Ithmaar Holding B.S.C., a prominent investment firm registered in the United Arab Emirates and listed on the Bahrain Bourse and Dubai Financial Market, is currently navigating through significant financial challenges. The company's latest financial statement for Q3 2024 reveals accumulated losses amounting to USD 837.65 million, equating to an alarming 111% of its paid-up capital.

The roots of these financial difficulties trace back to December 2016, when accumulated losses reached 68.8%, primarily due to impairment provisions from non-core investments impacted by financial crises. In 2018, the early adoption of FAS30, the AAOIFI equivalent of IFRS9, further exacerbated these losses, pushing the percentage to 98%.

The economic repercussions of the COVID-19 pandemic in 2020 added USD 87.5 million to the accumulated losses. Although there was a slight recovery in 2021 with a USD 35 million decrease due to net income, the following years saw losses increase again, with USD 29.9 million in 2022 and USD 9.3 million in 2023. However, 2024 has shown a minor improvement with a USD 0.4 million decrease in losses, attributed to net profits.

The Board of Directors at Ithmaar Holding is actively working on initiatives to mitigate these financial challenges. Key strategies include an asset sale and restructuring plan aimed at bolstering the company's capital and strengthening its consolidated equity. These efforts are crucial as the company seeks to comply with regulatory requirements for firms with substantial accumulated losses.

For investors, the current financial situation of Ithmaar Holding presents a complex picture. While the company's proactive steps to address its financial issues are commendable, the significant accumulated losses pose a considerable risk. Therefore, a cautious approach is advisable. Investors should closely monitor the company's progress in implementing its restructuring plans and any subsequent financial performance improvements.

In conclusion, given the current financial instability and ongoing restructuring efforts, a hold recommendation is suggested for Ithmaar Holding. This approach allows investors to await further developments and assess the company's financial recovery trajectory.