Kuwait, 16 May 2022: Mezzan Holding KSC, one of the largest manufacturers and distributors of food, beverage, FMCG, and pharmaceutical products in the Gulf, announced the company’s financial results for the first quarter ended 31 March 2022.
Q1 2022 Financial Highlights:
- Revenue: KD 72.5 million, down 1.2%
- Operating Profit: KD 3.9 million, down 39.5%
- EBITDA: KD 6.2 million, down 28.3%
- Net Profit to Parent Company Shareholders: KD 2.9 million, down 40.7%
Mezzan Holding Executive Vice Chairman, Mohammad Jassim Al Wazzan, said: “For the first quarter, we delivered strong revenue, which reflects our presence in growing, extensive categories and the investments we have made towards bolstering Mezzan’s position across the various markets we operate in. However, our profitability dropped as a result of higher input costs, namely supply chain inflation, blended and flat selling pricing in Kuwait, resulting in lower gross margins. Looking ahead, we will continue to focus on productivity and improving our revenue management capabilities, while also continuing to make the necessary long-term investments to fortify our businesses across all business lines and geographies.”
Mezzan Holding CEO, Garrett Walsh, said: “The war in Ukraine has caused severe challenges and setbacks in global and regional economic prospects, which were already strained by Covid-related supply chain issues. That said, consumer demand is very healthy across most of our business lines and markets, evident by the company’s Q1 top line results coming in slightly lower than the exceptional Q1s of the last two years. Price adjustments is a key theme for the first half of the year, and we are in line with price adjustments in all markets, except in Kuwait, our biggest market, where our pricing remained unchanged due to the extension of Covid-related regulatory pricing caps. We hope these caps to be eased soon, which will positively impact our profitability in the future.”
Q1 2022 Financial Performance Review:
- Food Business Line:
Total Revenue for the Food Business Line reached KD 45.8 million, an increase of 2.7% compared with Q1 2021. The Food Business Line accounted for 63.2% of Group Revenue. The Business Line comprises the following three divisions: Manufacturing and Distribution (generating 49.9% of Group Revenue), Catering (generating 9.4% of Group Revenue), and Services (generating 4% of Group Revenue).
- Manufacturing and Distribution: revenue increased by 7.2%.
- Catering: revenue decreased by 7.6%.
- Services: revenue decreased by 18.3%.
- Non-Food Business Line:
Revenue reached KD 26.7 million, a decrease of 7.3% compared with Q1 2021. The Non-Food Business Line accounted for 36.8% of Group Revenue. The Business Lines comprises the following divisions: FMCG and Pharmaceuticals business division (generating 34.8% of Group Revenue) and Industrials (generating 2% of Group Revenue).
- FMCG and Pharmaceuticals: revenue decreased by 8%.
- Industrials: revenue increased by 5.7%.
Regional Business Highlights in Q1 2022:
- In Kuwait: revenue decreased by 4.8% mainly due to the decline in food, catering and FMCG business lines.
- In UAE: revenue increased by 21.7% as food manufacturing and distribution business lines improved in UAE.
- In Qatar: revenue increased by 4.1% as food distribution and catering business lines improved.
- In KSA: revenue increased by 36% as Mezzan continues to expand its product presence in new channels, and the improvement in the food distribution business line.
- In Jordan: revenue increased by 11% due to improving Mezzan’s logistics operations as well as adding new products in the country.
- In Iraq: revenue increased by 2.4% despite the decline in business activities caused by U.S troop’s withdrawal from Iraq.