Kuwait, April 21, 2019 — Mezzan Holding KSCP, one of the largest manufacturers and distributors of food, beverage, FMCG and pharmaceutical products in the region, held its 18th Annual General Meeting (AGM) of Shareholders today where shareholders approved the board of directors recommendation of distributing cash dividend of 16 fils per share.
During 2018, Mezzan was able to record flat revenue driven by the company’s operations in Kuwait, the food supply sector, food services and fast-moving consumer goods.
During the year, the company faced a number of headwinds driven by complex economic, regulatory and operational challenges in a number of markets where Mezzan operates, which in turn led to lower profitability, most notably the effect of a 100% excise duty on energy beverages in the United Arab Emirates. The continuity of losses in our operations in the Saudi market as well as the intensification of competition is accompanied by increased operating costs as well as higher financing costs also led to drop in profitability.
Despite challenges and on the back of a strong balance sheet Mezzan continued to invest in its capabilities and its production, storage and distribution capacities.
Mohammed Jassim Al Wazzan, Executive Vice Chairman of Mezzan said “We completed the largest capital expenditure program which we commenced about two years ago, aiming at increasing production capacities and enhancing operational efficiencies, where we have invested KD 26 million during 2017 and 2018 to spur future results.
The General Assembly elected a new board of directors from five members for a period of three years, namely Abdul Rahman Jassim Al Wazzan, Mohammed Jassim Alwazzan, Moatassem Jassim Alwazzan, Jamal Almutawa (independent) Abdelwahab Almarzouq (independent)
The General Assembly also approved the appointment of the office of the KPMG Safi Al Mutawa and Co. as External Auditor for 2019 and other items in the Agenda.
FY 2018 Financial Highlights:
- 2018 Revenue: KD207.5 million, up 1.4%
- 2018 EBITDA: KD16.4 million, down 21.8%
- 2018 Net Profit: KD7.7 million, down 40.7%
- 2018 Assets KD 217.9 million
- Shareholders’ Equity to owners of parent company KD 106.1 million
FY 2018 Financial Performance Review:
- Food Business Line:
Total Revenue for the Food Business Line reached KD155.2 million, a steady increase of 0.7% compared with the same period in 2017. The Food Business Line accounted for 74.8% of Group Revenue. The Business Line comprises the following three divisions: Manufacturing and Distribution (generating 49.0% of Group Revenue), Catering (generating 18.3% of Group Revenue) and Services (generating 7.5% of Group Revenue).
- Manufacturing and Distribution: Revenue declined 7.8%.
- Catering: FY Revenue increased by 28.8%.
- Services: FY Revenue increased by 8.1%.
- Non-Food Business Line:
Revenue reached KD52.2 million, an increase of 3.7% compared with the same period in 2017. The Non-Food Business Line accounted for 25.2% of Group Revenue. The Business Lines comprises the following divisions: FMCG and Pharmaceuticals business division (generating 22.5% of Group Revenue) and Industrials (generating 2.6%).
- FMCG and Pharmaceuticals: FY Revenue increased by 4.6%.
- Industrials: FY Industrials revenues decreased by 3.8%.
Regional Business Highlights:
- In Kuwait: FY Revenue grew by 5.4% due to strong performance in FMCG and Catering
- In UAE: FY Revenue decreased by 19.9% due to the impact of excise tax introduced in October 2017 where 2018 was the first full year of operation after introduction of such duty.
- In Qatar: FY Revenue grew by 7.1% driven by resolving supply chain issues as well as continued strong performance from catering.
- In KSA: FY Revenue declined by 18.1% as supply of chips were rerouted to Qatar and facing delay in inaugurating the new extruder manufacturing line, which came on line in the last quarter of 2018.
- In Afghanistan : FY Revenue increased by 27.9% due to increased sales in the fruits and vegetables business.
- In Jordan : FY Revenue decreased by 0.7%
- In Iraq : FY Revenue declined by 7.9%.