Financial Results for the six months ended 30 June 2018

Aamal Company Q.P.S.C. (‘Aamal’)

Financial Results for the six months ended 30 June 2018

Aamal shows resilience, continuing to deliver and be well-positioned in a challenging environment

Net profit attributable to equity holders: QAR 228.9million

Doha, 30 July 2018 – the Board of Directors of Aamal Company Q.P.S.C. (Aamal), one of the Gulf Region’s fastest growing diversified companies, today announces its financial results for the six months ended 30 June 2018.

Financial Highlights

• Group revenue down 33.0% to QAR 652.7m (H1 2017: QAR 974.5m), primarily due to the reclassification of two business entities within the Industrial Manufacturing segment from subsidiaries to joint ventures from 1 April 2017, with a consequent change in their accounting presentation

 

• Gross profit down 20.6% to QAR 243.2m (H1 2017: QAR 306.2m)

   

• Net profit before share in results of associates and joint ventures accounted for using the equity method (“net underlying profit”) down 27.0% to QAR 176.2m (H1 2017: QAR 241.5m)

   

• Net underlying profit margins have increased by 2.2 percentage points to 27.0% (H1 2017: 24.8%)

   

• Share in results of associates and joint ventures accounted for using the equity method more than doubled to QAR 53.9m (H1 2017: QAR 25.0m)

   

• Total Company net profit¹ down 13.7% to QAR 230.1m (H1 2017: QAR 266.6m)

   

• Reported earnings per share down QAR 0.02 to QAR 0.36 (H1 2017: QAR 0.38)

   

• Net investment in capital expenditure increased by QAR 168m to QAR 218.8m (H1 2017 QAR 50.8m), reflecting enhancements to the Company’s real estate portfolio through the acquisition of a number of prime residential assets

 

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

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

“While it has been a challenging first half of the year due to the ongoing Qatar border blockade, I am pleased to report a highly respectable set of results, yet again demonstrating the resilience of Aamal’s diverse business model.

“It is important to note that as highlighted in previous quarters, the reported year-on-year declines do not accurately reflect the financial reality of Aamal’s performance. These numbers are not like-for-like comparatives due to a change in the accounting presentation of two subsidiaries within our Industrial Manufacturing division which were reclassified as joint ventures. This means they are no longer consolidated on a line-by-line basis, but instead through the equity method. 

“We have also devoted considerable time and effort to further enhancing our corporate governance mechanisms, so ensuring that Aamal’s leadership will continue to drive and deliver long-term excellence. We have now finalized the restructuring of our Board with key changes including the addition of three independent directors. I am confident that the breadth and depth of experience provided by these individuals’ positions the Board extremely well to lead the Company forward.

 

BREAKDOWN BY DIVISION

(N.B. there may be slight differences due to rounding)

•  REVENUE

QAR m	H1 2018	H1 2017	Change
Industrial Manufacturing	119.1	477.3	(75.0%)
Trading and Distribution	353.5	308.9	14.4%
Property	149.4	153.6	(2.7%)
Managed Services	48.1	48.1	0.1%
Head Office	(17.4)	(13.3)	31.3%
TOTAL	652.7	974.5	(33.0%)

 

 

 

• NET PROFIT

QAR m	H1 2018	H1 2017	Change
Industrial Manufacturing	56.3	72.9	(22.7%)
Trading and Distribution	60.1	59.6	0.8%
Property	122.9	127.1	(3.3%)
Managed Services	4.8	3.1	58.4%
Head Office	(14.1)	3.9	(465.4%)
TOTAL	230.1	266.6	(13.7%)

 

 

DIVISIONAL REVIEW

(N.B. there may be slight differences due to rounding)

•  INDUSTRIAL MANUFACTURING

QAR m	H1 2018	H1 2017	Change
Revenue	119.1	477.3	(75.0%)
Net Profit	56.3	72.9	(22.7%)
Made up of:
Net profit: fully consolidated activities	4.9	50.8	(90.3%)
Net profit: share in results of equity accounted investees	51.4	22.1	132.6%
Net underlying profit margin: (i.e. excluding share in results of equity accounted investees)	4.1%	10.7%	(6.6 ppts)

 

Overall, revenues for Industrial Manufacturing fell by 75.0% and overall net profit by 22.7%. This is largely attributable to the changes in accounting treatment for Senyar Industries and Advanced Pipes and Casts Company, both of which are now accounted for as joint ventures having both previously been consolidated as subsidiaries.

 

We are delighted to report that Aamal Readymix made significant progress against its expansion plan. Additional stock piles are now complete (increasing the raw material inventory capacity by 100%) and a number of its facilities have been upgraded, including the addition of a new central operations control building and the installation of a new recycling plant. Aamal Readymix is also pleased to have successfully met its CSR target of 0% dust emissions.

•  TRADING AND DISTRIBUTION

QAR m	H1 2018	H1 2017	Change