Aamal Company (Aamal), one of the Gulf region’s fastest growing diversified companies, reported QR1.28bn in total revenue for the full year 2018, down 19.8 percent from a year ago. The decline is primarily due to the reclassification of two business entities within the Industrial Manufacturing segment from subsidiaries to joint ventures from 1 April 2017.
Aamal’s gross profit is down by 14.4 percent to QR467.2m and net profit before share of net profits of associates and joint ventures, accounted for using the equity method and fair value gains on investment properties, fell 17.4 percent to QR347.6m.
Net underlying profit margins have increased by 0.7 percentage points to 27.0 percent. Share of net profits from associates and joint ventures accounted for using the equity method decreased 2.0 percent to QR100.0m. There were no fair value gains on investment properties during 2018, or in 2017. Total Company net profit is down 14.4 percent to QR447.6m, with net profit attributable to Aamal equity holders down 11.1 percent to QR445.3m.
Reported earnings per share decreased 11.3 percent to QR0.71 as net capital expenditure is up 172.0 percent to QR289.6m, reflecting variations in contractor billing profiles.
Commenting on the financial results, Sheikh Faisal bin Qassim Al Thani, Chairman of Aamal Company said: “While the year saw a decline in revenue and net profit compared to 2017, our performance was in line with expectations and impacted by pre-identified, short to medium-term factors. Our 2018 success demonstrates Aamal’s unwavering ability to remain one step ahead of the competition due to our ongoing investment, our ability to take advantage of the opportunities offered by the strength of the Qatari economy, and our agility in responding to challenges. I am delighted to announce a recommended cash dividend of QR0.60 a share, subject to approval at the AGM which will take place on 15 April 2019.
“As noted in quarterly results announcements throughout 2018, Aamal continues to feel the impact of the reclassification of two business entities within the Industrial Manufacturing segment from subsidiaries to joint ventures, with a consequent change in their accounting presentation. This change will continue to impact our financial results until the first quarter of 2019, at which point the change will have fully annualised.
“The year-on-year decline in revenue and net profit was also partly attributable to the Property segment, specifically the continuing re-development of our flagship ‘City Center Doha’ shopping mall. This work continues to progress to schedule and will significantly enhance the longer-term performance of the City Center Doha, despite the short-term impact.
“Our Trading and Distribution segment delivered a particularly strong performance across the year, led by Ebn Sina Medical, a fully-owned subsidiary and Qatar’s leading provider of pharmaceuticals, hospital supplies and consumer health products.
Aamal’s Managed Services segment also saw positive results, particularly in terms of operational efficiency, led by ECCO Gulf and Aamal Services.
“Looking ahead, I remain confident in Aamal’s future, with the Company’s resilient and diversified business model supported by a clearly defined, long-term strategy helping us to achieve sustainable growth for our shareholders. We will continue to explore new opportunities, using our first mover advantage to introduce innovative projects and supporting our beloved country in achieving its National Vision under the wise leadership of the Emir, Sheikh Tamim bin Hamad Al Thani, and the Government of Qatar.” As explained in the results announcements throughout 2018, the decline in revenue and net profit of 60.4 percent and 39.5 percent, respectively, is largely attributable to a change 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, he added.
The decline in revenue and net profit for Aamal Readymix, the largest subsidiary of the Industrial Manufacturing segment, is attributable to the increased costs associated with rent, fuel, raw materials, repair and maintenance, and depreciation. Aamal Readymix successfully completed the relocation of the Lusail Batching Plant to the new Manateq Industrial zone in Mazroua and finalized the installation and commissioning of five production plants at the recently renovated Bu-Qalila site. This has significantly enhanced production facilities which now boast state-of-the-art equipment and have increased Aamal Readmix’s raw material storage capacity by 50,000 tonnes. Consequently, Aamal Readymix is now well-positioned to support major projects in adjacent areas.
Sheikh Mohamed bin Faisal Al Thani, Vice-Chairman and Managing Director of Aamal Q.P.S.C., commented: “Aamal has continued to build on its enviable track record, adopting new initiatives to support its diversified business model through a combination of organic growth and new businesses. Throughout the year, the Aamal businesses have remained assiduously focused on strengthening their market positions while remaining one step ahead of the competition through ongoing investment. These efforts have yielded positive results, as demonstrated by Aamal’s’ ability to withstand challenging external pressures such as the ongoing Qatar border blockade and heightened competition.
“Looking ahead through 2019, Aamal remains well-positioned for further sustainable growth. We will continue to leverage our strong financial position and pursue our successful diversification strategy, building on Aamal’s leading positions across a number of different sectors and selectively expanding so as to create long-term shareholder value. The strength of the Qatar economy further supports our efforts in this regard.”
Source from: The Peninsula