Mezzan Holding Reports FY 2018 Financial Results

Board recommends a cash dividend of 16 fils per share for the year

  • 2018 Revenue: KD207.5 million
  • 2018 EBITDA: KD16.4 million
  • 2018 Net Profit to Parent Company Shareholders: KD7.7 million

Kuwait, March 21, 2019 — 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 FY 2018.

Mezzan continued to record stable revenues in 2018 driven by strong operations in Kuwait as well as Food Catering, Food Services, and Non-food FMCG business segments despite a challenging year for the sector, while investing in the development of production capacities and warehousing infrastructure to drive revenue growth, as well as enhancing productivity and operational efficiency.

 

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%

The above 2018 results are based on IFRS 15 and 9 accounting standards, which came into effect in January 2018. However, 2017 figures were not restated to reflect the changes in the standards. Therefore a like-for-like comparison would show an increase of 3.7% in revenue, a 21.1% decrease in EBITDA, and a 39.9% decline in net profit attributable to Equity Holders of the Parent Company.

Mezzan Holding Executive Vice Chairman Mohammad Jassim Al Wazzan said:

“This years’ results were affected by significant challenges in a number of the Group’s geographies. We witnessed strong revenues but also a decline in profits following recent reforms in regulatory and tax policies in the region that impacted consumer behavior.

He added “We maintain our focus on becoming a regional player with leading positions in each of the categories we operate. We invested substantially over the last two years in our production capacities and warehousing infrastructure as well to diversify revenues, increase productivity and build on for a better future in the short-term and long-term.”

Garett Walsh, CEO of Mezzan Holding added “We are focused on restoring performance in our operations and growing our business. We have rationalized our operating costs in the UAE towards the end of last year to counter the effect of the excise duty, and have invested behind our business in Saudi to help restore performance.

We are confident in our future of our core business. Our capital expenditure over the last two years aimed at adding new production lines in our core sectors and others aimed at enhancing efficiencies going forward.”

 

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%.

 

(ENDS)