Mezzan Holding Reports FY 2017 Financial Results

Board recommends a cash dividend of 22 fils per share for the year with a total payout of KD6.8 million

  • FY Revenue: KD204.5 million
  • FY EBITDA: KD20.9 million  
  • FY Net Profit: KD12.9 million

 

Kuwait, March 18, 2018 — 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 the year 2017.

The company’s maintained its revenue performance despite a challenging economic environment, a testament to its defensive product offering and strong fundamentals. The year presented numerous unanticipated one-off external factors that challenged profitability but also helped identify areas for further improvement.

Despite those challenges, and on the back of a strong balance sheet and enhanced working capital position, Mezzan invested in value-add projects  including capacity enhancements, value chain improvements, warehouse infrastructure, as well as branding all aimed at driving future growth and enhance  efficiencies.


FY 2017 Financial Highlights:

  • Revenue: KD204.5 million, down 1.4%
  • EBITDA: KD20.9 million, down 15.5%
  • Underlying Net Profit: KD12.9 million, down 26.6%
  • Reported Net Profit attributable to Equity holders of the Parent Company: KD12.9 million, down 24.7%

Mezzan Holding Executive Vice Chairman Mohammad Jassim Al Wazzan said: “2017 proved to be a challenging year; where Mezzan was faced with a number of one-off unanticipated challenges. However, we maintain our focus on strengthening our regional presence with leading positions in each of the our categories. The year 2017 witnessed the highest capital expenditure year on record, and we expect these investments to grow our profitability in 2018 and beyond.”

Garett Walsh, CEO of Mezzan Holding added “Disruptions to our supply chain in Qatar and temporary halt of operations in Afghanistan ultimately dragged on our profitability in 2017. We have taken the necessary steps to recover from these external factors. We are confident of our future, as our core business continues to prove its resilience, with our  Food Manufacturing and Distribution division showing modest topline growth despite the headwinds. Our capital spending added production capacities in our core sectors, and others, will enhance efficiencies going forward.”


FY 2017 Financial Performance Review:

Food Business Line: The Food Business Line accounted for 75.4% of Group Revenue. The Business Line comprises the following three divisions:  Manufacturing and Distribution (generating 53.9% of Group Revenue), Catering (generating 14.4% of Group Revenue) and Services (generating 7.0% of Group Revenue). Total Revenue for the Food Business Line reached KD154.2 million, a slight decrease of 0.7% compared with the same period in 2016.

Manufacturing and Distribution: Revenue increased 1.0%.

Catering: FY Revenue increased by 10.2%.

Services: FY Revenue declined by 25.7%.


Non-Food Business Line: The Non-Food Business Line accounted for 24.6% of Group Revenue. The Business Lines comprises FMCG and Pharmaceuticals business division (generating 21.8% of Group Revenue) and Industrials (generating 2.8%). Revenue reached KD50.3 million, a decrease of 3.3% compared with the same period in 2016.

FMCG and Pharmaceuticals: FY Revenue decreased by 3.7%.

Industrials: FY Industrials revenues decreased by 0.4%.


Regional Business Highlights:

In Kuwait: FY Revenue grew by 1.8% due to steady performance as the local retail market returns to buoyancy.

In UAE: FY Revenue decreased by 12.7% due to lower exports to Qatar and the impact of excise tax introduced in October 2017.

In Qatar: FY Revenue grew by 3.2% driven by resolving supply chain issues putting sales and profitability back on track.

In KSA: FY Revenue grew by 243.5% as Mezzan continues to focus on gaining a foothold in the region’s largest consumer market.

In Jordan : FY Revenue decreased by 44.8% due to challenges to tenders driven business.

In Afghanistan : FY Revenue decreased by 16.1% as operations were suspended for three months. The situation was resolved in August

In Iraq : FY  Revenue grew by 34.3%.

 

(ENDS)

About Mezzan Holding:

■ Operates in seven countries through 29 subsidiaries with 7,500 employees

■ 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

■ 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

■ Serves over 100,000 meals a day in Kuwait, Qatar and the UAE through its catering business

■ Has a total of 130,000 square meters in food, beverage and FMCG manufacturing facilities in Kuwait, Qatar, UAE and Afghanistan

■ Leverages long-standing relationships with private and cooperative supermarkets

■ Vertically integrated into complementary business operations, including packaging, catering, contract services and logistics

■ Food services customers include multinational fast food chains, airline catering services and large food services companies.

Mezzan Holding is 70-year old company that was listed on Kuwait Stock Exchange in the second quarter of 2015. The company headquartered in Kuwait with direct operational activities in Kuwait, UAE, Qatar, Saudi Arabia, Iraq, Jordan, and Afghanistan.

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For more information, please contact:

Fawaz Al-Sirri | +965 66622448 | fawaz@bensirri.com