Half year financial results 2013
Net Profit up 8.9%
Growth in earnings per share in excess of 30%
Doha, 30 July 2013 – 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 half year ended 30 June 2013.
Financial Highlights
- Net profit1 up 8.9% to QAR 130.1m (H1 2012: QAR 119.5m), supported by a strong focus on central cost control
- Net profit margins2 of 12.8% (H1 2012: 10.2%)
- Group revenue down 11.4% to QAR 959.6m (H1 2012: QAR 1,083.3m3)
- Gross profit down 2.6% to QAR 206.3m (H1 2012: QAR 211.7m3)
- Financial gearing4 decreased to 9.4% (31 December 2012: 9.7%)
- Net investment in capital expenditure of QAR 81.9m (H1 2012: QAR 166.1m), driven by Phase 1 of the City Center Doha expansion project and construction of the Advanced Pipes & Cast Company both nearing completion
- Reported earnings per share up 30.1% at QAR 0.22 (H1 2012: QAR 0.175)
(N.B. there may be slight differences due to rounding)
1 There were no fair value gains on investment properties in either H1 2013 or H1 2012; net profit is stated after the share of profits of investments equity accounted for and the deduction of Head Office costs but before the deduction of non-controlling interests
2 Excluding share of profits of investments equity accounted for
3 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 H1 2012 figures have been restated accordingly (where relevant)
4 Net debt to net debt plus equity
5 In April 2013, Aamal issued and capitalised bonus shares so HY 2012 EPS has been adjusted accordingly (Company share capital increased to QAR 6.0bn from QAR 5.45bn)
H.E. Sheikh Faisal Bin Qassim Al Thani, Chairman of Aamal Company QSC, commented:
“The first six months of the year has seen growth in earnings per share in excess of 30% compared with the corresponding period in 2012. This highly impressive rise in profits attributable to Aamal’s shareholders is made up of solid growth of almost 9% in net profit for the Company overall, complemented by a significant fall in net profit attributable to non-controlling interests compared to the previous year. With such a stable growth engine underpinning the Company, Aamal is well-positioned to build on its existing strong market positions and strengths through capitalising fully on opportunities that are constantly being identified and appraised: the future indeed does look very bright.”
BREAKDOWN BY DIVISION
(nb. there may be slight differences due to rounding)
REVENUE
| QAR m | H1 2013 | H1 2012 (restated) | Change % |
|---|---|---|---|
| Industrial Manufacturing | 534.7 | 661.9* | (19.2)% |
| Trading and Distribution | 281.0 | 282.7 | (0.6)% |
| Property | 135.2 | 121.3 | 11.5% |
| Managed Services | 45.6 | 44.3 | 3.0% |
| less: inter-divisional revenue | (36.9) | (26.9) | (37.0)% |
| Total | 959.6 | 1,083.3 | (11.4)% |
* The effective 27.5% ownership interest in El Sewedy Cables Qatar is now equity accounted for and H1 2012 Revenue for the Industrial Manufacturing division has been restated accordingly
NET PROFIT
| QAR m | H1 2013 | H1 2012 | Change % |
|---|---|---|---|
| Industrial Manufacturing | 0.4 | 27.6 | (98.5)% |
| Trading and Distribution | 42.8 | 31.8 | 34.6% |
| Property | 108.4 | 95.8 | 13.1% |
| Managed Services | 2.2 | 6.7 | (67.6)% |
| Other Income | 0.0 | 0.1 | n/a |
| Less: Head Office costs | (23.7) | (42.5) | 44.3% |
| Total | 130.1 | 119.5 | 8.9% |
DIVISIONAL REVIEW
(nb. there may be slight differences due to rounding)
INDUSTRIAL MANUFACTURING
| QAR m | H1 2013 | H1 2012 | Change % |
|---|---|---|---|
| Revenue | 534.7 | 661.9* | (19.2)% |
| Net profit | 0.4 | 27.6 | (98.5)% |
* The effective 27.5% ownership interest in El Sewedy Cables Qatar is now equity accounted for and H1 2012 Revenue for the Industrial Manufacturing division has been restated accordingly
Revenues at the Industrial Manufacturing division fell by 19.2% during the first six months of the year compared to the corresponding period in 2012. The main proponent behind this has been a fall in sales at Senyar Industries, which now only comprises Doha Cables as El Sewedy Cables Qatar is now accounted for as a separate line item, showing the effective ownership percentage of net profits. Sales have fallen at Doha Cables due to the deferment of orders from one of the big contracts the Company has.
The first half of 2013 has also seen a drop in sales at Ci-San Trading due to the imposition of quality restrictions on the import of gabbro aggregates, which has held up imports and therefore adversely impacted sales. Its sole trading entity, Gulf Rocks however, has successfully obtained the ISO 9001:2008 Certification which allows it to comply with the new quality control requirements of the Ministry of the Environment, so this drop in sales is felt to be a temporary phenomenon.
These falls in sales at Doha Cables and Ci-San Trading have to some extent been offset by a significant revenue rise at Aamal Cement, due to a widening of its product range and hence customer appeal, which has resulted in a significant uptick in orders.
The construction of the 85,000m2 Advanced Pipes & Cast Company plant at Mesaieed continues to be on track for completion in the fourth quarter of 2013. This will be the only company in Qatar to manufacture both reinforced concrete and glass pipes.
TRADING AND DISTRIBUTION
| QAR m | H1 2013 | H1 2012 | Change % |
|---|---|---|---|
| Revenue | 281.0 | 282.7 | (0.6)% |
| Net profit | 42.8 | 31.8 | 34.6% |
| Net profit margin % | 15.2% | 11.2% | 4.0 ppts |
Revenues for the Trading and Distribution division remained largely flat, whilst net profit margins increased by 400 basis points to 15.2%: both Aamal Medical and Ebn Sina Medical recorded significant margin increases due to improvements in their sales mix.
In April 2013, a joint venture agreement with Vivantes International Medicine, the biggest hospital group in Germany, was announced to build an outpatient medical centre in Doha.
PROPERTY
| QAR m | H1 2013 | H1 2012 | Change % |
|---|---|---|---|
| Revenue | 135.2 | 121.3 | 11.5% |
| Net profit | 108.4 | 95.8 | 13.1% |
| Net profit margin % | 80.2% | 79.0% | 1.20 ppts |
Revenues for the Property division rose by 11.5%, predominantly driven by the City Center Doha shopping mall, following its recent expansion and renovation of retail space, and paid for parking.
Net margins increased by 120 basis points to 80.2%: following the improvement works at City Center Doha, higher end tenants are being attracted which in turn is leading to higher rental premia.
Occupancy again at both City Center Doha and Aamal Real Estate continued to be high at 95%, with 5% held back as a strategic reserve to allow for active management.
Phase 1 of the City Center Doha expansion is nearing completion which will add 7,000m2 and increase car parking capacity by around 25%.
There were no fair value gains on investment properties during the period (H1 2012: nil).
MANAGED SERVICES
| QAR m | H1 2013 | H1 2012 | Change % |
|---|---|---|---|
| Revenue | 45.6 | 44.3 | 3.0% |
| Net profit | 2.2 | 6.7 | (67.6)% |
| Net profit margin % | 4.8% | 15.2% | (10.4) ppts |
Revenues for the Managed Services division grew marginally at 3% for the six month period; this figure however, masks material increases in turnover at Aamal Services with the winning of new cleaning and pest control contracts.
Net profit margins for the division fell to 4.8% from 15.2% for the corresponding period in 2012. The principal reason for this was the fall in margins at ECCO Gulf.
SUMMARY AND OUTLOOK
H.E. Sheikh Mohamed Bin Faisal Al Thani, Vice-Chairman of Aamal, commented:
“We have made a very good start to the year with earnings per share up in excess of 30%. Aamal is in great shape with both profitability and cash generation rising: this presents us with a wonderful opportunity to build upon what we have achieved so far and continue to participate fully in the growth of Qatar.”
Tarek M. El Sayed, Managing Director of Aamal, commented:
“Aamal is a company that occupies strong market positions in many parts of the Qatari economy and it is through this diversification that it is directly plugged in to the Qatar growth story. It should come as no surprise that world class multinationals continue to see us as the partner of choice when wishing to enter the Qatar market: one perfect example of this was the signing in the first half of the year of a joint venture with Vivantes International Medicine, the biggest hospital group in Germany, to build an outpatient medical centre in Doha.”
Further enquiries:
| Aamal Company | + 974 4435 0666 |
|---|---|
| Arwa Goussous, Corporate Communications Manager (mobile # +974 5513 9539) |
[email protected] |
| Citigate Dewe Rogerson |
+974 4452 8100 |
|
For English language media |
|
|
Michael Prest |
[email protected] |
|
Andrew Hey |
[email protected] |
|
Nick Cox-Johnson |
[email protected] |
| For Arabic language media | |
|
Amira Shohdi |
[email protected] |
PLEASE NOTE: A video webcast of Aamal Company management presenting the 2013 Half Year Results is available for equity analysts and investors to download from the Investor Relations section of the Aamal Company website:
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 2006-2012 and generating revenues of QAR 2,284m (US $627m) in 2012. Focused on sustained, profitable growth and strongly diversified for balanced exposure across Qatar’s rapidly growing economy, Aamal’s operations comprise 21 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
