Mezzan Holding reports H1 net profit of KD 6.8mn

Group revenue rises 1.5% to KD 109.4mn during first half

KUWAIT CITY, Aug 9: Mezzan Holding KSC, one of the largest manufacturers and distributors of food, beverage, FMCG and pharmaceutical products in the Gulf, today announced the company’s financial results for the first half ending June 30, 2018.

Revenue: KD 109.4 million, up 1.5% from H1 2017

EBITDA: KD 11.2 million, down 1.1% from H1 2017

Reported Net Profit attributable to Equity Holders of the Parent Company: KD 6.8 million, down 6.9% from H1 2017

(The above H1 2018 results are based on IFRS 15 and 9 accounting standards, which came into effect in January 2018. However, 2017 figures were not restated to reflect the changes in the standards. Therefore a like-for-like comparison would show an increase of 4.2% in revenue, a 0.7% increase in EBITDA, and a slight 4.3% decline in net profit attributable to Equity Holders of the Parent Company.)

Mezzan Holding Executive ViceChairman Mohammad Jassim Al Wazzan said, “We are glad to see our top line grow albeit modestly, despite the various headwinds facing the group. We hope the newly installed capacities throughout various operations will further support top line growth and profitability as these are deployed in the near future”.

Mezzan Holding CEO Garry Walsh added, “We have performed well in our core business and core market, with Kuwait supporting the group results with double digit growth. Our operations in the UAE, impacted by the implementation of 100% excise duty levied on energy drinks late last year, in addition to VAT, is the largest headwind the group currently faces as we continue to find product from parallel markets, led us to complete yet another round of cost rationalization exercise recently. We expect the headwind to subside by the annualization of the event in Q4 2018. We have recently added capacities in core products of Chips in the UAE and Qatar which we hope will further spur growth soon.

Food Business Line: The Food Business Line accounted for 71.5% of Group Revenue. The Business Line comprises the following three divisions: Manufacturing and Distribution (generating 48.5% of Group Revenue), Catering (generating 16.5% of Group Revenue) and Services (generating 6.4% of Group Revenue). Total Revenue for the Food Business Line reached KD 78.2 million, a slight decrease of 0.1% compared with the same period in 2017.

Manufacturing and Distribution: Revenue decreased by 6.7% given the impact of excise duty in the UAE and general conditions.

Catering: Revenue increased by 26.2% given expanding business in Kuwait and Qatar.

Services: Revenue decreased by 1.1%.

Non-Food Business Line: The Non-Food Business Line accounted for 28.5% of Group Revenue. The Business Lines comprises FMCG and Pharmaceuticals business division (generating 26.1% of Group Revenue) and Industrials (generating 2.4%). Revenue reached KD 31.2 million, an increase 5.8% compared with the same period in 2017.

FMCG and Pharmaceuticals: Revenue increased by 7.2%.

Industrials: Revenue decreased by 6.7%.

In Kuwait: H1 2018 Revenue grew by 8.0% due to enhanced trading.

In UAE: H1 2018 Revenue decreased by 27.1% due to impact of excise tax introduced in October 2017 and general market conditions.

In Qatar: H1’18 Revenue grew by 5.9%.

In KSA: H1’18 Revenue declined by 17.5%, notwithstanding the same, the business reached breakeven point in March 2018.

In Jordan: H1’18 Revenue decreased by 18.0% due to challenges to tenders-driven business.

In Afghanistan: H1 Revenue increased by 13.2%.

In Iraq: Revenue grew by 14.4%.