Financial Results for the six months ended 30 June 2021

For release 10 Aug 2021

Aamal Company Q.P.S.C. (‘Aamal’) 

Financial Results for the six months ended 30 June 2021 

Strong recovery in revenue and earnings growth as all business segments restored to profitability  

Doha, 10 August 2021 – the Board of Directors of Aamal Company Q.P.S.C. (Aamal), one of the Gulf Region’s leading diversified companies, today announces its financial results for the six months ended 30 June 2021.

Highlights  

• Total revenue up 12.1% to QAR 710.7m (H1 2020: QAR 634m)  

• Gross profit up 24.3% to QAR 192.4m (H1 2020: QAR 154.8m)  

• Net Underlying Profit (profit before share in results of associates and joint ventures accounted for using the equity method) increased to QAR 109.4m(H1 2020: QAR 8.8m loss)  

• Net underlying profit margin increased to 15.4% (H1 2020: -1.4%) 

• Reported Total Net Profit1 up 566% to QAR 131.1m (H1 2020: QAR 19.7m)  

• Reported earnings per share increased to QAR 0.021 (H1 2020: QAR 0.003)  

• Net capital expenditure of QAR 40.9m (H1 2020 QAR 25.5m)

• Gearing remains low at 4.8%

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: 

“Aamal performed strongly over the first half year, translating improved top-line revenues into net profit and earnings per share growth. This performance reflects the resilience of Aamal’s diversified business strategy and our focus on operational efficiency, production base optimization and financial discipline as we navigated through the pandemic to date. As a result we have restored all business segments to profitability in the half year and increased capital investment while maintaining a strong balance sheet and low gearing. Aamal is therefore well positioned, both to weather any future impacts of the pandemic and to benefit from the continued recovery of the wider economy. ” 

“All segments performed well and Industrial Manufacturing, Property and Managed Services each delivered year-on-year revenue, profit and margin improvement as restrictions eased, enabling infrastructure project order flows and retail and other business operations to start to normalize

“Looking ahead, Aamal is in excellent shape, with the right strategy, market diversification, operational efficiency and financial strength and resilience to continuing to deliver growth and value for all stakeholders while contributing to the continuing development of the Qatar economy. We look forward to the second half of the year with confidence.”

BREAKDOWN BY SEGMENT 

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

• REVENUE

QAR m	H1 2021	H1 2020	Change
Industrial Manufacturing	173.0	96.6	79%
Trading and Distribution	409.8	457.5	(10.4%)
Property	120.4	75.3	59.9%
Managed Services	27.3	25.1	8.5%
Eliminations	(19.8)	(20.5)	(3.6%)
TOTAL	710.7	634.0	12.1%

• NET PROFIT

QAR m	H1 2021	H1 2020	Change
Industrial Manufacturing	24.4	19.1	28.2%
Trading and Distribution	45.9	65.2	(29.6%)
Property (ex-FV losses)	93.3	48.4	92.9%
Fair Value Losses	-	(74.4%)	(100.0%)
Managed Services	0.7	(1.6)	(143.1%)
Head Office	(33.3)	(36.9)	9.8%
TOTAL	131.1	19.7	565.9%

BREAKDOWN BY SEGMENT 

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

INDUSTRIAL MANUFACTURING 

QAR m	H1 2021	H1 2020	Change
Revenue	173.0	96.6	79.0%
Net profit	24.4	19.1	28.2%
Made up of:
Net profit: fully consolidated activities	6.3	(6.5)	197.0%
Net profit: share in results of equity accounted investees	18.1	25.6	(29.4%)
Net underlying profit margin % (i.e. excluding share in results of equity accounted investees)	3.7%	(6.8%)	10.4 ppts

The Industrial Manufacturing segment performed well in the first half with revenue increasing 79% to QAR 173 million and net profit up 28.2% to QAR 24.4 million

New contract wins contributed to revenue growth at Aamal Readymix and Aamal Cement of 6.1% and 27.5% year-on-year respectively. Aamal Cement increased profit by 203.6% to QAR1.4million, while Aamal Readymix improved profitability, reducing its net loss by 51.3% to QAR 1.9 million as ongoing measures were implemented to protect margins, reduce costs and improve pricing and product mix as the readymix market continued to see intense price competition.

All business units benefitted from the trend towards normalization in demand levels related to infrastructure projects. Advanced Pipes and Casts continued to convert its healthy order backlog and production of the new Glass Reinforced Pipe product is expected to start during the last quarter of 2021. Ci San’s subsidiary, Aamal Maritime Services benefited from sharply increased demand for maritime shipping services in the second quarter.

As demand continues to track the increasing flow of contracts relating to the FIFA World Cup 2022 and Qatar’s pipeline of other major infrastructure projects continues to come on stream, volumes are expected to increase, supporting gradual margin improvement over the course of the second half of 2021 and bey

ond.

TRADING AND DISTRIBUTION

QAR m	H1 2021	H1 2020	Change
Revenue	409.8	457.5	(10.4%)
Net profit	45.9	65.2	(29.6%)
Net profit margin %	11.2%	14.2%	(3.1 ppts)

Ebn Sina and Aamal Medical continued to perform well financially and operationally, retaining a significant proportion of the elevated H1 2020 revenue and profit levels.  Ebn Sina introduced a new warehouse delivery system, “Digisal”, to automate the warehouse supply process by digitalizing the receipt of orders at the warehouse, processing and delivery to customers. It also received two robots for its warehouse for installation in the third quarter of 2021. The construction of Ebn Sina's new warehouse at Manateq is underway and this is expected to be operational during the second quarter of 2022.

Aamal Trading & Distribution’s automative businesses including Bridgestone Tyres performed well in the second quarter, delivering enhanced revenue growth and profitability as it benefitted from increased operational hours as restrictions started to ease. Further progress is expected in the second half as restrictions continue easing, through enhanced sales and marketing activities and greater availability of stock to meet customer demand.

PROPERTY

QAR m	H1 2021	H1 2020	Change
Revenue	120.4/em>	75.3	59.9%
Net profit before fair value loss	93.3	48.4	92.9%
Fair Value Loss	-	(74.4)	100%
Net Profit / (Loss)	93.3	(26.0)	458.6%
Net profit / (loss) : fully consolidated activities	91.0	(27.6)	(429.7%)
Net profit: share of equity accounted for investee net profits	2.3	1.6	44.6%
Net underlying profit margin % (i.e. excluding share of equity accounted investee profits)	75.6%	(36.7%)	112.3 ppts

Property segment revenue increased 59.9% year-on-year to QAR 120.4 million, while net profit rose 458.6% to QAR 93.3 million, reflecting the ongoing normalizing of rental revenues in the first half and the elimination of negative fair value adjustments made in H1 2020 at the height of the pandemic restrictions.

A growing number of new retail outlets opened at City Center Doha over the course of the first half year. Work continues with the development of the City Center frontage which will see the launch of new outdoor cafes and restaurants, as well as landscaping and work on two bridges connecting the mall to the metro station and the central business district, all initiatives which will further improve the customer experience at City Center.

MANAGED SERVICES

QAR m	H1 2021	H1 2020	Change
Revenue	27.3/em>	25.1	8.5%
Net profit	0.7	(1.6)	143.1%
Made up of:
Net profit: fully consolidated activities	(0.6)	(2.9)	79.7%
Net profit: share of equity accounted for investee net profits	1.3	1.3	(0.5%)
Net underlying profit margin % (i.e. excluding share of equity accounted investee profits)	(2.2%)	(11.7%)	9.5 ppts

The first half of 2021 saw a gradual return to normal for parts of the Managed Services segment. Revenue was up 8.5% year-on-year to QAR 27.3 million and net profit up 143.1% to QAR 0.7 million.

Despite the continued challenges facing businesses within this segment, Aamal Services benefitted from increasing demand as restrictions eased over the period. Aamal Travel’s performance also improved following the easing of restrictions relating to the global travel industry.

Although Winter Wonderland and Fun City remained closed for the majority of the period, Fun City reopened during June 2021 following the easing of COVID-19 restrictions.

SUMMARY AND OUTLOOK

H.E. Sheikh Mohamed Bin Faisal Al Thani, Chief Executive Officer and Managing Director of Aamal, said: 

“Our half year performance represents an inflection point for Aamal. The initiatives undertaken to navigate the pandemic and target growth and operational efficiency have restored the profitability of all business segments and delivered good revenue and profit growth. This performance also demonstrates the strength of our diversified business strategy with significant contributions made by all subsidiaries, ranging from the opening of new stores at City Center Doha, the impressive performances of Aamal Maritime Transportation Services and the new contract wins by Aamal Readymix and Aamal Cement Industries to Ebn Sina’s and Aamal Medical’s continuing strong results against moderating demand as the pandemic recedes, and the agility of our Managed Services subsidiaries to meet increasing demand as the restrictions which had so affected their services have started to ease.

“This outcome is down to our successful business strategy, our strong financial position and discipline, our commitment to the highest standards of governance, our outstanding management team and the dedication of all our employees who have worked so tirelessly to overcome the challenges of the pandemic.

“The momentum of our performance in the first six months has carried into the start of the second half year and we look forward to the remainder of 2021 with confidence as we continue to meet the growing demand for our high-quality products, bring new and innovative products and services to the market and explore new opportunities for incremental growth and value creation.”

A conference call to discuss the results will be held on 11 August 2020 at 14.00 Doha / 12.00 UK. The details for the conference call are as follows:

Date:	Wednesday, 11 August 2021
Time:	14.00 Doha / 12.00 UK
Conference Link:	https://us06web.zoom.us/j/88138849567
Dial-In Numbers:
UK & International:	+44 330 088 5830
USA:	+1 646 876 9923
Conference ID:	881 3884 9567

Please join the event conference 5-10 minutes prior to the start time.

FURTHER ENQUIRIES

Aamal Company
Laura Ackel – Corporate Communications Officer	E : [email protected]  T: +974 6671 6576
Citigate Dewe Rogerson (IR/PR Advisor)
Andrew Hey	E: [email protected]  T: +44 (0)7903 028 448
Toby Moore	E: [email protected]  T: +44 (0)7768 981 763
Kieran Farthing	E: [email protected]  T: +44 (0)7774 256545
Laura Banks	E: [email protected]  T: +44 (0)7545 942738
Ramiz Al-Turk (Arabic media)	T: [email protected]  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 27 April 2021, the Company had a market capitalisation of QAR 6.11bn (US$ 1.68bn).  

Aamal’s operations are widely diversified and comprise 27 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