Aamal Company has reported a 15% fall in net profit to QR506.87mn in 2013 mainly due to strong contraction in net fair value gains in investment properties.
Net fair value gains on investment properties plunged 37% to QR245.05mn, according to its financial statement filed with the Qatar Exchange.
Otherwise, its profit before fair value gains on investment properties was up 13% to QR267.23mn, largely driven by robust growth in operating profit of trading and distribution as well as property divisions.
The company has suggested transferring the profits to retained earnings, which will have to be approved by shareholders at the annual general assembly meeting scheduled on April 6.
“Year 2013 has been another strong year for Aamal Company. We have managed to grow both revenues and expand margins, thereby improving the overall quality of earnings,” its chairman Sheikh Faisal bin Qassim al-Thani said.
Revenue grew 2% to QR2.12bn whereas direct costs also grew by similar proportion to QR1.7bn; yet translating as 3% jump in gross profit to QR420.46mn, the financial statement said.
Its industrial manufacturing division reported 2% fall in revenue to QR1.26bn mainly due to drop in earnings from its Ci-San Trading although that from Senyar Industries (which contributes 80% of the division’s revenue) grew by about 2%.
The alternative sales channels to neighbouring countries in the Gulf Co-operation Council and East Africa have started to be opened up and “we are also planning to expand into Central Asia”, the company spokesman said.
Net profit for the industrial manufacturing plunged 60% to QR22.6mn and its margin fell 260 basis points to 1.4%, driven principally by the delay in passing onto end-customers price increases in the cost of raw materials for both Senyar Industries and Ci-San Trading.
“We are now starting to pass these on and expect to see a recovery in margins,” the spokesman added.
Trading and distribution saw a 10% jump in revenue to QR585.8mn on strong performance from Ebn Sina Medical and Aamal Trading, which witnessed 16% and 12% sales increases respectively.
The division saw its net profit grow 59% to QR86.6mn and margin improve by 460 basis points to 14.8% due to rise in profitability at Aamal Trading, Ebn Sina Medical and Aamal Medical.
Its property division witnessed 12% rise in revenue to QR26.6mn, largely reflecting the recent Phase I expansion and renovation of the City Center Doha shopping mall.
The division saw its net profit gain 10% to QR200.8mn but margin shrank 80 basis points to 76.8%. “Work has now begun to obtain the necessary permission for Phase II of the redevelopment of City Center Doha,” the company said.
The managed services division saw 2% rise in revenue to QR86.3mn while net profit fell 3% to QR5.2mn. Profit margin suffered compression due to the continuing highly competitive environment, particularly within Aamal Services.
Aamal Company was also seen to contain expenses with its marketing and promotion costs falling 12% to QR19mn, general and administrative costs by 12% to QR109.98mn and finance costs by 23% to QR44.93mn.
Total assets were valued at QR8.53bn comprising current assets of QR1.48bn and non-current assets of QR7.05bn.
Total equity stood at QR7.1bn on a capital base of QR6bn and earnings-per-share was QR0.85 at the end of December 31, 2013.