(The Group’s Comments) Aamal Net Profit Down 17.4% to QR 347.6 Million in 2018

Ø  Profits: Aamal’s net profit amounted to QR 347.6 million in 2018, compared to QR 421 million for the previous year of 2017, a decrease of 17.4%, while its profits from investments in associate companies amounted to QR 445.3 million, a drop of 11.11%, compared to QR501.0 million in 2017. Aamal’s earnings per share, after the results of the companies it invests in, amounted to QR 0.71, versus QR 0.80 in 2017. Fourth quarter profits reached QR240 million in 2018, while those of 2017 stood at QR 308.5 million, a drop of 22%.

Ø  Revenues: 2018 revenues reached QR 1,286.6 million, 19.8% less than the revenues in 2017 that stood at QR 1,604.2. This decrease is mainly due to the drop of QR 310.3 million in sales of goods (pharmaceuticals, medical equipment, consumer goods, household appliances and others), which had an negative impact on the total revenue.

The cost of revenues to revenues amounted to about 63.7%, compared to 66% in 2017, while the operating profit decreased by 20% in 2018 due to the company's non-recurrent profits from subsidiary companies in 2017, which amounted to about QR 22.2 million. Other revenues decreased by about QR 9.47 million.

Ø  Assets: Increased by 4.3% in 2018, to reach QR 9,046.2 million. Aamal changed its financing structure in 2018 by relying on long term loans rather than short term financing of its assets. Therefore, long term loans increased by QR 509.4 million as a result of converting short term loans into long term loans, in addition to new loans.

Ø  Dividends: The Board of Directors recommended the distribution of 6.0% of the nominal value of the share (6.14% dividend yield) in cash dividends, i.e. QR 0.60 per share, the same as the dividend distribution in 2017.

Ø  Market ratios: The stock is currently traded at a PE multiple of 13.80 times and a book value multiple of 0.77 times.