Mezzan Holding reports FY 2020 financial results

Board recommends cash dividend of 18 fils per share, representing 50% of the profit, and the distribution of treasury shares at a rate of 2% (2 shares for every 100 shares held by investors).

Kuwait: Mezzan Holding KSC, one of the largest manufacturers and distributors of food, beverage, FMCG and pharmaceutical products in the Gulf, today announced the company’s financial results for FY 2020.

The company recorded KD 246.4 million in revenue, driven by its fast-moving consumer goods and healthcare, as well as food manufacturing and distribution. The increase in Mezzan’s revenue was also accompanied by enhancements in Gross Profit, Operating Profit, and Earnings Before Interest, Tax, and Depreciation and Amortization (EBITDA). Mezzan’s 2020 Net Profit to Parent Company Shareholders grew by 94% compared to 2019, as a result of higher margins, increased scale of operations, as well as lower borrowing costs.

The Board of Directors recommended a cash dividend of 18 fils per share and the distribution of treasury shares at a rate of 2% shares (2 shares for every 100 shares held by investors).

FY 2020 Financial Highlights:

• Revenue: KD 246.4 million, up 10.8%
• Operating Profit: KD 17.1 million, up 35.3%
• EBITDA: KD25.4 million, up 36.9%
• Net Profit to Parent Company Shareholders: KD10.9 million, up 94%

Mezzan Holding Executive Vice Chairman Mohammad Jassim Al Wazzan said: “The group performed well and we are pleased with the results achieved, taking into consideration the unusual challenging operating conditions. This indicates the strength and flexibility of our business model and the diversification in our business lines during the past few years, in addition to the exceptional dedication and commitment of Mezzan employees in such difficult times”.

Mezzan Holding CEO Garett Walsh said: “Mezzan’s performance in 2020 once again proved its robust business model. We have seen a significant increase in profitability resulting and revenue growth in Kuwait’s food, FMCG and healthcare sectors. We are also pleased to witness the growth of revenue in our KSA business in 2020, despite the challenging market conditions caused by the pandemic, and we expect to capture more growth as we improve our logistics in the kingdom. Looking forward, we maintain our focus on becoming a major regional player with leading positions in each of the business lines we operate in the coming years.

FY 2020 Financial Performance Review:

• Food Business Line:

Total Revenue for the Food Business Line reached KD 165.5 million, an increase of 3.2% compared with the same period in 2019. The Food Business Line accounted for 67.2% of Group Revenue. The Business Line comprises the following three divisions:  Manufacturing and Distribution (generating 46.6% of Group Revenue), Catering (generating 13.6% of Group Revenue) and Services (generating 7.0% of Group Revenue).

• Manufacturing and Distribution: FY Revenue increased by 6.8%.
• Catering: FY Revenue decreased by 5.9%.
• Services: FY Revenue decreased by 0.8%.

• Non-Food Business Line:

Revenue reached KD80.9 million, an increase of 30.4% compared with the same period in 2019. The Non-Food Business Line accounted for 32.8% of Group Revenue. The Business Lines comprises the following divisions: FMCG and Pharmaceuticals business division (generating 31.0% of Group Revenue) and Industrials (contributing 1.8%).

• FMCG and Pharmaceuticals: FY Revenue increased by 34.1% fueled by KSPICO acquisition and Medtronics JV
• Industrials: FY Industrials Revenues decreased by 11.5%.

Regional Business Highlights in FY 2020:

• In Kuwait: FY Revenue grew by 16.7% due to strong performance in FMCG and healthcare segment spurred by acquisitions.
• In UAE: FY Revenue increased by 2.1% due to the increase in production and sales of potato chips and snacks lines.
• In Qatar: FY Revenue decreased by 12.1% due to the decline of catering business line.
• In KSA: FY Revenue increased by 7.0% as Mezzan continues to expand its distribution reach and improve logistical operations.
• In Afghanistan: FY Revenue decreased by 16.7%.
• In Jordan: FY Revenue increased by 14.4%.

About Mezzan Holding:

• Operates in seven countries through 30 subsidiaries with more than 8,500 employees
• Distributes over 34,000 Stock Keeping Units (SKU), making it one of the largest operators in terms of SKUs, unit sales, market share, and in terms of share of revenues of total consumer spending in consumer categories served by the company
• Active in various segments of the consumer staple industry supported by long-standing relationships with Johnson & Johnson, Kimberly-Clark, Reckitt Benckiser, General Mills, Arla Foods, Sara Lee, and many other leading brands and manufacturers
• Serves over 130,000 meals a day in Kuwait and Qatar through its catering business
• Has a total of 190,000 square meters in food, beverage, and FMCG manufacturing facilities in Kuwait, Qatar, UAE, and Afghanistan
• Leverages long-standing relationships with private and cooperative supermarkets
• Vertically integrated into complementary business operations, including packaging, catering, contract services, and logistics
• Food services customers include multinational fast-food chains, airline catering services, and large food services companies

Mezzan Holding is a 75-year old company that was listed on the Kuwait Stock Exchange in the second quarter of 2015. The company is headquartered in Kuwait with direct operational activities in Kuwait, UAE, Qatar, Saudi Arabia, Iraq, Jordan, and Afghanistan.

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Fawaz Al-Sirri | +965 66622448 | fawaz@bensirri.com

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