliminary results for 2024 indicate net profits of 771 million Libyan dinars (around 157 million USD).
This marks a substantial improvement compared to 19 million USD in 2015 and a 16 million USD loss in 2017. This exceptional growth in financial performance has strengthened the company’s financial position, with cumulative net profit growth reaching 53%.
Additionally, the return on assets (ROA) has increased from 0.6% in 2016 and 1.5% at its peak in 2019 before the pandemic, to 4.6% in 2024.
Targeting record-breaking net profits in 2025
LAFICO said that in alignment with its strategic objectives and a steadfast commitment to execution through research optimization, and investment, it is targeting record-breaking net profits exceeding 1 billion Libyan dinars in 2025, with an estimated profit of 1.107 billion dinars (approximately 225 million USD).
This milestone will further enhance performance indicators, elevating the return on assets (ROA) to 531%.
LAFICO said since the beginning of 2022, its ambitious initiative to improve and exploit assets within the strategic plan 2022-2026 have delivered the following exceptional results:
Reviving stalled projects: Reactivating all projects stalled for more than 15 years, expanding the real estate portfolio by 687,000 square meters.
A quantum leap in the hospitality sector: The construction, renovation and delivery of more than 4,000 hotel room keys with the specifications of international operators during the period 2022-2024, out of 4,882 rooms planned by 2026.
Exploitation of neglected land: Conversion of 75% of the land that was threatened with withdrawal into real projects with high operational efficiency.
Promising international expansion: 18 new projects launched between Europe and North Africa, including real estate and hotel projects, constituting 67% of the total projects scheduled to be implemented by 2026.
