Mezzan Holding Reports Q3 2016 Financial Results

  • 3.6 % rise in Revenues for the nine months ended September 30, 2016, with revenue growth in Kuwait, Qatar, and Jordan
  • Strong performance in Food Manufacturing and Distribution business primarily driven by Mezzan Brands in Kuwait and regionally
  • 9-month net profits reach KD13.5 million

 

Kuwait, November 9, 2016 — 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 Q3 2016.

Third quarter revenue was up 3.0% as it stood at KD47.7 million, bringing the total revenue for the first three quarters of the year to KD156.2 million, an increase of 3.6% over the same period last year.

The Company’s overall performance in Q3 comes in line with management expectations given prevailing challenging macro-economic environment in some of the markets in which the company operates. Financial results for the 9-month period ended 30 September 2016 were supported by growth in revenues of Food manufacturing & distribution segment by 7.3% on the back of increased production and new business. Profitability was supported by Food manufacturing & distribution and Non Food Fast Moving Consumer Goods Groups which compensated for pressure from the Catering business. The company’s profitability for the quarter was also impacted by expected operational losses from newly acquired Al Safi Foods (now rebranded to Mezzan Foods KSA). The strategic acquisition in the Kingdom of Saudi Arabia was executed in Q3’16 and is currently undergoing a successful turn-around involving various business optimization initiatives and the introduction of new SKUs into the Saudi market.

Underlying net profit for the quarter was KD3.1 million, representing a 3.5% increase from the same period last year. As a result of a strong quarter, the company was able to counter the decline in catering revenues that was seen earlier in the year. Mezzan Holding’s year-to-date underlying net profit stood at KD13.5 million, representing a subtle decline of -0.7% from the same period last year.

Mezzan Holding CEO, Garry Walsh, said: “Our year-to-date performance is inline with our previously announced outlook with the exception of the expected impact on our bottom-line by Mezzan Foods KSA, which is undergoing a turnaround plan and performing above expectations. Our market outlook for the next four quarters is conservative given the predominant market dynamics, however being a consumer company with 80% of our portfolio comprises consumer and household staples we are well positioned to continue our healthy performance in this resilient and defensive sector.”

 

YTD (nine months) 2016 Financial Highlights:

  •   Revenue: KD156.2 million, up 3.6%
  •   Underlying Net Profit: KD13.5 million, down 0.7%*
  •   Reported Net Profit attributable to Equity holders of the Parent Company: KD13.1 million, down 18.7%

*2015 Underlying Net Profit is adjusted for a non-recurring gain of KD2.2 million from net insurance proceeds recorded in Q2 2015.

 

Q3 2016 Financial Highlights:

  •   Revenue: KD47.7 million, up 3%
  •   Underlying Net Profit: KD3.1 million, up 3.5 %
  •   Reported Net Profit attributable to Equity holders of the Parent Company: KD 3.1 million, down 14.5%

 

YTD (nine-month 2016) Financial Performance Review:

  • Food Business Line:  The Food Business Line generated KD114.0 million in Revenue, or 73.0% of Group Revenue, representing an increase of 4.5% compared with the same period in 2015. The Business Line comprises three divisions, and they are Manufacturing and Distribution (52.3% of Group Revenue), Catering (12.3%), and Food Services (8.5%).
  • Non-Food Business Line: The Non-Food Business Line generated KD42.0 million during the period, or 27.0% of Group Revenue, representing an increase of 0.8% compared with the same period in 2015. This Business Line comprises two business divisions, and they are FMCG and Pharmaceuticals (24.2% of Group Revenue), which grew by 2.4%, and Industrials (2.8% of Group Revenue), which declined by 11.3% % in the period.
  • Regional Business Highlights: Mezzan Holding operates in seven countries, with over 90% of revenue generated in Kuwait (66.8%), UAE (16.3%) and Qatar (9.3%). In Kuwait, revenues grew by 3.8%, in UAE revenues were slightly down by 3.9%, and in Qatar revenues grew by 12.4%. The company also saw revenue growth of  28.2% in Jordan, contributing  4.6% to of the Group’s total revenue for the period.

(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