Posted on April 30, 2018

The Board of Directors of Aamal Company Q.P.S.C. (Aamal), one of the Gulf Region’s fastest growing diversified companies, today announces its first quarter financial results for the quarter ended 31 March 2018

Financial Highlights

  • Group revenue down 62.9% to QAR 308.2m (Q1 2017: QAR 830.8m), primarily due to the reclassification of two business entities within the Industrial Manufacturing segment from subsidiaries to joint ventures from 1 April 2017, with a consequent change in their accounting presentation
  • Gross profit down 36.4% to QAR 117.1m (Q1 2017: QAR 184.2m)
  • Net profit before share of net profits of associates and joint ventures accounted for using the equity method (“net underlying profit”) down 38.3% to QAR 84.9m (Q1 2017: QAR 137.6m)
  • Net underlying profit margins have increased by 10.9 percentage points to 27.5% (Q1 2017: 16.6%)
  • Share of net profits from associates and joint ventures accounted for using the equity method increased in excess of fourteenfold (14.4x) to QAR 31.2m (Q1 2017: QAR 2.2m).
  • There were no fair value gains on investment properties in either Q1 2018 or Q1 2017:
  • Total Company net profit1 down 16.9% to QAR 116.1m (Q1 2017: QAR 139.7m), with net profit attributable to Aamal equity holders up 1.2% to QAR 115.8m (Q1 2017: QAR 114.5m)
  • Reported earnings per share remain flat at QAR 0.18 (Q1 2017: QAR 0.18)
  • Net capital investment expenditure increased by QAR 183.5m to QAR 208.6m (Q1 2017 QAR 25.1m), reflecting enhancements to the Company’s real estate portfolio through the acquisition of a number of prime residential assets

1 Total Company net profit is before the deduction of net profit attributable to non-controlling interests

SUMMARY AND OUTLOOK

Sheikh Faisal Bin Qassim Al Thani, Chairman of Aamal, commented: “Despite the current market conditions, Aamal has continued to deliver a solid performance in the first three months of 2018, recording a marginal increase in net profits for its shareholders. We believe this very creditable performance is testament to Aamal’s enduring ability not only to withstand challenging market conditions, but also its alertness to new opportunities allied with the agility and financial strength to pursue them should potential value be identified.

“I should also like to point out that some of the year-on-year declines reported (revenue in particular) are not truly reflective of the economic reality of Aamal’s performance as they are not true like-for-like comparatives. These numbers reported are largely due to a change in the accounting presentation for a couple of business entities within the Industrial Manufacturing segment, with effect from 1 April 2017. From this date, these two entities were no longer fully consolidated on a line-by-line basis, but rather through the equity method, following their reclassification from subsidiaries to joint ventures. The most relevant indicators of corporate performance to use for the quarter are the net profit attributable to Aamal equity holders figure and reported earnings per share, as the distortions caused by this one-off change in the accounting presentation are cancelled out. “As we look ahead to the rest of 2018, we remain confident that we are well positioned to build on the opportunities that continue to present themselves.”

H.E. Sheikh Mohamed Bin Faisal Al Thani, Vice-Chairman and Managing Director of Aamal, commented: “We are delighted to report such an encouraging start to the year. Aamal’s exposure across the entire economic spectrum, combined with our agility to grasp value-creating opportunities in a timely manner, reinforces our resilience and competitive position in what is no doubt a challenging environment at present. “Amongst our achievements since the start of the year, Aamal has successfully appointed a new liquidity provider for our listed shares to reduce share price volatility, thus increasing the appeal of Aamal’s equity further. We are also pleased to have acquired several high-quality assets to enhance our real estate portfolio including three residential compounds all in prime Doha locations.

“Furthermore, we are also delighted to have launched three new industrial projects, including the Senyar Drum Production Factory which is currently well underway, and we expect this facility to be fit for the commencement of operations by the end of this year.”

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