Kuwait, August 11, 2020 – Mezzan Holding KSC, one of the largest manufacturers and distributors of food, beverage, FMCG and healthcare in the Gulf, today announced the company’s financial results for Q1 and Q2 2020.
- Revenue: KD134.3 million, up 16%
- EBITDA: KD 15.8 million, up 23%
- Net Profit: KD 9 million, up 24%
- Net Profit to Parent Company Shareholders: KD 8.1 million, up 11%
Mezzan managed to achieve healthy revenue growth driven by both food and non-food segment activity, from organic and inorganic activities.
The group’s strong revenue growth was also accompanied by enhancing profitability margins such as gross profit margin, EBITDA margin and net income margin. These were achieved due to higher volumes, economies of scale, and operating leverage.
Profits in H1’20 increased on the back of increased scale of operations, economies of scale and hence increasing profit margins as well as impact of operating leverage.
It is key to note that Covid-19 resulted in both opportunities as well as challenges to various operations within the group. Operations in Kuwait witnessed growth driven by inorganic as well as organic activities as well as opportunities. However, there were declines in UAE operations as a result of soft demand from the Food Service Segment as well as in Qatar given timed interruption of operations. Finally, during H1’20, the group incurred COVID related expenses of expenses of approximately KWD600 thousand.
Mezzan’s Executive Vice Chairman stated: “COVID-19 presented great opportunities and challenges for companies operating in various sectors, and being one that operates in a defensive segment, Mezzan succeeded in balancing the opportunities to overcome the challenges we faced recently.”
He added “I would like to thank Mezzan’s employees and workers as well as various regulatory authorities who enabled us to work around the clock to provide food and medicine with limited interruption under the current circumstances.”
Garett Walsh, CEO of Mezzan Holding added : “We are happy to see our organic and inorganic growth initiatives yield positive results, on both topline and profitability. The growth in core segments of Food and Healthcare are a testament to both the defensive nature of our operations as well as the growth initiatives we have taken recently. Finally, I echo our Vice Chairman’s gratitude to authorities and employees who worked twenty four seven to provide consumers with necessities throughout this time.”
H1 2020 Financial Performance Review:
Food Business Line:
Total Revenue for the Food Business Line reached KD 89.9 million, an increase of 9.5% compared with the same period in 2019. The Food Business Line accounted for 66.9% of Group Revenue. The Business Line comprises the following three divisions: Manufacturing and Distribution (generating 46% of Group Revenue), Catering (generating 14.3% of Group Revenue) and Services (generating 6.7% of Group Revenue).
- Manufacturing and Distribution: Revenue increased 10%.
- Catering: Revenue increased by 7.5%.
- Services: Revenue increased by 10%.
Non-Food Business Line:
Revenue reached KD 44.4 million, an increase of 34.8% compared with the same period in 2019. The Non-Food Business Line accounted for 33.1% of Group Revenue. The Business Lines comprises the following divisions: FMCG and Pharmaceuticals business division (generating 31.5% of Group Revenue) and Industrials (contributing 1.5%).
- FMCG and Pharmaceuticals: FY Revenue increased by 39.6% inorganic growth as well as opportunities of the heritage portfolio
- Industrials: FY Industrials revenues decreased by 21%.
Regional Business Highlights in H1 2020
- In Kuwait: Revenue grew by 23.6% due to strong performance in FMCG and the healthcare segment spurred by acquisitions.
- In UAE: Revenue decreased by 2.4% as impacted by lower food service activity
- In Qatar: FY Revenue decreased by 5.7% driven by timed interruption of some operations
- In KSA: Revenue increased by a mere 0.5%
- In Afghanistan: Revenue increased by 0.1%
- In Jordan: Revenue increased by 6.5%
- In Iraq: Revenue increased by 71.2% driven by the food services segment.