Financial results for the full year ended 31 December 2013
For release 20 February 2014
Aamal Company QSC (“Aamal”)
Financial Results for the full year ended 31 December 2013
Strong trading performance: net underlying profit up 13.4%
Driven by both revenue growth and margin expansion
Doha, 20 February 2014 – the Board of Directors of Aamal Company QSC (“Aamal”), one of the GCC’s fastest growing diversified companies, today announces the financial results for the year ended 31 December 2013.
Financial Highlights
- Group revenue1 up 2.6% to QAR 2,122.6m (2012: QAR 2,069.3m)
- Net underlying profit (ie. before fair value gains on investment properties) increased 13.4% to QAR 267.2m (2012: QAR 235.7m)
- Net underlying profit margins of 12.6% (2012: 11.4%)
- Fair value gains on investment properties of QAR 245.1m (2012: QAR 388.8m)
- Net profit (after fair value gains on investment properties) decreased 18.0% to QAR 512.3m (2012: QAR 624.5m)
- Adjusted2 underlying earnings per share increased 27.0% to QAR 0.44 (2012: QAR 0.34)
- Reported2 earnings per share decreased 14.1% to QAR 0.85 (2012: QAR 0.993)
- Gross investment in capital expenditure fell by 34.8% to QAR 157.6m (2012: QAR 241.8m), driven by the completion during the year of Phase 1 of the City Center Doha expansion project and the Advanced Pipes and Cast Company plant
- Financial gearing4 reduced to 6.6% (31 December 2012: 9.8%)
1 Under IFRS 11, Aamal has reclassified its investment in El Sewedy Cables Qatar (part of the Senyar Industries JV) from a jointly controlled entity to a joint venture; as such, this effective 27.5% ownership interest is now accounted for under the equity rather than the proportionate consolidation method and 2012 figures have been restated accordingly (where relevant)
2 Adjusted underlying earnings per share excludes the fair value gains on investment properties; Reported earnings per share includes them
3 In April 2013, Aamal issued and capitalised bonus shares so FY 2012 EPS has been adjusted accordingly (Company share capital increased to QAR 6.0bn from QAR 5.4bn)
4 Net debt to net debt plus equity
H.E. Sheikh Faisal Bin Qassim Al Thani, Chairman of Aamal Company QSC, commented:
“2013 has been another strong year for Aamal Company. We have managed to grow both revenues and expand margins, thereby improving the overall quality of earnings. Underlying net profit, excluding the uplift from the fair value gains on investment properties, grew by over 13% to QAR 267.2m and earnings per share on this basis increased by 27.0%. This is a very impressive performance and testimony to the solid foundations we have put in place to share in, and contribute to, the rapid growth that Qatar is experiencing as it transforms itself into a modern, diversified and industrial economy.
“There were a number of highlights during the year I would like to mention specifically. First was the completion of Phase 1 of the redevelopment of City Center Doha in order to maintain its status as the pre-eminent shopping mall in the country. We have now begun work to obtain the necessary consents to begin Phase 2 of the renovation.
“Second was the completion of the construction of the Advanced Pipes and Casts Company plant at Mesaieed, a state of the art 85,000m2 facility.
“Thirdly, we signed an agreement with Vivantes International Medicine, the biggest hospital group in Germany, to build an outpatient centre in Doha.
“The developments that I have just described are examples of how Aamal is not content to just sit on its laurels but is continually looking to build on its already strong market positions and identify new opportunities to move into. Because of this dynamism combined with the scale and diversification across the Qatari economic spectrum that Aamal enjoys, I feel both very confident and genuinely excited about the outlook for the Company.”
BREAKDOWN BY DIVISION
(nb. there may be slight differences due to rounding)
REVENUE
|
QAR m |
2013 |
2012 |
Change % |
|
Industrial Manufacturing |
1,261.2 |
1,291.1 |
(2.3)% |
|
Trading and Distribution |
585.8 |
533.6 |
9.8% |
|
Property |
261.6 |
234.3 |
11.7% |
|
Managed Services |
86.3 |
84.6 |
1.9% |
|
less: inter-divisional revenue |
(72.2) |
(74.2) |
|
|
TOTAL |
2,122.7 |
2,069.4 |
2.6% |
NET PROFIT
|
QAR m |
2013 |
2012 |
Change % |
|
Industrial Manufacturing |
22.6 |
56.7 |
(60.1)% |
|
Trading and Distribution |
86.5 |
54.4 |
59.0% |
|
Property (ex-fair value gains on investment properties) |
200.8 |
181.8 |
10.4% |
|
Fair value gains on investment properties |
245.1 |
388.8 |
(37.0)% |
|
Managed Services |
5.2 |
7.4 |
(30.6)% |
|
less: Head Office costs |
(47.9) |
(64.6) |
|
|
TOTAL |
512.3 |
624.5 |
(18.0)% |
DIVISIONAL REVIEW
(nb. there may be slight differences due to rounding)
INDUSTRIAL MANUFACTURING
|
QAR m |
2013 |
2012 |
Change % |
|
Revenue |
1,261.2 |
1,291.1 |
(2.3)% |
|
Net profit |
22.6 |
56.7 |
(60.1)% |
|
Net profit margin % |
1.8% |
4.4% |
(260) bp |
Overall revenue were marginally down at the Industrial Manufacturing division with a fall of 2.3%. Drilling down to the individual business lines, sales at Senyar Industries which makes up over 80% of the division’s total revenue were largely flat growing by just under 2%; however, alternative sales channels to neighbouring countries in the GCC and East Africa have started to be opened up, and we are also planning to expand into Central Asia.
More than offsetting this increase in sales at Senyar Industries however, was a drop in sales at Ci-San Trading. Gulf Rocks, Ci-San’s sole trading entity, has now successfully obtained the necessary ISO 9001:2008 Certification to comply with the newly introduced import quality restrictions, and is also planning to increase its storage capacity of gabbro aggregates; as a consequence, we expect a recovery in sales from hereon.
Margins for the division fell to 1.8% from 4.4% a year previously driven principally by the delay in passing onto end-customers price increases in the cost of raw materials for both Senyar Industries and Ci-San Trading. We are now starting to pass these on and expect to see a recovery in margins.
The construction of the 85,000m2 Advanced Pipes & Cast Company at Mesaieed was completed during the year and we are waiting for the final completion certificate and civil defense inspection before starting commercial production.
TRADING AND DISTRIBUTION
|
QAR m |
2013 |
2012 |
Change % |
|
Revenue |
585.8 |
533.6 |
9.8% |
|
Net profit |
86.5 |
54.4 |
59.0% |
|
Net profit margin % |
14.8% |
10.2% |
460 bp |
Revenues for the Trading and Distribution division rose by almost 10% to QAR 585.8m year-on-year with the net margin increasing by 460 basis points to 14.8%.
Strong performances from Ebn Sina Medical and Aamal Trading drove the growth in revenue with sales increases of 15.9% and 11.8% respectively. Ebn Sina Medical is the leading pharmaceutical distribution company in Qatar and alongside continued expansion of the underlying market, has augmented its market position further by the signing of new exclusive supply agreements with four leading multinational pharmaceutical companies and increasing breadth and penetration of our distribution channels. An increased product range, improved after sales service and an enlarged distribution network have underpinned Aamal Trading’s sales growth.
The large rise in the net profit margin to 14.8% is attributable to rises in profitability at Aamal Trading, Ebn Sina Medical and Aamal Medical. The rises in profitability reflect the increase in sales in the case of Aamal Trading and Ebn Sina Medical, and a superior sales mix for all three business lines.
During the year, a new business unit, Al Farazdaq Company, was established. This unit will provide printing solutions and trade in various office supplies products, whilst also being the sole agent of Gettco Office Supplies.
PROPERTY
|
QAR m |
2013 |
2012 |
Change % |
|
Revenue |
261.6 |
234.3 |
11.7% |
|
Net profit* |
200.8 |
181.8 |
10.4% |
|
Net profit margin % |
76.8% |
77.6% |
(80) bp |
* before fair value gains on investment properties
Total revenue for the Property division rose by almost 12%, to a great extent a reflection of the recent Phase 1 expansion and renovation of the City Center Doha shopping mall. Net profit margins were held largely stable at 76.8% (2012: 77.6%).
Fair value gains on investment properties for the year were QAR 245.1m (2012: QAR 388.8m). This was a smaller incremental amount than the significant valuation uplift that occurred in 2012 that incorporated the then on-going Phase 1 of the City Center Doha redevelopment and which is now completed.
Work has now begun to obtain the necessary permissions for Phase 2 of the redevelopment of City Center Doha.
MANAGED SERVICES
|
QAR m |
2013 |
2012 |
Change % |
|
Revenue |
86.3 |
84.6 |
1.9% |
|
Net profit |
5.2 |
7.4 |
(3.3)% |
|
Net profit margin % |
6.0% |
8.7% |
(270) bp |
The Managed Services division recorded a small rise in turnover at 1.9% but margins suffered compression due to the continuing highly competitive environment, particularly within Aamal Services.
SUMMARY AND OUTLOOK
H.E. Sheikh Mohamed Bin Faisal Al Thani, Vice-Chairman of Aamal, commented:
“2013 has seen Aamal Company continue to grow, both consolidating its existing leading market positions and moving into new areas. This combination of scale and diversification is the Company’s greatest strength. Aamal is one of the few Qatari companies with such a business model, which enables it to benefit from opportunities across the economic spectrum, and so to offer direct and balanced exposure to Qatari growth. Alongside this, Aamal has a proven track record of financial and operating performance, with a clear focus on returns and cost control.”
Tarek M. El Sayed, Managing Director of Aamal, commented:
“The Qatari economy is a hydrocarbon economy based on strong fundamentals. As it seeks to industrialise and diversify through a number of ambitious but wholly realistic initiatives and programmes, a wealth of opportunities are being afforded to those who cannot only identify them, but also have the resources to capitalise on them. Aamal is such a player. It has strong market positions across the economy, allied with both the necessary acumen and financial resources.
“We believe that Aamal’s strong performance this year is testimony to this powerful model and we look forward to the Company going from strength to strength.”
Further enquiries:
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Overview of Aamal
Aamal Company is one of the GCC’s fastest growing diversified conglomerates, delivering a compound annual growth rate in net profit before fair value gains on investment properties in excess of 15% from 2006-2013 and generating revenues of QAR 2,123m (US $583m) in 2013.Focused on sustained, profitable growth and strongly diversified for balanced exposure across Qatar’s rapidly growing economy, Aamal’s operations comprise 23 business units with market leading positions in the key industrial, retail, property, managed services and medical equipment and pharmaceutical sectors. Aamal is one of the largest diversified companies quoted on the Qatar Exchange, having been listed since December 2007.
For further information on Aamal Company, please refer to the corporate website: http://www.aamal.com.qa
End of Release
