Aamal net profit rises 566% to QR131.1 mn in first half of 2021

Tribune News Network Doha Aamal Company, one of the Gulf region’s leading diversified companies, on Tuesday announced that the company reported a total ne...

Tribune News NetworkDoha Aamal Company, one of the Gulf region’s leading diversified companies, on Tuesday announced that the company reported a total net profit of QR131.1 million in the first half of 2021, a rise of 566 percent compared to QR19.7 million in the first half of 2020.Total company’s net profit is before the deduction of net profit attributable to non-controlling interests. The company’s earnings per share (EPS) amounted to QR 0.021 as of June 30, 2021 against EPS of QR 0.003 for the same period in 2020.The company’s total revenue was up 12.1 percent to QR710.7 million in the first half of 2021 compared to QR634 million in the same period last year.Gross profit was up 24.3 percent to QR192.4 million in the first half of 2021 compared to QR154.8 million in the same period last year.The company’s net underlying profit, profit before share in results of associates and joint ventures accounted for using the equity method, increased to QR109.4 million in the first half of 2021 compared to a loss of QR8.8 million in the same period last year.The company’s net capital expenditure in the first half of 2021 stood at QR40.9 million compared to QR25.5 million in the first half of 2020.Commenting on the first-half results, Aamal Chairman Sheikh Faisal bin Qassim Al Thani said, “Aamal performed strongly over the first half-year, translating improved top-line revenues into net profit and earnings per share growth. This performance reflects the resilience of Aamal’s diversified business strategy and our focus on operational efficiency, production base optimisation and financial discipline as we navigated through the pandemic to date. As a result, we have restored all business segments to profitability in the half-year and increased capital investment while maintaining a strong balance sheet and low gearing. Aamal is therefore well-positioned, both to weather any future impacts of the pandemic and to benefit from the continued recovery of the wider economy.”“All segments performed well and industrial manufacturing, property and managed services each delivered year-on-year revenue, profit and margin improvement as restrictions eased, enabling infrastructure project order flows and retail and other business operations to start to normalise,” Sheikh Faisal said “Looking ahead, Aamal is in excellent shape, with the right strategy, market diversification, operational efficiency and financial strength and resilience to continuing to deliver growth and value for all stakeholders while contributing to the continuing development of the Qatar economy. We look forward to the second half of the year with confidence,” he said.The Industrial Manufacturing segment performed well in the first half with revenue increasing 79 percent to QR173 million and net profit up 28.2 percent to QR24.4 million.New contract wins contributed to revenue growth at Aamal Readymix and Aamal Cement of 6.1 percent and 27.5 percent year-on-year respectively. Aamal Cement increased profit by 203.6 percent to QR1.4 million, while Aamal Readymix improved profitability, reducing its net loss by 51.3 percent to QR1.9 million as ongoing measures were implemented to protect margins, reduce costs and improve pricing and product mix as the readymix market continued to see intense price competition.All business units benefitted from the trend towards normalisation in demand levels related to infrastructure projects. Advanced Pipes and Casts continued to convert its healthy order backlog and production of the new Glass Reinforced Pipe product is expected to start during the last quarter of 2021. Aamal Maritime Services benefited from sharply increased demand for maritime shipping services in the second quarter.As demand continues to track the increasing flow of contracts relating to the FIFA World Cup 2022 and Qatar’s pipeline of other major infrastructure projects continue to come on stream, volumes are expected to increase, supporting gradual margin improvement over the course of the second half of 2021 and beyond.Ebn Sina and Aamal Medical continued to perform well financially and operationally, retaining a significant proportion of the elevated revenue and profit levels in the first half of 2020. Ebn Sina introduced a new warehouse delivery system ‘Digisal’ to automate the warehouse supply process by digitalising the receipt of orders at the warehouse, processing and delivery to customers. It also received two robots for its warehouse for installation in the third quarter of 2021. The construction of Ebn Sina’s new warehouse at Manateq is underway and this is expected to be operational during the second quarter of 2022.Aamal Trading and Distribution’s automative businesses including Bridgestone Tyres performed well in the second quarter, delivering enhanced revenue growth and profitability as it benefitted from increased operational hours as restrictions started to ease. Further progress is expected in the second half as restrictions continue easing, through enhanced sales and marketing activities and greater availability of stock to meet customer demand.The company’s property segment revenue increased 59.9 percent year-on-year to QR120.4 million, while net profit rose 458.6 percent to QR93.3 million, reflecting the ongoing normalising of rental revenues in the first half and the elimination of negative fair value adjustments made in the first half of 2020 at the height of the pandemic restrictions.A growing number of new retail outlets opened at City Center Doha over the course of the first half of the year. Work continues with the development of the City Center frontage which will see the launch of new outdoor cafes and restaurants, as well as landscaping and work on two bridges connecting the mall to the metro station and the central business district, all initiatives which will further improve the customer experience at City Center.The first half of 2021 saw a gradual return to normal for parts of the Managed Services segment. Revenue was up 8.5 percent year-on-year to QR27.3 million and net profit up 143.1 percent to QR 0.7 million.Despite the continued challenges facing businesses within this segment, Aamal Services benefitted from increasing demand as restrictions eased over the period. Aamal Travel’s performance also improved following the easing of restrictions relating to the global travel industry.Although Winter Wonderland and Fun City remained closed for the majority of the period, Fun City reopened during June 2021 following the easing of COVID-19 restrictions.Aamal Chief Executive Officer and Managing Director Sheikh Mohamed Bin Faisal Al Thani said, “Our half year performance represents an inflection point for Aamal. The initiatives undertaken to navigate the pandemic and target growth and operational efficiency have restored the profitability of all business segments and delivered good revenue and profit growth. This performance also demonstrates the strength of our diversified business strategy with significant contributions made by all subsidiaries, ranging from the opening of new stores at City Center Doha, the impressive performances of Aamal Maritime Transportation Services and the new contract wins by Aamal Readymix and Aamal Cement Industries to Ebn Sina’s and Aamal Medical’s continuing strong results against moderating demand as the pandemic recedes, and the agility of our Managed Services subsidiaries to meet increasing demand as the restrictions which had so affected their services have started to ease.”“This outcome is down to our successful business strategy, our strong financial position and discipline, our commitment to the highest standards of governance, our outstanding management team and the dedication of all our employees who have worked so tirelessly to overcome the challenges of the pandemic,” he said.“The momentum of our performance in the first six months has carried into the start of the second half-year and we look forward to the remainder of 2021 with confidence as we continue to meet the growing demand for our high-quality products, bring new and innovative products and services to the market and explore new opportunities for incremental growth and value creation,” he said.