Mekdam Holding Group achieved a net profit of QR36.4mn in 2023, registering a 6.3% growth rate compared to QR34.3mn in 2022 as the sharp rise in interest rates curbed the growth in net profits.
Earnings per share (EPS) amounted to QR0.430 in 2023 compared to EPS of QR0.457 in 2022, according to Mekdam Holding Group chairman Sheikh Mohamed bin Nawaf bin Nasser bin Khalid al-Thani Saturday.
Sheikh Mohamed said Mekdam achieved growth in operating profits, as operating profits before banking interest and depreciation amounted to QR46.9mn in 2023, compared to QR40.5mn for the previous year, with a growth rate of 15.7%. This improvement in operating profits came as a result of the company’s ability to maintain revenue levels of QR526mn and reduce operating costs, he said.
Chief executive officer Ehab Naser said Mekdam was able to sign new contracts with a total value of QR888mn in 2023. The board was also briefed on the total value of the contracts being implemented, which amounted to about QR1.765bn, while the value of the remaining works amounted to about QR1.239bn. Concerning the sales proposals, the total offers submitted and negotiated with customers amounted to about QR3.624bn.
The expected success rate, according to historical indicators, ranges from 20% to 30%. The customer retention rate was around 90%. The board emphasised the importance of these indicators to the executive management as these indicators are the key factor in building revenue expectations, net future profits, and enhancing the value of shareholders’ equity.
As for Mekdam’s financial position, the group has maintained its liquidity levels of 80.0% of its assets, which are current assets. The current ratio (current assets to current liabilities) is 1.73 times. The group also reduced bank financing as increased operating cash flows and increased capital contributed to reducing bank financing from QR124.1mn in 2022 to QR63.9mn in 2023, a decrease of 48.5%.
Net bank indebtedness (bank loans minus cash and bank balances) decreased from QR102.4mn in 2022 to QR38.6mn in 2023, a drop of 62.3%. Bank financing is granted to the company in the form of projects financing that ends with the implementation of these projects and their delivery to customers. The board reviewed the results of the credit rating, where Standard & Poor’s confirmed Mekdam Holding Group’s credit rating at (gcBB).
The board reviewed the process of increasing the company’s capital as the Extraordinary General Assembly approved the capital increase on September 10, 2023. The capital was increased by QR30mn, bringing the company’s capital to QR105mn.
The subscription process witnessed an unprecedented turnout as the subscription rate reached approximately 98%, while unsubscribed shares were sold through the Qatar Stock Exchange on the same day it was offered. The board confirmed that the timing of the capital increase is appropriate to support the company’s continuous growth, where a group of large projects have been awarded recently to the company.
In preparation for strategic expansions, the Extraordinary General Assembly cancelled the maximum individual ownership limit of 5% and allowed the foreign investor to own 100% of the capital. All other procedures in this regard are under process.
The board also reviewed the performance of the stock on the Qatar Stock Exchange, where the Mekdam Holding Group was able to transfer the listing of shares from the venture market to the main market as of January 2, 2023. The group was also able to increase the shareholder base to approximately 614 shareholders. The founders, through the listing, offered about 33.7% of the group’s capital.
After the session, the board decided to recommend to the general assembly the distribution of dividends to shareholders in the form of bonus shares. It distributes bonus shares to shareholders at a ratio of six shares for every 21 shares (equivalent to approximately 0.2857 shares per share).
