Financial Results for the first quarter ended 31 March 2020
Aamal Company Q.P.S.C. (‘Aamal’)
Financial Results for the first quarter ended 31 March 2020
A robust revenue performance (up 16.3%) in a quarter of unprecedented challenges
Aamal is taking swift and effective action in response to the COVID-19 pandemic
Doha, 28 April 2020 – the Board of Directors of Aamal Company Q.P.S.C. (Aamal), one of the Region’s largest diversified companies, today announces its financial results for the first quarter ended 31 March 2020.
Financial Highlights
- Total revenue up 16.3% to QAR 374m (Q1 2019: 321.7m), driven in particular by Aamal’s Trading and Distribution segment
- Gross profit down 7.4% to QAR 110.7m (Q1 2019: QAR 118.8m)
- Net profit before share of net profits of associates and joint ventures accounted for using the equity method (“net underlying profit”) down 18.5% to QAR 65.2m (Q1 2019: QAR 80.0m)
- Net underlying profit margins have decreased by 7.4 percentage points to 17.5% (Q1 2019: 24.9%)
- Share of net profits from associates and joint ventures accounted for using the equity method decreased 2.4% to QAR 16.8m (Q1 2019: QAR 17.3m)
- There were no fair value gains on investment properties in either Q1 2020 or Q1 2019
- Total Company net profit1 was down 15.7% to QAR 82.1m (Q1 2019: QAR 97.3m), with net profit attributable to Aamal equity holders down 14.5% to QAR 82.5m (Q1 2019: QAR 96.5m)
- Reported earnings per share2 down 14.5% to QAR 0.013 (Q1 2019: QAR 0.015)
- Net capital expenditure increased by QAR 9.0m to QAR 18.1m (Q1 2019 QAR 9.0m) due to ongoing investment in the Property segment
- Gearing remains low at 1.4%
1 Total Company net profit is before the deduction of net profit attributable to non-controlling interests
2Restated to reflect the stock split implemented in June 2019 (a QFMA initiative requiring QSE-listed companies to split each of its shares into 10)
SUMMARY AND OUTLOOK
H.E. Sheikh Faisal Bin Qassim Al Thani, Chairman of Aamal, commented:
“I am pleased to report that despite the negative impact of the COVID-19 pandemic during the first quarter, the resilience of our diversified business model and our continued focus on successfully executing our strategic priorities meant that Aamal was able to deliver robust revenue growth of 16.3% year-on-year. However, the challenges arising from the COVID-19 situation are unprecedented and, coupled with intense market competition, impacted sales margins, resulting in a 15.6% decline in net profit compared to the first quarter of 2019.
“In line with guidance set out by the Qatari authorities, we have moved quickly to put in place social distancing measures across all of Aamal Company. Our absolute priority is protecting the health and well-being of our employees and customers and, to this end, City Center Doha, Souk Al Haraj and the majority of our operations in our Managed Services segment are currently closed. The Qatari government has closed parts of Qatar’s industrial area where some of our Industrial Manufacturing businesses are located, impacting the performance of Aamal Cement Industries and Aamal Readymix in particular. Profit in the segment was further impacted by dual impact of continuing price competition seen in tendering for contracts in the period and the additional costs incurred in reinstating formerly shuttered manufacturing capacity in line with the contracted volumes.
“Despite the challenges presented by these unprecedented circumstances, we were pleased to record a strong quarterly performance in our Trading and Distribution segment. This was primarily due to Ebn Sina Medical, again demonstrating the resilience and benefits of our diverse business model.
“I would like to take this opportunity to extend my thanks to all Aamal Company’s employees. They are working tirelessly throughout these challenging times and have shown admirable commitment and agility in responding to the new ways of working, while continuing to support our customers at all times. I would also like to thank the Qatari government for their ongoing support and leadership during this crisis.
“Aamal has already proved its ability to adapt effectively and with agility to external change. I am confident in Aamal Company’s long-term strategy and in our capability to adapt quickly in these difficult times, supported by the strength of our balance sheet and the resilience of our operations which remain a robust platform for future growth.”
H.E. Sheikh Mohamed Bin Faisal Al Thani, Chief Executive Officer and Managing Director of Aamal, commented:
“The global nature of the COVID-19 pandemic, and the uncertainty around its severity and duration, mean that we expect to feel its impact throughout the second quarter and beyond.
“The safeguarding and wellbeing of our employees and all our stakeholders remains our primary focus. Aamal’s advanced IT infrastructure has enabled our employees to transition smoothly to remote working as we continue to support the Qatari government’s social distancing efforts. Meanwhile, we have taken action across Aamal Company to respond swiftly to the crisis with many of our businesses launching innovative new services to benefit Qatar in these challenging times.
“Ebn Sina Medical and Aamal Medical, supported by the COVID-19 Supreme Committee for Crisis Management agreed to facilitate the home delivery of medicine. Ebn Sina Pharmacies implemented a new mobile application (‘Rimads’) created by the Carnegie Mellon University in Qatar to arrange the home delivery of Medicine and they have also received approval from the Ministry of Health to use its warehouse delivery vans as ‘mobile pharmacies’ in case of complete lockdown for the delivery of medicines to homes.
We are pleased to report that both businesses overcame challenges in receiving shipments from countries in lockdown and have successfully secured local stocks of medicines and essential life-saving medical equipment, as well as baby milk and safety items such as face masks and hand sanitizers.”
“There have been similar, important initiatives across our businesses. For example, Aamal Services has launched a disinfectant business while Al Farazdaq has introduced a new product made from PVC that can be used by industrial companies to protect their staff.
“Looking ahead, while the precise impact of the current crisis remains uncertain, our strong balance sheet, low gearing and significant liquidity, together with the operational resilience and diversification of our businesses, position us well to navigate through the crisis, to emerge with strength and to return to growth post-COVID-19.”
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FURTHER ENQUIRIES
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Mira Al Ahmad – Senior Corporate Communications Officer |
T: +974 3366 9640) |
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Laura Ackel – Corporate Communications Officer |
T: +974 6671 6576) |
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Citigate Dewe Rogerson (IR/PR Advisor) |
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Lucy Eyles |
T: +44 (0)7525 951 207) |
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Andrew Hey |
T: +44 (0)7903 028 448) |
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Toby Moore |
T: +44 (0)7768 981 763) |
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Ramiz Al-Turk (Arabic media) |
E: +974 5014 9201 |
ABOUT AAMAL COMPANY Q.P.S.C.
Aamal is one of the Gulf region’s most diversified conglomerates and has been listed on the Qatar Stock Exchange since December 2007. As at 27April 2020, the Company had a market capitalisation of QAR3.42bn (US$ 939.8mn).
Aamal’s operations are widely diversified and comprise 26 active business units (subsidiaries and joint ventures) with market leading positions in the key industrial, retail, property, managed services, and medical equipment and pharmaceutical sectors, thereby offering investors a high quality and balanced exposure to Qatar’s wider economic growth and development. Aamal is focused on self-financed and profitable growth, delivering an average increase in underlying profits in excess of 1.22% (i.e. before fair value gains on investment properties) over the thirteen years to end-2019.
For further information on Aamal Company, please refer to the corporate website: http://www.aamal.com.qa
