Aamal Q P S C : Third Quarter Results 2020

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28 October 2020

Aamal Company Q.P.S.C. ('Aamal')

Financial Results for the nine months ended 30 September 2020

Aamal reports top line revenue growth of 2.8% and net profit of QAR 90.6m

despite continuing impact of COVID-19

The Board of Directors of Aamal Company Q.P.S.C. ('Aamal' or 'the Group'), one of the Gulf Region's leading diversified companies, today announces its financial results for the nine months ended 30 September 2020.

Financial Highlights

• Total revenueup 2.8% to QAR 972.0m (Q3 2019: QAR 945.3m)
• Gross profitdown 28.1% to QAR 242.3m (Q3 2019: QAR 337.1m)
• Net underlying profit before fair value losses on investment propertiesdecreased 42.9% to QAR 121.3m (Q3 2019: QAR 212.3m)
• Net underlying profit margin before fair value losses on investment propertiesdecreased 10.0 percentage points to 12.5% (Q3 2019: 22.5%)
• Fair values losses on investment propertiesamounted to QAR 74.4m (Q3 2019: QAR 0m)
• Net profit before share in results of associates and joint ventures, accounted for using the equity method ('net underlying profit'), down 77.9% to QAR 46.9m (Q3 2019: QAR 212.3m)
• Net underlying profit margindecreased by 17.6 percentage points to 4.8% (Q3 2019: 22.5%)
• Share in results of associates and joint venturesaccounted for using the equity method decreased 7.6% to QAR 43.8m (Q3 2019: QAR 47.3m)
• Total Company net profit¹down 65.1% to QAR 90.6m (Q3 2019: QAR 259.6m)
• Net profit attributable to equity holders of Aamaldecreased 64.5% to QAR 91.6m (Q3 2019: 257.8m)
• Reported earnings per sharedown 64.5% at QAR 0.01 (Q3 2019: QAR 0.04)
• Capital expenditureincreased 4.6% to QAR 33.8m (Q3 2019 QAR 32.3m), mainly due to renovation works in the Property segment
• Gearingremains low at 2.75%

¹Total Company net profit is before the deduction of net profit attributable to non-controlling interests

Summary and Outlook

Sheikh Faisal Bin Qassim Al Thani, Chairman of Aamal, commented:

'While Aamal's operating and financial performance continued to be impacted by the ongoing COVID-19 pandemic throughout the third quarter of 2020, signs of recovery are beginning to emerge.

'Despite the challenging market conditions presented by COVID-19 and strong competition, the Trading and Distribution segment delivered a commendable performance with revenue and net profit up 26% and 18%, respectively. This is largely attributable to Ebn Sina Medical, which recorded a significant increase in orders.

'Meanwhile, the Industrial Manufacturing segment is seeing signs of improvement in the levels of project activity as Qatar prepares to host the FIFA World Cup 2022. Aamal Cables won a major three-year contract with Kahramaa, the sole transmission and distribution system owner and operator for the electricity and water segments in Qatar, to supply 11KV medium voltage and pilot power cables. This significant contract, worth QAR 694m over 3 years, demonstrates our strong competitive positioning in the sector. The Industrial Manufacturing segment recorded top line growth of 23.8% year-on-year driven by new contract wins, although pricing and margins remained under pressure from continuing acute competition at Aamal Readymix. In response, we are continuing to focus on improving operational efficiency, optimizing our production base and diversifying into new revenue streams.

'The performance of the Property segment continued to be impacted by the waiving of rents for commercial tenants at both City Center Doha and Souk Al Harraj, a decision we took in order to support our tenants during these challenging times. While most of City Center Doha has now reopened following its closure due to COVID-19, Aamal has continued to provide financial support to tenants throughout the third quarter while footfall recovers.

'Finally, in the Managed Services segment, Aamal Services has been impacted by reduced demand for hospitality and facilities management services, whilst other businesses such as Fun City and Winter Wonderland remained closed as a result of COVID-related restrictions imposed by the Qatari government.'

H.E. Sheikh Mohamed Bin Faisal Al Thani, Chief Executive Officer and Managing Director of Aamal, commented:

'Throughout the third quarter, Aamal's Board of Directors and management team have remained focused on navigating a uniquely challenging environment, preserving the strength of our balance sheet and ensuring Aamal remains well positioned for the future by implementing operational improvements across the Group. As a result, we have again withstood the impacts of pandemic in the quarter, remaining profitable, delivering topline growth and keeping our gearing low while increasing capital investment.

' To support the ongoing development of the Group, the Property segment has commenced the development of the frontage at City Center Doha, which will see the launch of new outdoor cafes and restaurants as well as landscaping, and Aamal Real Estate has commenced renovation of several buildings and compounds to improve its offering in the real estate market. Furthermore, to improve efficiency at Aamal Readymix we have implemented a number of operational improvements, including a review of sales and pricing policies to drive competitiveness.

'Throughout the pandemic, our top priority has been to provide a safe and supportive working environment for all of Aamal's employees. The Board of Directors would like to once again thank all employees for their unwavering dedication during this exceptionally challenging period.

'We expect conditions to remain challenging throughout the remainder of 2020 as uncertainty prevails around the COVID-19 pandemic, its progression, severity and duration. Notwithstanding the uncertainty in global markets, in the longer term there are significant opportunities across all four of Aamal's segments. We remain confident that the diversification of our business model and the strength of our balance sheet will ensure the Group remains well-positioned to grasp opportunities as the market recovers.

'We are pleased to report that from the start of the fourth quarter of 2020, Aamal has been included in the QE Index which comprises the twenty most liquid and largest listed companies on the Qatar Stock Exchange by free float market capitalization.As the benchmark index for the Exchange, we welcome the additional investment profile that inclusion in the QE Index will bring.'

CONFERENCE CALL DETAILS

A conference call to discuss the results will be held on 2 November 2020 at 14:00 Doha / 11:00 UK. The details for the conference call are as follows:

Date:Monday, 2 November 2020

Time: 14:00 Doha / 11:00 UK

Dial-In Numbers: https://zoom.us/j/96667074162

UK: [phone]

USA: [phone]

Conference ID: 966 6707 4162

Please join the event conference 5-10 minutes prior to the start time.

FURTHER ENQUIRIES

Aamal Company
Mira Al Ahmad - Senior Corporate Communications Officer	E:[e-mail] T: [phone]
Laura Ackel - Corporate Communications Officer	E:[e-mail] T: [phone]
Citigate Dewe Rogerson (IR/PR Advisor)
Michael Russell	E:[e-mail] T: [phone]
Andrew Hey	E:[e-mail] T: [phone]
Toby Moore	E:[e-mail] T: [phone]
Ramiz Al-Turk (Arabic media)	T:[e-mail] E: [phone]

ABOUT AAMAL COMPANY Q.P.S.C.

Aamal is one of the Gulf region's most diversified conglomerates and has been listed on the Qatar Stock Exchange since December 2007. As at 28 October 2020, the Company had a market capitalisation of QAR 2.1bn (US$ 586.5m).

Aamal's operations are widely diversified and comprise 27 active business units (subsidiaries and joint ventures) with market leading positions in the key industrial, retail, property, managed services, and medical equipment and pharmaceutical sectors, thereby offering investors a high quality and balanced exposure to Qatar's wider economic growth and development.

For further information on Aamal Company, please refer to the corporate website:http://www.aamal.com.qa

End of Release

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