Aamal Company's Financial Results for the Full Year Ended 31 December 2020

Aamal Company Q.P.S.C. (“Aamal”)

Financial Results for the full year ended 31 December 2020

Resilience of diversification strategy mitigates COVID-19 impact on revenues

QAR 1.3bn Total Revenue for 2020 marginally ahead year-on-year

Proposed cash dividend of 4% (QAR 0.04 a share)

Doha, 23 February 2021 – the Board of Directors of Aamal Company Q.P.S.C. (“Aamal”), one of the Gulf region’s leading diversified companies, today announces financial results for the year ended 31 December 2020.

Financial Highlights

• Total revenue up 1% to QAR 1,306.8m (2019: QAR 1,294.1m), driven by increased revenue in our Industrial Manufacturing and Trading and Distribution segments, and demonstrating the resilience of Aamal’s business model in an exceptionally challenging environment
• Gross profit down 21.4% to QAR 341.0m (2019: QAR 434.0m)
• Net profit before share of net profits of associates and joint ventures, accounted for using the equity method and fair value gains/losses on investment properties (“net underlying profit”) down 25.8% to QAR 192.9m (2019: QAR 259.9m)
• Net underlying profit margins decreased by 5.3 percentage points to 14.8% (2020: 20.1%)
• Share of net profits from associates and joint ventures accounted for using the equity method decreased 19.0% to QAR 50.4m (2019: QAR 62.3m)
• Fair value losses on investment properties of QAR 121.6m in 2020. There were no fair value gains or losses on investment properties in 2019
• Total Company net profit¹ down 62.2% to QAR 121.7m (2019: QAR 322.1m), with net profit attributable to Aamal equity holders down 61.7% to QAR 123.3m (2019: QAR 322.3m)
• Reported earnings per share decreased 61.7% to QAR 0.02 (2019: QAR 0.05)
• Net capital expenditure down 11.9% to QAR 42.6m (2019: QAR 48.3m)
• Gearing remains low at 4.20% (2019: 1.06%)

¹ Total Company net profit is before the deduction of net profit attributable to non-controlling interests.

Sheikh Faisal Bin Qassim Al Thani, Chairman of Aamal, commented:

“In the face of unprecedented challenges globally due to the COVID-19 pandemic, I am hugely proud of Aamal Company’s response at every level during 2020.  Our employees responded magnificently to the new ways of working, our subsidiaries played their part in supporting local communities through the pandemic, and our diversified business model again demonstrated its resilience and value to our overall performance, delivering year-on-year revenue growth despite the pandemic.

“Aamal’s financial results for the year, and in particular the performance of our Property segment, were impacted by a drop in property valuations and by our decision to waive rents for tenants at both City Center Doha and Souk Al Harraj.  Despite the financial impact, this was absolutely the right decision to take, one that was driven by our desire to support the economy in these challenging times and, in particular, to support our tenants who we have always regarded as partners.

“Aamal’s financial strength and resilient business model enabled us to continue to perform well at an operational level across our Industrial Manufacturing, Property, and Trading and Distribution segments. Highlights included the completion of the redevelopment work at City Center Doha, the start of production at Senyar Drums Factory (the first specialised cable drum manufacturer in Qatar), investment for a new Glass Reinforced Pipe (GRP) production line at Advanced Pipes and Casts, and the expansion of the Ebn Sina Pharmacy chain.

“I am particularly proud of the performances of Ebn Sina Medical and Aamal Medical, both of which acted promptly and with enormous professionalism to support Qatar’s public healthcare sector in addressing the challenges of the pandemic and a shortage of medical supplies. This is a great example of how the private and public sectors can successfully work together to overcome even the most difficult conditions. Aamal continues to support the community and has been proud to sign an agreement with the Qatar Cancer Society.

“During 2020, the health and safety of our employees, partners and all our stakeholders has, of course, been our absolute priority.On behalf of the Board of Directors, I would like to thank all our employees for their hard work and flexibility which has ensured that, in exceptionally challenging circumstances, the quality of services provided across the Group has remained as high as ever.

“Although the pandemic means that these remain uncertain times, Aamal will continue to capitalize on the opportunities generated by the government’s strategy to prioritize public spending and the many opportunities provided by the Qatar National Vision 2030, leveraging our position as a leading participant across a number of key economic sectors. Aamal’s Board of Directors is pleased to recommend for approval a 2020 cash dividend of 4%. We remain confident in the outlook for Aamal Company and in our ability to deliver for all our stakeholders”.

BREAKDOWN BY SEGMENT

(Notes: there may be differences due to rounding)

REVENUE

QAR m	2020	2019	Change %
Industrial Manufacturing	202.7	169.1	19.8%
Trading and Distribution	907.9	799.6	13.5%
Property	189.2	290.1	(34.8)%
Managed Services	46.7	63.2	(26.0)%
less: inter-divisional revenue	(39.6)	(27.9)	42.0%
TOTAL	1,306.8	1,294.1	1.0%

NET PROFIT

QAR m	2020	2019	Change %
Industrial Manufacturing	32.4	52.6	(38.4)%
Trading and Distribution	120.6	98.9	22.0%
Property	140.5	223.9	(37.3)%
Managed Services	(1.7)	5.7	(129.6)%
less: Head Office costs	(48.5)	(59.0)	17.8%
Total net profit before Fair Value loss	243.3	322.1	(24.5)%
Fair value loss on investment properties	(121.6)	-	(100)%
Total net profit	121.7	322.1	(62.2)%

SEGMENTAL REVIEW

(Note: There may be differences due to rounding)

INDUSTRIAL MANUFACTURING

QAR m	2020	2019	Change %
Revenue	202.7	169.1	19.8%
Net profit - fully consolidated activities	(11.4)	(1.5)	(673.5)%
Net underlying profit margin %