PIF Confirms Commitment to IFRS Compliance for London Stock Exchange Listing

By Fahd Talal

The Public Investment Fund confirmed in its consolidated financial statements its commitment to applying the International Financial Reporting Standards (IFRS) in accordance with the requirements for listing on the London Stock Exchange. The Fund continued its strong financial and investment performance during 2023, achieving growth in its total sustainable financial returns, profits, and asset value, thereby enhancing its contribution to advancing economic transformation in the Kingdom in line with Saudi Vision 2030.

The Public Investment Fund’s announcement of its consolidated financial statements comes as part of its commitment to transparency and governance, aligning with the best international practices of major financial institutions and sovereign wealth funds.

The report covers the period from January 1, 2023, to December 31, 2023, during which the Public Investment Fund recorded a growth of more than 100% in its total revenues, rising from 165 billion riyals to 331 billion riyals, supported by the growth in the market value of its investment portfolio. The value of its assets also increased by 28%, reaching 3.7 trillion riyals at the end of 2023, compared to 2.9 trillion riyals at the end of 2022, bolstered by several acquisitions and the transfer of a percentage of Aramco shares to a company within the fund’s portfolio.

The Public Investment Fund’s solid financial and investment performance in 2023 resulted in a net profit of 74 billion riyals, with the fund’s net income, including comprehensive income, reaching 138 billion riyals. The year also saw the Fund bolster its strategy to diversify funding sources through debt instruments, raising an additional 45 billion riyals during this period.

Some of the Fund’s portfolio companies secured financing for acquisitions. At the same time, the Fund utilised various sources of financing, including loans and debt instruments, investment profits, capital injections from the government, and transferred government assets.

According to the report, profits after calculating zakat and taxes surged to 64 billion riyals, compared to losses of 17 billion riyals in 2022. General reserves and retained earnings from investments also increased by 21%, reaching 707 billion riyals, compared to 583 billion riyals ($155 billion) in 2022.

Many factors contributed to high profits, revenues and net income. In terms of non-investment activities, the size of the fund’s non-investment portfolio increased by 15%, equivalent to 31 billion riyals, rising from 207 billion riyals in 2022 to 238 billion riyals in 2023, which is attributed to growth in all sectors, especially financial services and communications, noting that the portfolio was somewhat affected. The revenues of the metals and mining sector declined due to the global decline in metal and ore prices after an exceptional rise in 2022.

The fund’s investment portfolio revenues significantly increased compared to last year, totalling 98 billion riyals in 2023, a turnaround from losses of 41 billion riyals recorded in 2022. This improvement was driven by SoftBank’s transformation into a profitable source after experiencing market value losses the previous year.

The Public Investment Fund’s financial results for 2023 underscore its robust financial position and strong investment performance. Moody’s has rated the fund A1 with a positive outlook, while Fitch has assigned it an A+ rating with a stable outlook.