FULL YEAR 2017 RESULTS 1 Contents Key Full Year 2017 - - PowerPoint PPT Presentation

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FULL YEAR 2017 RESULTS 1 Contents Key Full Year 2017 - - PowerPoint PPT Presentation

Oct 29, 2022 180 likes •370 views

AAMAL COMPANY Q.P.S.C. FULL YEAR 2017 RESULTS 1 Contents Key Full Year 2017 developments Financial Summary Segmental Review Summary and Outlook Additional information (breakdown by Segments) 2 Key FY 2017

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AAMAL COMPANY Q.P.S.C. FULL YEAR 2017 RESULTS

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SLIDE 2

Contents

  • Key Full Year 2017 developments
  • Financial Summary
  • Segmental Review
  • Summary and Outlook
  • Additional information (breakdown by Segments)

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Key FY 2017 developments

  • Growth momentum maintained
  • Earnings per share up 9.6%
  • Dividend of QAR 0.60 a share proposed
  • Equivalent to 6% of paid-up share capital
  • Subject to approval at the AGM, 22 April 2018
  • Qatar’s response to the embargo
  • Despite the challenges created, Qatar is proving its robustness
  • Testimony to the resilience of the Qatari economy and its people, combined with strong

and stable national leadership

  • Aamal’s response to the embargo
  • Practical and resourceful
  • Strength through diversity
  • Investing for future growth
  • First mover advantage, able to move quickly and decisively
  • Significant financial firepower
  • Allied to organic growth and partnership opportunities

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Financial Summary

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QARm FY 2017 FY 2016 % change

Revenue 1,604.2 2,829.1 (43.3)% Net profit before share of net profit of associates and joint ventures accounted for using the equity method and FV gains on investment properties 421.0 499.2 (15.7)% Net underlying profit margin % 26.3% 17.6% +8.7 ppts Share of net profit of associates and joint ventures accounted for using the equity method 102.0 60.2 +69.4% Fair value gains on investment properties 0.0 0.9 (100.0)% Total Company net profit 523.1 560.2 (6.6)% Less: non controlling interests (22.1) (98.0) (77.4)% Attributable to Aamal shareholders 500.9 462.3 +8.3% Earnings per share (QR) 0.80 0.73 +9.6%

  • YoY comparisons

distorted due to change in consolidation April 1 2017 (effects will reverse Q1 2019)

  • Eps most relevant

performance indicator, up 9.6%

  • Excellent result against

challenging backdrop

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Sales breakdown

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  • Up to 2017, Industrial

Manufacturing steadily increased its share of overall revenue, driving Aamal’s growth

  • Change in accounting treatment

adversely distorts 2017 year-on- year comparison  Senyar Industries and

Advanced Pipes and Casts Industries now equity accounted for, so their revenue contributions are excluded

  • Industrial Manufacturing

continues to be the principal driver to Aamal’s growth, profitability and shareholder return

59.4% 53.0% 60.8% 64.0% 36.2% 27.6% 34.1% 27.0% 23.0% 39.4% 12.3% 13.5% 11.3% 11.2% 20.0% 4.1% 3.0% 2.4% 3.4% 6.1%

  • 3.4%
  • 3.6%
  • 1.5%
  • 1.7%
  • 1.7%

2,122.6 2,139.1 2,882.0 2,829.2 1,606.2

  • 100

300 700 1,100 1,500 1,900 2,300 2,700 3,100 2013 2014 2015 2016 2017

QAR million

Total Revenue (by Segment)

Industrial Manufacturing Trading and Distribution Property Managed Services less: inter-divisional revenue

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  • Up to 2017, Industrial

Manufacturing steadily increased its share of

  • verall net profit (as with

revenue), again driving Aamal’s growth

  • Industrial Manufacturing’s

share fell back to 32.1% in 2017

 reflection of supply sourcing issues due to the continuing blockade; now largely resolved

Net profit breakdown

8.5% 14.8% 24.8% 37.6% 32.1% 32.4% 33.0% 28.2% 21.4% 22.2% 75.1% 64.1% 52.8% 46.2% 51.3% 1.9% 2.4% 1.1% 1.8% 1.3%

  • 17.9%
  • 14.3%
  • 6.9%
  • 7.0%
  • 6.9%

267.2 348.5 521.4 559.4 523.0

  • 100

100 200 300 400 500 600 2013 2014 2015 2016 2017

QAR million

Net profit, ex-FV gains (by Segment)

Industrial Manufacturing Trading and Distribution Property (ex-FV gains) Managed Services less: Head Office costs

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Rising profitability

  • nb. consolidated net profit margins exclude equity accounted for profits,

along with any fair value gains on investment properties

  • Net profit margins have

been on a steadily rising trend over the years

  • However, 2017 gain

distorted by change in the consolidation method of two industrial manufacturing entities (lower than company average margins)

248.7 330.4 478.9 499.2 421.0 18.5 18.1 42.4 60.2 102.0

267.2 348.5 521.3 559.4 523.1

11.7% 15.4% 16.6% 17.6% 26.3% 8.0% 12.0% 16.0% 20.0% 24.0% 28.0% 100 200 300 400 500 600 2013 2014 2015 2016 2017

% margin QAR million Axis Title

Net profit (ex-FV gains) and margin %, for fully consolidated operations

Fully consolidated profits Equity accounted for profits Margins % (RHS)

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Segmental review – Industrial Manufacturing

QARm FY 2017 FY 2016 % change

Revenue 582.2 1,811.7 (67.9)% Net profit - fully consolidated activities 71.2 156.5 (54.5)% Net underlying profit margin % 12.2% 8.6% +3.6 ppts Share of net profit of associates and joint ventures accounted for using the equity method 96.6 53.9 +79.2% Total net profit 167.8 210.4 (20.2)%

  • Year-on-year comparisons distorted by change in accounting presentation (hard to make valid y-o-y

comparisons)

  • Most relevant figure is total net profit, fell 20.2% y-o-y: due to delays with sourcing raw materials and fulfilling

customer orders on account of the continuing blockade  issues now largely rectified with alternative sourcing and expansion of warehouse storage facilities

  • Launch of three major new industrial projects in January 2018, due to come onstream by end 2018 and 2019

 will be first of their kind in Qatar, Aamal to become the only integrated cable manufacturer

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Segmental review – Trading & Distribution

QARm FY 2017 FY 2016 % change

Revenue 633.3 649.9 (2.5)% Net profit 116.2 119.8 (3.0)% Net profit margin % 18.3% 18.4% (0.1) ppts

  • Marginal decline in revenues leading to small decline in net profit (margins flat)
  • Ebn Sina Medical

 increase in sales due to new agreements signed with leading international pharma  established alternative sources of supply, expanded domestic warehouse capacity and automated many internal processes

  • Aamal Medical

 drop in sales more than offset by margin expansion  rotation into higher margin businesses at expense of lower margin

  • Aamal Trading and Distribution

 expansion of operations:

  • pened two “First Stop” automotive centers
  • introduced “Dial a Tire Service”
  • launched Qatar’s first Bridgestone Fleet Point Center
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Segmental review – Property

QARm FY 2017 FY 2016 % change

Revenue 320.9 317.9 +1.0% Net profit - fully consolidated activities 262.6 252.1 +4.2% Net underlying profit margin % 81.8% 79.3% +2.5 ppts Share of net profit of associates and joint ventures accounted for using the equity method 5.5 6.3 (13.3)% Total net profit 268.1 258.4 +3.8%

  • City Center Doha

 remains Doha’s premier shopping mall  strengths all too evident against a weaker consumer backdrop, prime location in West Bay  Phase 2 expansion works on track and within budget (completion expected later this year)

  • Aamal Real Estate

 rise in both sales and margins  expansion plans

  • 63 residential apartment building due for completion Q3 2018, on track and within budget
  • purchase of three residential compounds early 2018, all in prime Doha locations
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Segmental review – Managed Services

QARm FY 2017 FY 2016 % change

Revenue 95.3 97.4 (2.2)% Net profit 7.0 9.8 (28.1)% Net profit margin % 7.3% 10.1% (2.8) ppts

  • Marginal decline in revenue matched with significant margin contraction led to 28.1% fall in net profits
  • Aamal Travel

 strategic decision to focus on cash sales to minimise risk of defaults  signs of recovery vis à vis economic blockade (“staycations” and international pushing of Qatar’s tourism credentials)

  • ECCO Gulf

 revenue growth helped to offset contraction at Aamal Travel  expansion of existing activities (banking and government sectors), entered new sectors (retail and technology)  scale becoming increasingly important (cost to serve, breadth of service offering)

  • Aamal Services

 strategy to improve sales mix through newer and higher margin contracts (flat revenues, 2x net profits)

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Capex and Financing

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  • Net capital expenditure easily and consistently covered by operating cash flow, resulting in

positive free cash flow either retained for subsequent reinvestment into the business and/or distributed by way of dividends

  • Net financial gearing on downward trend, net cash position end-2017

156.1 91.8 114.6 128.0 106.5 355.5 220.0 768.7 228.8 388.1 200 400 600 800 1000 2013 2014 2015 2016 2017

QAR million

Net capex vs. operating cash flow

Net Capex Operating cash flow 6.4% 4.4% 3.6% 2.3%

  • 1.4%
  • 2%
  • 1%

0% 1% 2% 3% 4% 5% 6% 7% 2013 2014 2015 2016 2017

Net debt / total capital

Net financial gearing

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Summary and Outlook

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  • Very strong performance from Aamal despite obvious headwinds
  • Qatar has responded well to the challenges presented
  • Aamal is at the heart of this national resilience
  • Exposure across the economic spectrum, market leading positions
  • Quick to adapt and identify opportunities ahead of others
  • Significant financial firepower
  • Well positioned for future growth
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SLIDE 14

Any further questions?

Please contact: Aamal Company

Mohammad Ramahi (Chief Financial Officer) mohd.ramahi@aamal.com.qa Arwa Goussous (Corporate Communications Manager) arwa.goussous@aamal.com.qa Arwa Hamdieh (Investor Relations and Compliance Manager) arwa.hamdieh@aamal.com.qa T: +974 4422 3888 www.aamal.com.qa Financial PR/IR advisers Nick Cox-Johnson nick.cox-johnson@citigatedewerogerson.com T: +44 20 7638 9571 www.citigatedewerogerson.com

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APPENDIX BREAKDOWN BY SEGMENT

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Group results - revenue by segment

QARm FY 2017 FY 2016 Change %

Industrial Manufacturing* 582.2 1,811.7 (67.9)% Trading and Distribution 633.3 649.9 (2.5)% Property 320.9 317.9 +1.0% Managed Services 95.3 97.4 (2.2)% less: inter-divisional revenue (27.6) (47.7) (42.1)% Total 1,604.2 2,829.1 (43.3)% 16 * From 1 April 2017, Senyar Industries and Advanced Pipes and Casts Industries were no longer fully consolidated for on a line-by-line basis but rather equity accounted for (ie. their revenue contributions were no longer included), which naturally distorts the year-on-year comparisons

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Group results – net profit by segment

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QARm FY 2017 FY 2016 Change % Margin* 2017 FY % Margin* 2016 FY %

Industrial Manufacturing 167.8 210.4 (20.2)% 12.2% 8.6% Trading and Distribution 116.2 119.8 (3.0)% 18.3% 18.4% Property (ex-FV gains) 268.1 258.4 +3.8% 81.8% 79.3% Fair Value gains 0.0 0.9 (100.0)% n/a n/a Managed Services 7.0 9.8 (28.1)% 7.1% 10.0% less: Head Office costs (36.1) (39.0) (7.5)% n/a n/a Total 523.1 560.2 (6.6)% 26.3% 17.6% * Excludes those net profits from associates and joint ventures that are included above but are equity accounted for