TSC resumes trading with rebounding earnings
Co net profit rises 88.0% to KD 0.8mn
KUWAIT CITY, Nov 16: Kuwait-headquartered supermarket chain The Sultan Center (TSC) today reported its earnings for Q3 2017 and progress update on its transformation plan. The company reported an EBITDA of KD 2.1 million for the quarter, up 2.8 percent, and a net profit of KD 0.8 million, up 88.0 percent from last year.
The company will resume trading on Nov 16 following the successful execution of phase-one of its transformation plan “Kuwait Retail First”. The suspension from trading was voluntary based on a request from TSC to shield investors, especially minority shareholders, from fluctuations that may arise from unfounded rumors and speculation during the first phase of this transformation.
The Sultan Center generates about 90 percent of its revenue from retail operations, 52 percent of which are generated from retail operations in Kuwait. TSC also operates supermarkets in Jordan, Oman, and Bahrain.
The ‘Kuwait Retail First” transformation plan aimed to refocus the company on its core retail business by exiting non-core assets and non-performing activities on the one-hand, and on the other hand focusing on enhancing its core retail business. Below are result highlights from the first phase of the transformation:
Over KD 7 million in cash will be generated before 2017 year end, in addition to savings, from the sale of noncore and non-performing assets
Reduced supplier dues in Kuwait by almost 45 percent
Increased total gross margins by 3.5 percentage points in Kuwait by improving inventory productivity ratios, commercial practices and business terms with vendors without increasing prices
Enhanced Group retail EBITDA by 32.3 percent, and Kuwait retail EBITDA by 51.6 percent as of September 30, 2017, compared to Sept 30, 2016
Reduced expenses by KD 3.8 million as of YTD Sept 30, 2017, compared to Sept 30, 2016
Focused on boosting Kuwait retail operations; Rationalized product assortment, optimized inventory KPI’s, and improved margins without increasing prices
Renegotiated restructuring the debt portfolio with key lenders, the company is in advanced stages of signing several term sheets.
TSC Chairman Tarek Sultan said, “I am pleased to report to our shareholders that our transformation plan “Kuwait Retail First” is well on track. Over the last eight months we have put TSC Kuwait retail business on a path of growth, we have exited a number of non-core assets and non-performing businesses that weighed heavily on the business, and we reduced our supplier dues in Kuwait by close to 45 percent. Today, we are in the final stages of agreeing with our lenders on a restructure plan for TSC’s debt portfolio and we expect to have more good news to share with our shareholders soon.” Group Financial Highlights The rebounding direction highlighted by the company’s bottom line performance, despite lower revenues, reflects the enhanced operational efficiency the company witnessed in Q3. Q3’17 Group Financial Highlights Revenue: KD 55.6 million, down 11.7 percent from Q3’16
Expenses: KD 9.4 million, down 11.3 percent from Q3’16
EBITDA: KD 2.1 million, up 2.8 percent from Q3’16
Net Profit: KD 0.8 million, up 88.0 percent from Q3’16
YTD Group 9-Month’17 Financial Highlights
Revenue: KD 174.6 million, down 12.4 percent from YTD’17
Expenses: KD 28.3 million, down 11.8 percent from YTD’17
EBITDA: KD 7.2 million down 3.6 percent from YTD’17
Net Profit: KD 2.2 million, up 33.1 percent from YTD’17