Bahrain’s sovereign wealth fund Mumtalakat, has returned to profitability in 2013 having cut costs at the troubled airline Gulf Air.

The airline is one of Mumtalakat’s 38 portfolio companies and has been subject to an extensive cost-cutting strategy, which it launched at the beginning of 2013.

Mumtalakat announced a net profit of BD82.7m ($219m) for the full year 2013, which compares to a net loss of BD181.7m in 2012.

Gulf Air’s net loss after one-time restructuring costs, impairments and government grants declined to BD12m in 2013 from BD81.5m in 2012.

Efforts to restructure the historically loss-making airline managed to cut direct costs by 11.5 per cent in 2013 to reach BD988m. Measures taken included the cutting of unprofitable routes, reducing staff and aircraft fleets.

Yet, the restructuring did flatten the group’s overall revenues, which fell by 5.6 per cent in 2013 compared to the previous year to reach BD1.1bn.

Other companies in Mumtalakat’s portfolio performed positively in 2013. Aluminium Bahrain saw its revenues reach BD749.3m.

Contribution to overall profits from Mumtalakat’s principal associate companies Bahrain Telecommunications Company and the National Bank of Bahrain also increased, with each entity contributing BD15.4m and BD24.7m respectively.