Financial Results for the full year ended 31 December 2015

Aamal Company QSC (“Aamal”)

Financial Results for the full year ended 31 December 2015

Underlying profit up 49.6%

Excellent performance driven by revenue growth and margin expansion

Doha, 15 February 2016 – 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 2015.

Financial Highlights

• Group revenue up 34.7% to QAR 2,882.0m (2014: QAR 2,139.1m)
•  Gross profit up 26.9% to QAR 642.1m (2014: QAR 506.0m)
• Net profit before fair value gains on investment properties (“underlying profit”) increased 49.6% to QAR 521.3m (2014: QAR 348.5m)
• Fair value gains on investment properties of QAR 135.4m (2014: QAR 251.7m)
• Total net profit¹ increased 9.4% to QAR 656.7m (2014: QAR 600.2m)
• Reported earnings per share increased 4.1% to QAR 0.95 (2014: QAR 0.92²)
• Gross capital expenditure rose by 22.1% to QAR 113.4m (2014: QAR 92.9m), reflecting the purchase of a sea-faring bulk carrier for a new Aamal subsidiary and commencement of Phase 2 of the redevelopment of the City Center Doha shopping mall
• Financial gearing³ reduced to 3.8% (31 December 2014: 4.5%)

¹ After fair value gains on investment properties but before the deduction of non-controlling interests

² In March 2015, Aamal issued and capitalised bonus shares so FY 2014 EPS has been adjusted accordingly (Company share capital increased to QAR 6.3bn from QAR 6.0bn)

³ Net debt to net debt plus equity

H.E. Sheikh Faisal Bin Qassim Al Thani, Chairman of Aamal Company QSC, commented:

“Aamal has delivered an exceptional performance in 2015; revenue has grown by almost 35% which when combined with an expansion in the underlying margin, has led to net profit before fair value gains on investment properties rising by almost 50%.

“Beyond what is clearly an excellent set of numbers, is a clear strategy that has allowed us to achieve sustained growth by optimising existing business operations and create new revenue streams. These results demonstrate clearly the resilience of our business model - diversified not just to minimise risk but also positioned to take advantage of structural growth opportunities. This bodes very well for the Company’s future prosperity.”

BREAKDOWN BY DIVISION

(nb. there may be slight differences due to rounding)

REVENUE

QAR m	2015	2014	Change %
Industrial Manufacturing	1,752.2	1,134.2	54.5%
Trading and Distribution	779.4	728.8	6.9%
Property	325.7	288.8	12.8%
Managed Services	68.5	64.2	6.7%
less: inter-divisional revenue	(43.8)	(76.8)	(42.9)%
TOTAL	2,882.0	2,139.1	34.7%

NET PROFIT

QAR m	2015	2014	Change %
Industrial Manufacturing	126.4	51.7	144.5%
Trading and Distribution	147.2	114.9	28.1%
Property*	268.7	223.3	20.3%
Fair value gains on investment properties	135.4	251.7	(46.2)%
Managed Services	5.5	8.3	(33.7)%
less: Head Office costs	(26.5)	(49.7)	46.7%
TOTAL	656.7	600.2	9.4%

*before fair value gains on investment properties

DIVISIONAL REVIEW

(nb. there may be slight differences due to rounding)

INDUSTRIAL MANUFACTURING

QAR m	2015	2014	Change %
Revenue	1,752.2	1,134.2	54.5%
Net profit: fully consolidated activities	84.0	33.6	150.0%
Net underlying profit margin %	4.8%	3.0%	+1.8 ppts
Net profit: share of equity accounted for investee net profits	42.4	18.1	134.2%
Total net profit	126.4	51.7	144.5%

Net profit for the Industrial Manufacturing division rose by 144.5% to QAR 126.4 million, driven by significant revenue growth of over 50% and significant margin expansion to 4.8%, previously 3.0%.

The stand-out performer over the year was Senyar Industries, Doha Cables in particular, winning a number of high profile and profitable contracts as infrastructure project build in Qatar continued apace.

Strong performances were also put in by Aamal Readymix and Ci-San, both also beneficiaries of this continuing investment in infrastructure. Aamal Readymix, focusing on the supply of high grade concrete, far exceeded its production targets and we were honored to receive the "GCC 2015 Annual Business Excellence Award” as a best supplier from one of the leading projects in Qatar in recognition of exceptional service and quality.

Ci-San was bolstered further by the setting-up of a new subsidiary (Aamal Maritime for Transportation Services) in September 2015 to ship consignments of aggregates to Qatar.

TRADING AND DISTRIBUTION 

QAR m	2015	2014	Change %
Revenue	779.4	728.8	6.9%
Net profit	147.2	114.9	28.1%
Net profit margin %	18.9%	15.8%	+3.1 ppts

Net profit for the Trading and Distribution division rose by 28.1% to QAR 147.2m, principally due to a 3.1 percentage point improvement in the net margin to 18.9%.

The principal factors behind this significant margin expansion were an expanding product line to fulfil growing market demands alongside the wider geographical coverage of our distribution footprint.

PROPERTY

QAR m	2015	2014	Change %
Revenue	325.7	288.8	12.8%
Net profit*	268.7	223.3	20.3%
Net profit margin %	82.5%	77.3%	+5.2 ppts

*before fair value gains on investment properties

Underlying net profit for the Property division (ie. excluding fair value gains on investment properties) rose by 20.3% to QAR 268.7 million year on year, due to a combination of revenue growth of almost 13% year on year and significant expansion in the margin to 82.5% (2014: 77.3%).

This very strong performance was driven by annual rental increases throughout the year, combined with benefits that still continue to accrue from Phase 1 of the redevelopment of the flagship City Center Doha shopping mall.

Fair value gains on investment properties for the year were down at QAR 135.4 million (2014: QAR 251.7m), in line with the hiatus in the redevelopment of City Center Doha (Phase 1 completed end-2013; Phase 2 permission received December 2015, expected completion date of 2018).

MANAGED SERVICES

QAR m	2015	2014	Change %
Revenue	68.5	64.2	6.7%
Net profit	5.5	8.3	(33.7)%
Net profit margin %	8.0%