Half Year Financial Results 2020

Aamal Company Q.P.S.C. (‘Aamal’)

Financial Results for the six months ended 30 June 2020

Financial performance impacted in the short-term as Aamal navigates COVID-19 headwinds and takes action to support the economy in the national interest

Doha, 29 July 2020 – 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 2020.

Financial Highlights

• Total revenue down 0.3% to QAR 634.0m (H1 2019: QAR 636.1m)
• Gross profit down 31.6% to QAR 154.8m (H1 2019: QAR 226.2m)
• Net Profit before fair value loss and share in results of associates and joint ventures accounted for using the equity method amounted to QAR 65.6m (H1 2019: QAR 141.2m)
• Net loss before share in results of associates and joint ventures accounted for using the equity method (“net underlying profit”) amounted to QAR (8.8m) (H1 2019: QAR 141.2m profit)
• Net underlying profit margin decreased to -1.4% (H1 2019: 22.2%)
• Share in results of associates and joint ventures accounted for using the equity method decreased 32.0% to QAR 28.5m (H1 2019: QAR 41.9m)
• Reported net profit of QAR 19.7m (H1 2019: QAR 183.1m)
• Reported earnings per share at QAR 0.003 (H1 2019: QAR 0.03)
• Net capital expenditure up 21.8% to QAR 25.5m (H1 2019 QAR 20.9m)
• Gearing remains low at 3.4%

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:

“The COVID-19 crisis continues to evolve and to impact, in different ways, the many sectors across which Aamal operates. Our priority remains the health and safety of our employees and customers, as well as continuing to take whatever action we can to help support the national economy through the pandemic in line with our national and corporate responsibilities.

“To support our valued retail tenants during these hugely challenging times, Aamal approved the waiver of rents for our retail units during the second quarter of 2020. While this decision negatively impacted Aamal’s financial results for the period, we believe that supporting our tenants in this way is the right thing to do.

“As we reported in the first quarter, companies in the Trading and Distribution segment have acted swiftly and effectively to support Qatar’s communities during the pandemic, including launching services for the home delivery of medicines. As the pandemic peaked in Qatar during the second quarter, Ebn Sina Medical and Aamal Medical in particular continued to work tirelessly to ensure that customers continued to receive a reliable supply of critical medicines and medical equipment.

“In addition to enduring the enforced operational suspension of a number of our Managed Services and Trading and Distribution businesses, the impact of the pandemic has exacerbated the intense competition and major project postponements experienced across the Industrial Manufacturing segments in which we operate. In response to these, we have instigated a wide-ranging review of these operations that will better ensure that they perform as efficiently, as effectively and as competitively as possible going forward.

“We are pleased to report that from May 2020 Aamal has been included in the MSCI Qatar Small Cap Index. The MSCI is a leading provider of research-based indexes and analytics, and its indexes are often used as benchmarks by the global investment community to measure portfolio performances.

“Looking ahead, 2020 will continue to be a challenging year as companies around the world deal with the impact of COVID-19. However, Aamal’s Board of Directors and management team remain confident in the Group’s ability to navigate effectively through these challenges and to return to growth in 2021, supported by Qatar’s robust economy, the resilience provided by Aamal’s diverse business model and the Group’s financial strength. I look forward to updating shareholders regarding future developments in due course.”

BREAKDOWN BY DIVISION

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

• REVENUE

QAR m	H1 2020	H1 2019	Change
Industrial Manufacturing	96.6	80.0	20.8%
Trading and Distribution	457.5	374.2	22.3%
Property	75.3	146.6	(48.7%)
Managed Services	25.1	49.7	(49.4%)
Eliminations	(20.5)	(14.5)	41.9%
TOTAL	634.0	636.1	(0.3%)

• NET PROFIT

QAR m	H1 2020	H1 2019	Change
Industrial Manufacturing	19.1	39.7	(51.9%)
Trading and Distribution	65.2	54.5	19.5%
Property (ex-FV losses)	48.4	117.6	(58.9%)
Fair Value Losses	(74.4)	-	(100.0%)
Managed Services	(1.6)	3.3	(149.9%)
Head Office	(36.9)	(31.9)	15.4%
TOTAL	19.7	183.1	(89.2%)

DIVISIONAL REVIEW

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

INDUSTRIAL MANUFACTURING 

QAR m	H1 2020	H1 2019	Change
Revenue	96.6	80.0	20.8%
Net profit	19.1	39.7	(51.9%)
Made up of:
Net profit: fully consolidated activities	(6.5)	0.4	(1,662.5%)
Net profit: share in results of equity accounted investees	25.6	39.2	(34.8%)