Posted on July 15, 2015

The Board of Directors of Aamal Company QSC (“Aamal”), one of the GCC’s fastest growing diversified companies, today announces its financial results for the half year ended 30 June 2015.

Financial Highlights

  • Group revenue up 23.1% to QAR 1.35bn (H1 2014: QAR 1.10bn)
  • Gross profit up 26.2% to QAR 310.4m (H1 2014: QAR 246.0m)
  • Net profit1 up 45.6% to QAR 247.4m (H1 2014: QAR 169.9m)
  • Net profit margins2 increased to 17.1% (H1 2014: 14.6%)
  • Reported earnings per share up 39.0% at QAR 0.35 (H1 2014: QAR 0.253)
  • Net investment in capital expenditure of QAR 46.0m (H1 2014: QAR 38.7m)
  • Financial gearing4 remains low at 6.2% (31 December 2014: 4.5%)

1 There were no fair value gains on investment properties in either H1 2015 or H1 2014; net profit is stated before the deduction of non-controlling interests

2 Excluding share of profits equity accounted for investments in associates and joint ventures

3 In March 2015, Aamal issued and capitalised bonus shares so HY 2014 EPS has been adjusted accordingly (Company share capital increased to QAR 6.3bn from QAR 6.0bn)

4 Net debt to net debt plus equity

(N.B. there may be slight differences due to rounding)

H.E. Sheikh Faisal Bin Qassim Al Thani (pictured), Chairman of Aamal Company QSC, commented: “In April, I reported on an excellent set of results for the first three months of the year and I am pleased to say that we have managed to sustain this strong momentum in to the second quarter. Net profit increased by over 45% for the six month period, driven by both top line revenue growth and an expansion in margins. This is a reflection of the market leading positions that Aamal occupies across a number of sectors that are helping to drive Qatar’s growth as an industrialised economy.

“For example, the Industrial Manufacturing division, which now constitutes almost 60% of Aamal’s gross sales, saw a 39% increase in sales. Together with strong margin expansion, this translated into an increase in net profit of over 133%. Aamal’s Trading and Distribution and Property divisions also both continued to make significant contributions in the first half of 2015 and this diversification is certainly one of Aamal’s key attractions, in terms of both exposure to the wider Qatari economy and the management of risk.

“Part of the ethos at Aamal is the early identification of commercial opportunities and, following careful due diligence, acting decisively to ensure capital is allocated where it will create maximum shareholder value. This is evident in our change of focus within our Managed Services division away from some lower margin operations, as we continue to strengthen our performance and our competitive advantages across the business. I look forward to reporting another strong performance at the time of our nine month results announcement.”

BREAKDOWN BY DIVISION

(N.B. there may be slight differences due to rounding)

REVENUE

QAR m

H1 2015

H1 2014

Change

Industrial Manufacturing

807.0

580.5

39.0%

Trading and Distribution

375.9

356.8

5.4%

Property

159.9

141.5

13.0%

Managed Services

32.7

40.4

(19.0)%

less: inter-divisional revenue

(26.6)

(23.7)

(12.2)%

TOTAL

1,349.0

1,095.5

23.1%

NET PROFIT

QAR m

H1 2015

H1 2014

Change

Industrial Manufacturing

60.1

25.8

133.2%

Trading and Distribution

71.0

51.0

39.2%

Property

133.8

109.0

22.8%

Managed Services

2.4

5.4

(54.4)%

less: Head Office costs

(19.9)

(21.2)

6.0%

TOTAL

247.4

170.1

45.6%

DIVISIONAL REVIEW

(N.B. there may be slight differences due to rounding)

  • INDUSTRIAL MANUFACTURING

QAR m

H1 2015

H1 2014

Change

Revenue

807.0

580.5

39.0%

Total Net profit

60.1

25.8

133.2%

Made up of:

 

 

 

Net profit: fully consolidated activities

42.9

15.3

179.2%

Net profit: share of equity accounted for investee net profits

17.3

10.4

65.6%

Net underlying profit margin %

(i.e. excluding share of equity accounted invested profits)

5.3%

2.6%

       2.7 ppts

Revenues for the Industrial Manufacturing division increased by 39.0% during the first six months of the year compared to the corresponding period in 2014, predominantly led by an increase in sales for Senyar Industries, and to a lesser extent at Aamal Readymix and Ci-Scan Trading. This six month period also saw the start of commercial production at Advanced Pipes & Casts Company. Net profit for the six months increased by over 133%, supported by an expansion in underlying profit margins.

  • TRADING AND DISTRIBUTION

QAR m

H1 2015

H1 2014

Change

Revenue

375.9

356.8

5.4%

Net profit

71.0

51.0

39.2%

Net profit margin %

18.9%

14.3%

4.6 ppts

Revenue for the Trading and Distribution division grew by over 5%, which along with an uplift in the margin, led to an increase of almost 40% in divisional net profit. Major drivers behind this excellent divisional performance were Aamal Medical and Ebn Sina Medical.

  • PROPERTY

QAR m

H1 2015

H1 2014

Change

Revenue

159.9

141.5

13.0 %

Net profit

133.8

109.0

22.8%

Net profit margin %

83.7%

77.0%

6.7 ppts

Revenue for the Property division increased by 13%, benefiting from the roll-out of Phase 1 of the redevelopment of the City Center shopping mall; together with an expansion in the margin, this  led to overall profit growth of almost 23%. City Center continues to be the flagship shopping mall in Doha and we look forward to securing the necessary permissions for Phase 2 of the redevelopment.

There were no fair value gains on investment properties during the period (H1 2014: nil).

  • MANAGED SERVICES

QAR m

H1 2015

H1 2014

Change

Revenue

32.7

40.4

(19.0)%

Net profit

2.4

5.4

(54.4)%

Net profit margin %

7.3%

13.3%

(6.0) ppts

 

Revenues for the Managed Services division dropped by 19% for the six month period compared with the corresponding period in 2014, reflecting the decision to withdraw from the low margin operations and services business and reallocate capital to more profitable opportunities. This withdrawal contributed to a decline in divisional margin and fall in net profit.

SUMMARY AND OUTLOOK

H.E. Sheikh Mohamed Bin Faisal Al Thani, Vice-Chairman of Aamal, commented: “The first six months of 2015 has seen Aamal go from strength to strength, consolidating and enhancing our existing market leading positions. We have grown both our revenues and our profitability, with underlying net profit margins rising to 17.1%, up from 14.6% for the corresponding period in 2014. It is this inherent focus on identifying and then maximising opportunities for the benefit of our stakeholders and for the State of Qatar itself which fills me with great optimism and excitement for the journey ahead.”

Tarek M. El Sayed, Managing Director of Aamal, commented: “These results underline the success of Aamal’s strategy in delivering sustained, long term profitability.  We are market leaders in many sectors across the Qatari economy and this enables us to be at the forefront of the country’s development as we continue to develop and meet increasing demand for high quality products and services areas, either through organic growth or in collaboration with world class partners wishing to enter the Qatari market. However, by no means are we becoming complacent and we will continue to strive to be the best in everything we do.”

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