Mez­zan Hold­ing re­ports H1 2017 fi­nan­cial re­sults

Kuwait Times - - BUSINESS -

KUWAIT: Mez­zan Hold­ing KSC, one of the largest man­u­fac­tur­ers and dis­trib­u­tors of food, bev­er­age, FMCG and phar­ma­ceu­ti­cal prod­ucts in the Gulf, yes­ter­day an­nounced the com­pany’s fi­nan­cial re­sults for Q2 2017. The com­pany re­ported KD50.3 mil­lion in Q2 rev­enue, and a Q2 net profit of KD2.0 mil­lion. The quar­ter’s re­sults bring Mez­zan Hold­ing’s H1 rev­enue to KD107.8 mil­lion, down slightly by 0.6 per­cent from the same pe­riod last year, and bring H1 net profit to KD7.3 mil­lion, down 26.7 per­cent from the same pe­riod last year.

Mez­zan Hold­ing Ex­ec­u­tive Vice Chair­man Mo­hammed Jas­sim Al-Waz­zan said, “We are pleased to an­nounce to our share­hold­ers that this is our ninth quar­ter of con­sec­u­tive prof­itabil­ity since our list­ing on Boursa Kuwait and de­spite the chal­leng­ing dy­namic of our re­gion. Though we had a drop in prof­itabil­ity due to these fac­tors, our bal­ance sheet and cash po­si­tions con­tinue to be strong and ahead of our re­gional peers while our di­ver­si­fied busi­ness model, which is very unique to Mez­zan, has proven once again to be our big­gest as­set.”

Mez­zan Hold­ing CEO Gar­rett Walsh said, “Q2 proved to be a quar­ter that had both op­por­tu­ni­ties and some in­ter­nal and ex­ter­nal chal­lenges that were a drag on our prof­itabil­ity. Some of the chal­lenges were ad­dressed while oth­ers were be­yond our con­trol or in­flu­ence. With that said, the de­fen­sive na­ture of our busi­ness model helped us main­tain our rev­enue level and our con­tin­ued prof­itabil­ity. Look­ing for­ward, we are work­ing to off­set ex­ter­nal chal­lenges by max­i­miz­ing in­ter­nal op­por­tu­ni­ties. New syn­er­gies are be­ing iden­ti­fied in lo­gis­tics to lessen the im­pact of sim­i­lar sit­u­a­tions in the quar­ters to come and to re­turn to grow­ing our prof­itabil­ity.” Fi­nan­cial High­lights Rev­enue:

Q2’17: KD50.3 mil­lion, down 4.8%, com­pared to Q2 2016

Gar­rett Walsh H1’17: KD107.8 mil­lion, down 0.6% com­pared to H1 2016 EBITDA:

Q2’17: KD4.0 mil­lion, down 40.6% com­pared to Q2 2016 H1’17: KD11.3 mil­lion, a de­crease of 18.5% com­pared to H1 2016 Net profit:

Q2’17: KD2.0 mil­lion, down 58.1%, com­pared to Q2 2016

H1’17: KD7.3 mil­lion, a de­crease of 26.7% com­pared to H1 2016 H1 Fi­nan­cial Per­for­mance Re­view:

Food Busi­ness Line: The Food Busi­ness Line ac­counted for 72.7 per­cent of Group Rev­enue and com­prises of Man­u­fac­tur­ing and Dis­tri­bu­tion (52.8 per­cent), Cater­ing (13.3 per­cent) and Ser­vices (6.6 per­cent). Rev­enue reached KD78.3 mil­lion, an in­crease of 1.2 per­cent com­pared with the same pe­riod in 2016. Man­u­fac­tur­ing and Dis­tri­bu­tion: H1 Rev­enue in­creased by 1.4 per­cent, with broad based growth across our key op­er­at­ing units. This

was largely driven by our food man­u­fac­tur­ing di­vi­sions and the con­tin­ued suc­cess of Danone prod­ucts in our trad­ing divi­sion.

Cater­ing: H1 Rev­enue in­creased by 13.2 per­cent driven by con­tracts won in Q3 2016.

Ser­vices: H1 Rev­enue de­clined by 17.7 per­cent due to the tem­po­rary client-side dis­rup­tion of busi­ness in Afghanistan and na­ture of the in­con­sis­tent ten­der flow re­sult­ing in pe­ri­odic rev­enue fluc­tu­a­tions.

Non-Food Busi­ness Line: The Non-Food Busi­ness Line ac­counted for 27.3 per­cent of Group Rev­enue and com­prises FMCG and Phar­ma­ceu­ti­cals (24.7 per­cent of Group Rev­enue) and In­dus­tri­als (2.6 per­cent of Group Rev­enue). Rev­enue reached KD29.4 mil­lion, a de­crease of 4.7 per­cent com­pared with the same pe­riod in 2016.

FMCG and Phar­ma­ceu­ti­cals: H1 Rev­enue de­creased by 4.5 per­cent due to the con­tin­ued slow­down in the ten­ders of­fered by the Min­istry of Health, how­ever the dif­fer­ence is grad­u­ally be­ing com­pen­sated by other ar­eas in our FMCG busi­ness. In­dus­tri­als: Rev­enue de­creased by 6.9 per­cent driven by slow­down in the plas­tics man­u­fac­tur­ing busi­ness.

Re­gional Busi­ness High­lights: In Kuwait: H1 Rev­enue dropped by 1.2 per­cent, as the strong start from the be­gin­ning of the year was curbed by a soft Ra­madan shop­ping pe­riod. In UAE: H1 Rev­enue down by 5.0 per­cent, un­der­mined by softer re­gional ex­ports due to re­gional cir­cum­stances. In Qatar: H1 Rev­enue grew by 2.3 per­cent. In KSA: H1 Rev­enue grew by 921.8 per­cent as Mez­zan con­tin­ues to fo­cus on gain­ing a foothold in the re­gion’s largest con­sumer mar­ket. In Jor­dan: H1 Rev­enue de­creased by 39.6 per­cent due to chal­lenges to ten­der-driven busi­ness.

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