Aamal Company has reported more than 9% jump in net profit to QR656.7mn in 2015 mainly due to strong earnings from industrial manufacturing and trading businesses.
“Aamal has delivered an exceptional performance in 2015; revenue has grown by almost 35% which when combined with an expansion in the underlying margin, has led to net profit before fair value gains on investment properties rising by almost 50%,” chairman Sheikh Faisal bin Qassim al-Thani said.
Highlighting that its clear strategy has allowed it to achieve sustained growth by optimising existing business operations and create new revenue streams; he said these results “demonstrate clearly the resilience of our business model - diversified not just to minimise risk but also positioned to take advantage of structural growth opportunities.”
The group revenues shot up to QR2.88bn, largely on account of faster expansion in income from its industrial manufacturing and property division.
“Aamal has continued to grow and indeed prosper in line with its growth strategy. We occupy a number of market leading positions in a range of sectors across Qatar’s economy that are in various stages of structural, rather than cyclical, growth; furthermore, we are very well capitalised and have the financial strength to continue to pursue suitable opportunities as and when they arise,” its vice chairman Sheikh Mohamed bin Faisal al-Thani said.
Net profit for the industrial manufacturing division more than doubled to QR126.4mn, driven by “significant” revenue growth of about 55% (to QR1.75bn) and significant margin expansion to 4.8%, previously 3%, a company spokesman said.
The stand-out performers were Senyar Industries, Doha Cables in particular, winning several high profile and profitable contracts as infrastructure project building in Qatar continued apace.
Strong performances were registered by Aamal Readymix and Ci-San, both also beneficiaries of the continuing investment in infrastructure.
Aamal Readymix, focusing on the supply of high grade concrete, far exceeded its production targets and was honoured the “GCC 2015 Annual Business Excellence Award” as a best supplier from one of the leading projects in Qatar in recognition of exceptional service and quality.
Ci-San was bolstered further by the setting-up of a new subsidiary (Aamal Maritime for Transportation Services) in September 2015 to ship consignments of aggregates to Qatar.
Net profit for the trading and distribution division rose 28% to QR147.2mn, principally due to a 3.1 percentage point improvement in the net margin to 18.9%, and revenue growth of 7% to QR779.4mn.
“The principal factors behind this significant margin expansion were an expanding product line to fulfil growing market demands alongside the wider geographical coverage of our distribution footprint,” the spokesman said.
Underlying net profit for the property division (excluding fair value gains on investment properties) grew 20% to QR268.7mn year on year, due to a combination of revenue growth of almost 13% (to QR325.7mn) and significant expansion in the margin to 82.5% (2014: 77.3%).
This very strong performance was driven by annual rental increases throughout the year, combined with benefits that still continue to accrue from Phase 1 of the redevelopment of the flagship City Center Doha shopping mall.
Fair value gains on investment properties for the year were down at QR135.4mn (2014: QR 251.7m), in line with the hiatus in the redevelopment of City Center Doha (Phase 1 completed end-2013; Phase 2 permission received December 2015, expected completion date of 2018).
Net profit for the managed services division fell just over a third to QR5.5mn, mainly on steep decline in margins to 8% (2014: 12.9%), a reflection of an increasingly competitive environment in this space; even as revenues were up 7% (to QR68.5mn)
“Aamal has performed very well in 2015, with underlying profits rising significantly. What is extremely pleasing is that it has been a very healthy combination of both revenue growth and margin expansion, matched by an equally impressive cash flow,” according to Tarek M El Sayed, managing director of Aamal. Aamal has extremely low gearing, at just 3.8%, which positions the business strongly to grow further both organically and through acquisition opportunities which may become available, he said.