Mezzan Holding Reports Full-Year 2023 Results

Mezzan Holding Reports Full-Year 2023 Results

  • The board recommends a cash dividend of 20 fils per share for the year.
  • Company to hold an earnings call to discuss results on Tuesday, 12th of March 2024 at 2:00 pm Kuwait Time. 

Kuwait, 10 March 2024: Mezzan Holding KSC, one of the largest manufacturers and distributors of food, beverage, FMCG, and pharmaceutical products in the Gulf, announced the company’s Q4 and FY2023 financial results.

FY 2023 Highlights:

  • Revenue: KD 271.2 million, up by 6.3%.
  • Operating Profit KD 18.9 million, up by 1137.1%.
  • EBITDA: KD 27.9 million, up by 141.1%.
  • Net Profit to Parent Company Shareholders: KD 11.5 million, representing a KD 13.5 million turnaround from FY2022’s net loss of KD 2.0 million. 

Q4 2023 Highlights:

  • Revenue: KD 65.6 million, up by 8.2% from Q4 2022.
  • Operating Profit KD 5.5 million, up 3.2% from Q4 2022.
  • EBITDA: KD 8.1, down by 4.9% from Q4 2022
  • Net Profit to Parent Company Shareholders: KD 3.4 million, down by 26.3% from Q4 2022.

Mezzan Holding Vice Chairman, Mohammad Jassim Al Wazzan, said: “The year 2023 was a turn-around year for Mezzan Holding. The team successfully overcame the challenges of 2022, and created a more robust operation across all business lines. We look to maintain our performance in 2024 and build on the success of last year.”

Mezzan Holding CEO, Garrett Walsh, said: “Mezzan’s business model has once more demonstrated its robust capacity for recovery and bottom line improvement. In Kuwait, where we historically generate over 70% of the group’s revenue, strategic adjustments were applied to our business in 2022 and 2023 to fuel our bottom-line turn-around. The emphasis remains on these core areas, leveraging our core competencies and resources to foster growth. Additionally, our operations in Jordan and KSA have yielded exceptional results, underpinned by an enhanced focus on distribution and market penetration. The UAE has continued to exhibit solid performance, particularly within the energy drinks and bottled water distribution channels.”

FY 2023 Financial Performance Review: 

  • Food Business Line:

Revenue stood at KD 178.2 million, reflecting an increase of 1.8% compared to 2022. The Food Business Line accounted for 65.7% of Group Revenue. The Business Line comprises the following three business divisions: Food Manufacturing and Distribution (generating 52.8% of Group Revenue), Catering (generating 7.8% of Group Revenue), and Services (generating 5.2% of Group Revenue).

  • Manufacturing and Distribution: revenue increased by 8.4%. Across the board, the Food Manufacturing and Distribution segment witnessed notable enhancements, with Kuwait emerging as a standout. In this market, the reach of Mezzan established brands soared to new levels.
  • Catering: revenue declined by 29.4%. The decline observed in the revenue of the Catering segment can be primarily attributed to the strategic decision to terminate contracts that were not profitable, thereby concentrating efforts on ventures within the catering domain that ensured profitability. Additionally, a significant contribution to the inflated revenue figures for the Q4 of 2022 was due to a contract with FIFA, which was an exceptional event. Consequently, when comparing the revenue for Q4 2023 to that period, a noticeable reduction is observed, largely owing to the singular nature of the FIFA contract.
  • Services: revenue increased by 6.7%. Supported by the service contracts we secured with the UN and its affiliates over the past few years in Jordan and Iraq.
  • Non-Food Business Line:

Revenue stood at KD 92.9 million, representing a solid growth of 16% compared to 2022 full-year revenue for the Non-Food Business Line. The Non-Food Business Line accounted for 34.3% of Group Revenue. The Business Line comprises the following divisions: FMCG and Healthcare business division (generating 31.9% of Group Revenue) and Industrials (generating 2.4% of Group Revenue).

  • FMCG and Healthcare: Revenue increased by 17.1%. A surge fueled by the stellar performance of Mezzan’s pharmaceutical manufacturing operations. This success enabled a significant expansion of exports to the KSA market.
  • Industrials: Revenue grew by 2.8% due to the success of the plastic manufacturing operations, primarily in Kuwait, alongside the lube oil production line.

FY 2023 Regional Business Highlights:

  • In Kuwait: Revenue increased by 9.8%, Kuwait excelled in the Food Manufacturing & Distribution, along with the FMCG & Healthcare divisions showing impressive performance too.
  • In UAE: Revenue grew by 1%. The group made a strategic shift, moving its chilled meat production from the UAE to Kuwait. This transition had its challenges, leading to a slight decrease in the Food segment’s revenue. However, the silver lining was in the energy drinks and bottled water distribution segments, which saw outstanding performance in 2023. This success helped counterbalance the food sector’s downturn.
  • In Qatar: Revenue declined by 16.2%. The revenue dip was mostly seen in the Catering segment within Qatar, largely because the previous year’s contract with FIFA was a unique, one-time revenue boost.
  • In KSA: Revenue increased by 2.1%. In Q3 2023, Mezzan decided to relocate part of its Salty Snacks production to KSA. The group is bullish on the opportunities in this market, and strengthening Mezzan’s footprint in the kingdom aligns well with the ongoing and dynamic changes within KSA. 
  • In Jordan: Revenue increased by 16.6%, majorly fueled by the effective distribution of KITCO. This growth was complemented by the establishment of new accounts and an expanded network. Furthermore, the Food Services sector contributed to this upward trend through the service contracts with the UN and its partner organizations.
  • In Iraq: Revenue increased by 6.9%, due to the Food Service segment performance.