Financial Results for the full year ended 31 December 2021
For release -23 February 2022
Aamal Company Q.P.S.C. (“Aamal”)
Financial Results for the full year ended 31 December 2021
A strong performance across all business segments
Revenue and net profit growth of 22% and 156.3%, respectively
Proposed cash dividend of 5% (QAR 0.05 a share)
Doha, 23 February 2022 – 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 2021.
Financial Highlights
- Total revenue up 22.0% to QAR 1,594.1m (2020: QAR 1,306.8m)
- Gross profit up 24.8% to QAR 425.5m (2020: QAR 341.0m)
- Net profit before share of net profits of associates and joint ventures1 and fair value gains/losses on investment properties (“net underlying profit”) up 40.8% to QAR 271.5m (2020: QAR 192.9m)
- Net underlying profit margins increased by 2.3 percentage points to 17.0% (2020: 14.8%)
- Share of net profits from associates and joint ventures accounted for using the equity method decreased 19.7% to QAR 40.5m (2020: QAR 50.4m)
- There were no fair value gains or losses on investment properties in 2021. There were fair value losses on investment properties of QAR 121.6m in 2020
- Total Company net profit2 up 156.3% to QAR 312.0m (2020: QAR 121.7m), with net profit attributable to Aamal equity holders up 147.3% to QAR 304.9m (2020: QAR 123.3m)
- Reported earnings per share increased 147.3% to QAR 0.05 (2020: QAR 0.02)
- Net capital expenditure up 56.4% to QAR 66.6m (2020: QAR 42.6m)
- Gearing remains low at 4.54% (2020: 4.20%)
1 Net profit before share of net profits of associates and joint ventures accounted for using the equity method
2 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:
“After the considerable challenges of 2020, the Board of Aamal is pleased to report a strong set of financial results for 2021. Underpinned by Aamal’s clear strategy, sustained financial strength, disciplined cost control, and resilient and diversified business model, all four of our business segments performed well at an operational level and demonstrated the Company’s ongoing ability to seize new opportunities as they arise and to adapt swiftly to evolving market demands.
Our Industrial Manufacturing subsidiaries performed very well (particularly Ci-San Trading), introducing new products, expanding production and growing the customer base. The results reported by our Trading and Distribution segment were impressive, although marginally down compared to the exceptionally strong performance recorded by the segment in 2020 when demand peaked for healthcare and pharmaceutical products and services in response to the pandemic. It is worth noting that revenue and net profit for this segment are up 10% and 6%, respectively, versus 2019. Demonstrating our commitment to innovation and operational excellence, 2021 saw a strong focus on digitalisation, particularly at Ebn Sina Medical and Aamal Medical. This innovative digitalisation has enhanced internal operations and expanded the segment’s range of IT services and products.
The Property segment’s performance reflects the opening of 50 new shops at City Center Doha, the benefit of renovation works, improved occupancy rates at Aamal Real Estate, and the elimination of negative fair value adjustments made in 2020 at the height of the pandemic restrictions. Finally, our Managed Services segment benefitted from the gradual easing of Covid-related restrictions in 2021 after the near complete closure of its operations in 2020. A particularly strong performance was recorded by Aamal Services following the award of a major contract to provide World Cup-related transportation services.
Throughout the year, we maintained our commitment to corporate governance best practice and continued to incorporate environmental, social and governance considerations at the heart of our operations. For example, Doha Cables has started supplying lead-free cables to replace the more hazardous and expensive lead sheath cables currently used, and we launched a new website which is fully accessible to all users regardless of any disability. Our partnership with the Olympic Committee to support Qatar’s Olympic Team further reflects Aamal’s ongoing commitment to our community.
Aamal’s Board of Directors is pleased to recommend a 2021 cash dividend of 5% (QAR 0.05 a share) for approval at Aamal’s Annual General Assembly Meeting which will take place on 28 March 2021.
I am proud of the contribution that Aamal has made over the years to the sustained development of the Qatari economy and I am excited by the opportunities for growth as we look to 2022 and beyond. The FIFA World Cup will this year provide a significant economic boost to both Qatar and Aamal and, together with the opportunities generated by the Qatar National Vision 2030, and under the wise leadership of our government, we expect increasing international recognition of Qatar as an attractive place to invest. These are exciting times for our country and for Aamal as we strive to continue to deliver value for all our stakeholders and shareholders.”
BREAKDOWN BY SEGMENT
(Notes: there may be differences due to rounding)
REVENUE
|
QAR m |
2021 |
2020 |
Change % |
|
Industrial Manufacturing |
431.7 |
202.7 |
113.0% |
|
Trading and Distribution |
878.5 |
907.9 |
(3.2%) |
|
Property |
262.6 |
189.2 |
38.8% |
|
Managed Services |
67.7 |
46.7 |
45.0% |
|
less: inter-divisional revenue |
(46.5) |
(39.6) |
(17.5%) |
|
TOTAL |
1,594.1 |
1,306.8 |
22.0% |
NET PROFIT
|
QAR m |
2021 |
2020 |
Change % |
|
Industrial Manufacturing |
56.6 |
32.4 |
74.7% |
|
Trading and Distribution |
105.0 |
120.6 |
(12.9%) |
|
Property |
197.6 |
140.5 |
40.7% |
|
Managed Services |
6.1 |
(1.7) |
458.8% |
|
less: Head Office costs |
(53.4) |
(48.5) |
(9.9%) |
|
Total net profit before Fair Value loss |
312.0 |
243.3 |
28.2% |
|
Fair value loss on investment properties |
- |
(121.6) |
100.0% |
|
Total net profit |
312.0 |
121.7 |
156.3% |
SEGMENTAL REVIEW
(Note: There may be slight differences due to rounding)
INDUSTRIAL MANUFACTURING
|
QAR m |
2021 |
2020 |
Change % |
|
Revenue |
431.7 |
202.7 |
113.0% |
|
Net profit - fully consolidated activities |
24.4 |
(11.4) |
313.4% |
|
Net underlying profit margin % |
5.7% |
(5.6)% |
11.3 ppts |
|
Share of net profit of associates and joint ventures accounted for using the equity method |
32.2 |
43.9 |
(26.5%) |
|
Total net profit |
56.6 |
32.4 |
74.7% |
Industrial Manufacturing revenue increased 113.0% year-on-year to QAR 431.7 million, while net profit increased 74.7% to QAR 56.6 million. This positive performance reflects the subsidiary’s success in launching new products, expanding production capacity, and further developing its client base.
Doha Cables had a particularly successful year. As well as being awarded several contracts to supply cabling (including successfully supplying the first order of power cables with aluminium conductors manufactured in Qatar), Doha Cables enlarged its regional customer base. Additionally, in line with Doha Cables’ environmental awareness efforts and in recognition of its role in supporting the sustainable development of Qatar, Doha Cables has started supplying lead-free cables.
While Aamal Readymix continued to face pandemic-related challenges which impacted its 2021 production target and intense price competition impacted profit margins, Aamal Readymix nevertheless increased production by 3% year-on-year. It supplied high-quality concrete for several major projects and, amidst growing demand in the latter part of 2021, installed a third production plant to further enhance capacity.
Aamal Cement Industries’ addition of radius curb stone to its product portfolio was a significant development for the subsidiary and it remains the sole supplier to all major projects. It was also a strong year for Ci-San Trading, as Gulf Rocks reported increased demand for gabbro which, supported by Gulf Rocks’ diversification into steel, sand and cement, saw revenue increase 28.4% year-on-year. Aamal Maritime Transportation Services performed exceptionally well and reported revenue growth of 217.9% year-on-year, thanks to increased market demand and full capacity utilization. The renovation of the Al Rayyan vessel is now complete to last for the next five years.
Frijns Steel successfully completed the expansion of its Mesaieed facility, which will significantly increase production capacity to more than 20,000 tons per year, and developed its aluminium, stainless-steel, cladding and roofing divisions through the adoption of state-of-the-art, quality-enhancing equipment
The Industrial Manufacturing segment continues to face strong competition which, coupled with higher raw material prices and restrictions on the availability of some raw materials, is driving up costs. That said, the outlook for 2022 remains positive. The Qatari government has allocated QAR 74 billion for major projects in 2022 which will benefit several of Aamal’s Industrial Manufacturing subsidiaries, including Aamal Readymix which has a strong project pipeline for 2022. Furthermore, there is an imperative to accelerate the completion of existing construction projects ahead of the FIFA World Cup.
TRADING AND DISTRIBUTION
|
QAR m |
2021 |
2020 |
Change % |
|
Revenue |
878.5 |
907.9 |
(3.2%) |
|
Net profit |
105.0 |
120.6 |
(12.9%) |
|
Net profit margin % |
12.0% |
13.3% |
(1.3 ppts) |
Revenue in the Trading and Distribution segment decreased by 3.2% year-on-year to QAR 878.5 million, while net profit decreased 12.9% year-on-year to QAR 105.0 million. This performance reflects the particularly strong performance recorded by the segment in 2020 when the pandemic saw demand peak for healthcare and pharmaceutical products and services amidst the pandemic. It is worth noting that revenue and net profit are up 10% and 6%, respectively, versus 2019.
Throughout 2021, Aamal Medical focused on developing its healthcare technology offering. Accordingly, it expanded its portfolio through the addition of new vendors in emergency medical services, and won a major contract to implement a hospital information system. Aamal Medical is also playing a key role in sourcing and providing critical medical equipment (such as defibrillators) which is expected to be used during the 2022 FIFA World Cup.
There is significant market opportunity in building healthcare information solutions, particularly in the areas of oncology, laboratory, women’s health and surgery. As such, Aamal Medical is currently reviewing its business strategy to ensure such growth opportunities are successfully captured and will look to enhance its capabilities and capacity accordingly.
Aamal Trading and Distribution continued to face strong competition in 2021, as well as ongoing pandemic-related challenges. In response, it introduced two new brands of tyres (including ‘Davanti’), increased its focus on its consumer (rather than commercial) business and took steps to expand its retail footprint. In 2022, Aamal Trading and Distribution expects to grow its client base through new contract wins, expand its retail footprint, and add more business units focused on the automotive industry.
It has been a year of development for Ebn Sina Medical which has digitalised and automated the warehouse supply process, as well as adopting new software across all its pharmacies to improve communication and efficiencies between them. Ebn Sina Pharmacy opened a fourth pharmacy in Msheireb Downtown (strategically located in the heart of Doha).
PROPERTY
|
QAR m |
2021 |
2020 |
Change % |
|
Revenue |
262.6 |
189.2 |
38.8% |
|
Net profit - fully consolidated activities before fair values losses on investment properties |
192.3 |
136.7 |
40.6% |
|
Net underlying profit margin % |
73.2% |
72.3% |
1.0 ppts |
|
Share of net profit of associates and joint ventures accounted for using the equity method |
5.3 |
3.8 |
41.3% |
|
Net profit before fair value losses |
197.6 |
140.5 |
40.7% |
|
Fair value losses on investment properties |
- |
(121.6) |
100.0% |
|
Net profit |
197.6 |
18.9 |
945.9% |
Property segment revenue increased 38.8% year-on-year to QAR 262.6 million, while net profit rose 945.9% to QAR 197.6 million, reflecting new shop openings at City Center Doha, improved occupancy rates at Aamal Real Estate, and the elimination of negative fair value adjustments made in 2020 at the height of the pandemic restrictions.
In the fourth quarter of 2021, City Center Doha celebrated its 20th anniversary, rounding off a successful year for the mall. City Center Doha successfully opened more than 50 new shops in 2021 and made significant progress redeveloping the mall’s frontage which is now more than 90% complete and will allow for 6 new food and beverage outlets to be opened.
In 2022, approximately 20 new shops are scheduled to open at City Center Doha and construction will begin of a bridge connecting the second floor of the mall to the metro. The bridge will improve access to the shopping precinct and boost footfall on the second floor in particular. By the end of 2022.
Aamal Real Estate saw the benefits of the renovation work carried out in recent years as occupancy rates increased across the residential and commercial portfolios to 93% and 97%, respectively. Aamal Real Estate expects the FIFA World Cup to drive further momentum in occupancy and rental rates throughout 2022.
MANAGED SERVICES
|
QAR m |
2021 |
2020 |
Change % |
|
Revenue |
67.7 |
46.7 |
45.0% |
|
Net profit - fully consolidated activities |
3.2 |
(4.5) |
170.3% |
|
Net underlying profit margin % |
4.7% |
(9.6%) |
14.3 ppts |
|
Share of net profit of associates and joint ventures accounted for using the equity method |
2.9 |
2.8 |
4.9% |
|
Net profit |
6.1 |
(1.7) |
458.8% |
The Managed Services segment, and Aamal Travel in particular, benefitted from the gradual easing of Covid-related restrictions in 2021 after the near complete closure of its operations in 2020. As a result, revenue and net profit increased by 45.0% and 458.8% year-on-year, respectively.
While Aamal Services continued to feel the effect of staff shortages stemming from the pandemic, the company has been awarded a major contract to provide transportation related services for the FIFA World Cup which will operate until January 2023. This will double the size of Aamal Services’ business and bolster revenues over this period.
Against a backdrop of rising competition, several of the Managed Services businesses have focused on enhancing their competitiveness. Notably, Al Farazdaq is gradually focusing its efforts on packaging and large format printing services, given the shift towards online marketing, although the production and installation of building signage offered a lucrative revenue stream for the business in 2021. Meanwhile, ECCO Gulf broadened its client offering through the addition of two new business support lines (‘Data Cleansing Services’ and ‘Pay Wallet Team Support’) and successfully renewed several major contracts in the banking, government and education sectors.
While Winter Wonderland remained closed, Fun City reopened in June 2021 following the easing of Covid-19 restrictions. Fun City continues to focus on attracting footfall through the addition of new games, the refurbishment of Fun City’s facilities and by offering attractive promotions.
SUMMARY AND OUTLOOK
H.E. Sheikh Mohamed Bin Faisal Al Thani, Chief Executive Officer and Managing Director of Aamal, commented:
“We can be proud of Aamal’s 2021 financial results and performance which reflect our continued ability to leverage the Company’s position as a leading participant across key economic sectors through our focus on high growth areas, diversification, innovation and operational excellence. It was a year that saw revenue and net profit grow by 22.0% and 156.3%, respectively, and Aamal named by Forbes Middle East as one of the ‘30 Most Valuable Companies in Qatar’.
Our Industrial Manufacturing segment saw strong organic growth, successfully introduced high-quality products to the market and expanded capacity to capture new opportunities. In addition to ongoing infrastructure projects, new projects related to the oil and gas sectors, such as the North Field Expansion Project, will create further opportunities in the market.
Our Trading and Distribution segment benefited from significant innovative digitalisation at Aamal Medical and Ebn Sina Medical. For example, Ebn Sina Medical has implemented a digital system (‘Digisal’) to automate the warehouse supply process and has installed a second “robot” at its Msheireb branch, enabling drugs to be dispensed accurately and at high speed. Furthermore, Ebn Sina Medical has adopted new software (‘Rancelab’) across all its pharmacies to improve communication and efficiencies between them.
In the Property segment, we remain focused on maximizing the value of the real estate portfolio through continuous refurbishment and development. In 2022, approximately 20 new shops are scheduled to open at City Center Doha and footfall will be boosted by the construction of a bridge connecting the second floor of the mall to the metro. By the end of 2022, City Center Doha expects to achieve an occupancy rate of 90%. Having benefitted from the easing of Covid-related restrictions in 2021, our Managed Services segment is looking forward with confidence to 2022 and beyond.
While we of course remain alert to the continued challenges of the pandemic, we are confidently optimistic regarding the outlook for 2022. Qatar will welcome the much-awaited FIFA World Cup, a hugely prestigious, global event which will attract a large number of visitors to Qatar who we expect to make good use of Aamal’s many services. Moreover, we are confident that the World Cup will successfully showcase Qatar’s considerable economic stability, advanced infrastructure and ranking as one of the world’s safest countries, attributes which we expect to appeal to international investors and generate further significant opportunities.”
CONFERENCE CALL DETAILS
A conference call to discuss the results will be held on 24 February 2022 at 2.00pm Doha time. The details for the conference call are as follows:
Date: Thursday 24 February 2022
Time: 2.00pm Doha time
Dial-In Numbers:
+16468769923,, 91408738472# US (New York)
+16699006833,, 91408738472# US (San Jose)
+44 208 080 6592 United Kingdom
+44 330 088 5830 United Kingdom
Conference ID:
Meeting ID:
86700097394
Please join the event conference 5-10 minutes prior to the start time.
FURTHER ENQUIRIES
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Aamal Company
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Laura Ackel – Corporate Communications Officer |
E : [email protected] |
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Citigate Dewe Rogerson (IR/PR Advisor)
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Toby Moore
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T: +44 (0)7768 981 763 |
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Laura Banks
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T: +44 (0)7545 942 738
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Lucy Eyles |
T: +44 (0)7525 951 207
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Ramiz Al-Turk (Arabic media)
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T: +974 5014 9201 |
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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 22 February 2022, the Company had a market capitalisation of QAR 7.4bn (US$2.0m).
Aamal’s operations are widely diversified and comprise 28 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.
For further information on Aamal Company, please refer to the corporate website: http://www.aamal.com.qa
