• Board recommends a cash dividend of 15 fils per share for the year

Kuwait, April 9, 2020 — 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 2019.

FY 2019 Financial Highlights:

  • Revenue: KD222.5 million, up 7.2%  
  • Operating Profit: KD 12.6 million, up 20.3% 
  • EBITDA: KD18.5 million, up 18.5%
  • Net Profit: KD 6.3 million, down 5.0%
  • Net Profit to Parent Company Shareholders: KD5.6 million, down 19.0%

Mezzan recorded healthy revenue growth driven by its fast-moving consumer goods and healthcare sector, as well as the food services sector, and food manufacturing and distribution.

The group’s revenue increase was also accompanied by enhancement of Gross Profit, Operating Profit, as well as Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA). 

Despite the improvement in operational results, Net Profit were affected by a number of non-cash and non-recurring losses, namely, a non-cash loss due to the reduction in value of goodwill of KWD1.2 million and another KWD 1.2 million non-cash loss due to reduction of value of other intangible assets derived from the accounting re-classification of a property given application of IFRS 16 in 2019 and IAS 38.

During 2019, the group recorded non-cash and non-recurring losses for an aggregate value of KD2.4 million. These relate to impairment of goodwill in an investment in a subsidiary in Saudi Arabia for approximately KD1.2 million and an impairment of other intangible assets driven by reclassification of a property resulting from the application of IFRS 16 (which started in 2019) and IAS38. 

Excluding these non-cash losses, Net Profit would have reached KD 8.6 million and Net Profit attributable to Equity Holders of the Parent Company would have reached KD 7.9 million or up by 12% and 14.4% from restated 2018 results.

Mezzan Holding Executive Vice Chairman Mohammad Jassim Al Wazzan said: “2019 witnessed the achievement of a long term transformational goal for our healthcare business, to include production of pharmaceutical products, through an acquisition. Expand the scale and scope of our healthcare practice. Mezzan was also successful in enhancing its revenue and operational profits but net profit was reduced due to non-cash non-recurring losses (impairment of intangible assets). 

He added ”I would like to thank the group’s employees and workers who are working around the clock now to secure food and medicine under the current circumstances”.

Garett Walsh, CEO of Mezzan Holding added “We are still focused on restoring performance in our operations. We have taken many measures to increase top line and enhance operational efficiency, and have started seeing the operational results improve, but there is more to achieve from our asset base in the near future.We have put new plans to enhance results in our operations in KSA”.

FY 2019 Financial Performance Review:

Food Business Line

Total Revenue for the Food Business Line reached KD160.4 million, an increase of 3.4% compared with the same period in 2018. 

The Food Business Line accounted for 72.1% of Group Revenue. The Business Line comprises the following three divisions: Manufacturing and Distribution (generating 48.4% of Group Revenue), Catering (generating 16.0% of Group Revenue) and Services (generating 7.8% of Group Revenue). 

Manufacturing and Distribution: Revenue increased 5.8%.

Catering: FY Revenue decreased by 6.1%. 

Services: FY Revenue increased by 10.8%.

Non-Food Business Line

Revenue reached KD62.0 million, an increase of 18.9% compared with the same period in 2018. The Non-Food Business Line accounted for 27.9% of Group Revenue. 

The Business Lines comprises the following divisions: FMCG and Pharmaceuticals business division (generating 25.6% of Group Revenue) and Industrials (contributing 2.3%).

FMCG and Pharmaceuticals: FY Revenue increased by 21.9% fueled by KSPICO acquisition and Medtronics JV 

■ Industrials: FY Industrials revenues decreased by 6.9%.

Regional Business Highlights:

  • In Kuwait: FY Revenue grew by 6.9% due to strong performance in FMCG and healthcare segment spurred by acquisitions.  
  • In UAE: FY Revenue increased by 8.4% as recovery seen in energy drink sales following Excise Duty Implementation as well as increased production and sales of potato chips and snacks lines 
  • In Qatar: FY Revenue grew by 5.1% driven by catering business and chops and snacks lines 
  • In KSA: FY Revenue increased by 13.5% as Mezzan continues to expand its distribution reach
  • In Afghanistan: FY Revenue increased by 23.1% due to increased sales in the fruits and vegetables business.
  • In Jordan: FY Revenue decreased by 3.3%
  • In Iraq: FY Revenue increased by 14.3%