Mez­zan Hold­ing re­ports Q3 2016 fi­nan­cial re­sults 3.6% rise in rev­enues for 9 months ended Sept 30

Kuwait Times - - BUSINESS -

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 Q3 2016. Third quar­ter rev­enue was up 3.0 per­cent as it stood at KD47.7 mil­lion, bring­ing the to­tal rev­enue for the first three quar­ters of the year to KD156.2 mil­lion, an in­crease of 3.6 per­cent over the same pe­riod last year.

The Com­pany’s over­all per­for­mance in Q3 comes in line with man­age­ment ex­pec­ta­tions given pre­vail­ing chal­leng­ing macro-eco­nomic en­vi­ron­ment in some of the mar­kets in which the com­pany op­er­ates. Fi­nan­cial re­sults for the 9-month pe­riod ended 30 Septem­ber 2016 were sup­ported by growth in rev­enues of Food man­u­fac­tur­ing & dis­tri­bu­tion seg­ment by 7.3 per­cent on the back of in­creased pro­duc­tion and new busi­ness. Prof­itabil­ity was sup­ported by Food man­u­fac­tur­ing & dis­tri­bu­tion and Non Food Fast Mov­ing Con­sumer Goods Groups which com­pen­sated for pres­sure from the Cater­ing busi­ness. The com­pany’s prof­itabil­ity for the quar­ter was also im­pacted by ex­pected op­er­a­tional losses from newly ac­quired Al-Safi Foods (now re­branded to Mez­zan Foods KSA). The strate­gic ac­qui­si­tion in the King­dom of Saudi Ara­bia was ex­e­cuted in Q3’16 and is cur­rently un­der­go­ing a suc­cess­ful turn-around in­volv­ing var­i­ous busi­ness op­ti­miza­tion ini­tia­tives and the in­tro­duc­tion of new SKUs into the Saudi mar­ket.

Un­der­ly­ing net profit for the quar­ter was KD3.1 mil­lion, rep­re­sent­ing a 3.5 per­cent in­crease from the same pe­riod last year. As a re­sult of a strong quar­ter, the com­pany was able to counter the de­cline in cater­ing rev­enues that was seen ear­lier in the year. Mez­zan Hold­ing’s year-to-date un­der­ly­ing net profit stood at KD13.5 mil­lion, rep­re­sent­ing a sub­tle de­cline of 0.7 per­cent from the same pe­riod last year.

Mez­zan Hold­ing CEO, Garry Walsh, said: “Our year-to-date per­for­mance is in­line with our pre­vi­ously an­nounced out­look with the ex­cep­tion of the ex­pected im­pact on our bot­tom-line by Mez­zan Foods KSA, which is un­der­go­ing a turn­around plan and per­form­ing above ex­pec­ta­tions. Our mar­ket out­look for the next four quar­ters is con­ser­va­tive given the pre­dom­i­nant mar­ket dy­nam­ics, how­ever be­ing a con­sumer com­pany with 80 per­cent of our port­fo­lio com­prises con­sumer and house­hold sta­ples we are well po­si­tioned to con­tinue our healthy per­for­mance in this re­silient and de­fen­sive sec­tor.”

• Rev­enue: KD156.2 mil­lion, up 3.6 per­cent • Un­der­ly­ing Net Profit: KD13.5 mil­lion, down 0.7 per­cent*

• Re­ported Net Profit at­trib­ut­able to Eq­uity hold­ers of the Par­ent Com­pany: KD13.1 mil­lion, down 18.7 per­cent

Q3 2016 Fi­nan­cial High­lights:

• Rev­enue: KD47.7 mil­lion, up 3 per­cent • Un­der­ly­ing Net Profit: KD3.1 mil­lion, up 3.5 per­cent

• Re­ported Net Profit at­trib­ut­able to Eq­uity hold­ers of the Par­ent Com­pany: KD 3.1 mil­lion, down 14.5 per­cent

YTD (nine-month 2016) Fi­nan­cial Per­for­mance Re­view:

• Food Busi­ness Line: The Food Busi­ness Line gen­er­ated KD114.0 mil­lion in Rev­enue, or 73.0 per­cent of Group Rev­enue, rep­re­sent­ing an in­crease of 4.5 per­cent com­pared with the same pe­riod in 2015. The Busi­ness Line com­prises three di­vi­sions, and they are Man­u­fac­tur­ing and Dis­tri­bu­tion (52.3 per­cent of Group Rev­enue), Cater­ing (12.3 per­cent), and Food Ser­vices (8.5 per­cent).

• Non-Food Busi­ness Line: The Non-Food Busi­ness Line gen­er­ated KD42.0 mil­lion dur­ing the pe­riod, or 27.0 per­cent of Group Rev­enue, rep­re­sent­ing an in­crease of 0.8 per­cent com­pared with the same pe­riod in 2015. This Busi­ness Line com­prises two busi­ness di­vi­sions, and they are FMCG and Phar­ma­ceu­ti­cals (24.2 per­cent of Group Rev­enue), which grew by 2.4 per­cent, and Industrials (2.8 per­cent of Group Rev­enue), which de­clined by 11.3 per­cent per­cent in the pe­riod.

• Re­gional Busi­ness High­lights: Mez­zan Hold­ing op­er­ates in seven coun­tries, with over 90 per­cent of rev­enue gen­er­ated in Kuwait (66.8 per­cent), UAE (16.3 per­cent) and Qatar (9.3 per­cent). In Kuwait, rev­enues grew by 3.8 per­cent, in UAE rev­enues were slightly down by 3.9 per­cent, and in Qatar rev­enues grew by 12.4 per­cent. The com­pany also saw rev­enue growth of 28.2 per­cent in Jor­dan, con­tribut­ing 4.6 per­cent to of the Group’s to­tal rev­enue for the pe­riod.

Mez­zan Hold­ing CEO Garry Walsh

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