Mezzan Holding announces Q2 2015 financial results, reports 66.4% rise in net profit and 15.1% rise in revenue

 – As previously announced, Q2 included KD2.2 million insurance settlement gain

 

Kuwait, July 30, 2015 — 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 Q2 2015, reporting KD7.3 million in net profit, up 66.4% from Q2 2014, thus bringing its year to date earnings to KD12.8 million, representing a 45.5% increase from 2014’s first half earnings.

Q2 2015 Group Financial Results:

  • Revenue: KD51.6 million, up 15.1% from Q2 2014
  • Net Profit: KD 7.3 million, up 66.4% from Q2 2014

H1 2015 Group Financial Results:

  • Revenue: KD104.5 million, up 12.8%
  • Net Profit: KD12.8 million, up 45.5%

The earnings for the second quarter include a previously announced one-off net positive impact, after impairment, of KD2.2 million from an insurance settlement paid to Mezzan Holding, thus lifting its year to date earnings from KD10.6 million to KD12.8 million.

Mezzan Holding CEO, Garry Walsh, said: “We are pleased to report an increase of 10.1% in underlying profits for the second quarter and an increase of 14.8% in underlying profit for the first half of the year. The strong performance was the result of growth in all business divisions and a stronger retail market in the region this year due to Ramadan falling in the second quarter. The results were further enhanced this by an insurance settlement that was paid to Mezzan Holding, resulting in a net positive impact, after impairment, of KD2.2 million on our net profit, which lifted our net profit growth to 66.4% for Q2 and to 45.5% for the first half. Going forward, we are optimistic about the prospects of growth in market demand throughout the year. We are also continuing to pursue our investment program to improve and ensure the quality of our products to continue meeting our customers’ needs while maximizing shareholder value.”

Mezzan Holding was listed on the Kuwait Stock Exchange on June 11, 2015 and today’s announcement is the company’s first earnings announcement as a public company. Mezzan Holding incorporates 29 subsidiaries and is operationally structured into two primary business lines, the Food Business Line and the Non-Food Business Line. The company operates in seven countries through one or more business activities, including food manufacturing and distribution, large-scale contract catering, food services, FMCG manufacturing and distribution, and industrials.

Q2 Financial Performance Review:

  • Food Business Line: Food Business Line revenues reached KD38.9 million, an increase of 18.2% compared with the same period in 2014. Food Business Line accounted for about 75.4% of the group’s total revenue. The Food Business Line comprises the following divisions: Food Manufacturing and Distribution (generating 52.1% of Group revenue in Q2), Catering (generating 13.9% of Group revenue in Q2) and Food services (generating 9.4% of Group revenue in Q2).
    • Manufacturing and Distribution: Revenues increased 12.6%, driven by growth in our key operating units.
    • Catering: Revenues increased by 6.0%. The division has a stable outlook following the award of various long-term contracts in Qatar, Kuwait and UAE. With the new kitchen now being operational, the company would expect to see growth in its private catering business in Kuwait.
    • Services: Revenues increased by 112.2%. This is a tender business driven by one off contracts. We anticipate maintenance of the current level of business.
  • Non-Food Business Line: Non-Food Business Line revenues reached KD12.7 million, an increase of 6.9% compared with the same period in 2014. The Non-Food Business Line accounted for about 24.5% of the group’s total revenue for the quarter. The Non-Food Business Line comprises the following divisions: FMCG and Pharmaceuticals (generating 21.3% of Group revenue in Q2), and Industrials (generating for 3.2% of Group revenue in Q2).
    • FMCG and Pharmaceuticals: Revenues increased by 9.7%. Core partnerships performed in line with expectations.
    • Industrials: Revenues declined by 8.2% as KLOC continues to be in its rebuilding process. The remaining divisions have seen growth in line with expectations and supporting Mezzan Holding’s other divisions as part of the company’s vertical integration model.

H1 2015 Regional Business Highlights:

  • In UAE: Mezzan Holding completed the construction of a new Kettle Cooked Chips line with an annual production capacity of 2.1 million units. The company started selling Kettle Cooked Chips in the UAE in May.
  • In Qatar: A new water bottling production line was introduced, lifting production capacity from 23,000 bottles an hour to 56,000 bottles an hour. Combined, Mezzan Holding’s bottled water brands, Dana and Aqua Gulf, have market leadership in the bottled water category in Qatar and this investment will further strengthen this position.
  • In Kuwait:
    • A new contract-catering facility was launched, lifting the company’s catering capacity from 10,000 meals a day to 20,000 meals a day.
    • The company started distributing Starbucks Coffee chilled products to cooperative and private supermarkets as part of a distribution agreement with Arla Foods.
    • Kuwait Lube Oil company (KLOC), a fully-owned subsidiary, inaugurated a new refinery.
    • Planning permission received for a new food distribution centre.
  • In Iraq: The company launched new retail stores under the auspices of the United Nations World Food Program in Erbil and Dohuk.
  • In KSA: The company completed the construction of a new warehouse to strengthen its distribution network in the Kingdom and the Gulf region.

(ENDS)

About Mezzan Holding KSC :

Mezzan Holding KSC is 70-year old company that was listed on Kuwait Stock Exchange in the second quarter of 2015. The company is headquartered in Kuwait with direct operational activities in Kuwait, UAE, Qatar, Saudi Arabia, Iraq, Jordan, and Afghanistan through 29 subsidiaries with 7,500 employees.  The company is active in various segments of the consumer staple industry, supported by long-standing relationships with Johnson & Johnson, Olayan Kimberly-Clark, Reckitt Benckiser, General Mills, Arla Foods, Sara Lee and many other leading brands and manufacturers.  Mezzan Holding distributes over 25,000 Stock Keeping Units (SKU), making it one of the largest operators in terms of SKUs, unit sales, market share and in terms of share of revenues of total consumer spending in consumer categories served by the company. The company generates about 75% of its revenue through consumer-based retail sectors.

Investors may contact:
Mohamed Shawky | Mezzan Holding KSC | Head of Investor Relations | Telephone 00965 24812901 | Mobile 00965 98006058 | mohamed.shawky@mezzan.com

Reporters may contact:
Fawaz Al Sirri | Bensirri Public Relations | fawaz@bensirri.com | 00965 66622448

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