Kuwait-based Mezzan Holding, one of the largest manufacturers and distributors of food, beverage, FMCG, and pharmaceutical products in the Gulf, has registered a 1.2% drop in its revenue for the first three months of the year which fell to KD72.5 million ($236 million), while its net profit fell KD2.9 million ($9.42 million).
Announcing the company’s financial results for the three-month period ended March 31, 2022, Mezzan said its operating profit fell 39.5% to KD3.9 million as a result of higher input costs, namely supply chain inflation, blended and flat selling pricing in Kuwait, resulting in lower gross margins.
Its ebitda too registered a 28.3% decline which fell to KD6.2 million, while its net profit to parent company shareholders plunged 40.7% to KD2.9 million.
Mezzan Holding is a 75-year old company listed on the Kuwait Stock Exchange in 2015. The company is headquartered in Kuwait with direct operational activities in UAE, Qatar, Saudi Arabia, Iraq and Jordan.
Mezzan Holding Executive Vice Chairman Mohammad Jassim Al Wazzan said: "For the first quarter, we delivered strong revenue, which reflects our presence in growing, extensive categories and the investments we have made towards bolstering Mezzan’s position across the various markets we operate in."
"However, our profitability dropped as a result of higher input costs, namely supply chain inflation, blended and flat selling pricing in Kuwait, resulting in lower gross margins. Looking ahead, we will continue to focus on productivity and improving our revenue management capabilities, while also continuing to make the necessary long-term investments to fortify our businesses across all business lines and geographies," he added.
Mezzan Holding CEO Garrett Walsh said: "The war in Ukraine has caused severe challenges and setbacks in global and regional economic prospects, which were already strained by Covid-related supply chain issues. That said, consumer demand is very healthy across most of our business lines and markets, evident by the company’s Q1 top line results coming in slightly lower than the exceptional Q1s of the last two years."
"Price adjustments is a key theme for the first half of the year, and we are in line with price adjustments in all markets, except in Kuwait, our biggest market, where our pricing remained unchanged due to the extension of Covid-related regulatory pricing caps. We hope these caps to be eased soon, which will positively impact our profitability in the future," he added.
On the financial performance review of its food business line, Mezzan said its total revenue for the food business line soared 2.7% to hit KD45.8 million over last year. The food business line accounted for 63.2% of group revenue.
The business line comprises the following three divisions: Manufacturing and Distribution (generating 49.9% of Group Revenue), Catering (generating 9.4% of Group Revenue), and Services (generating 4% of Group Revenue).
Mezzan said on the manufacturing and distribution side, the revenue grew by 7.2%, while catering revenue decreased by 7.6% and services by 18.3%.
On the non-food business line, Mezzan said its revenue reached KD26.7 million, down 7.3% over last year. The non-food business line accounted for 36.8% of group revenue.
The business lines comprises the following divisions: FMCG and Pharmaceuticals business division (generating 34.8% of Group Revenue) and Industrials (generating 2% of Group Revenue).
On the FMCG and Pharmaceuticals sectors, the Kuwaiti group said the revenue fell by 8%, while the industrials' revenue surged by 5.7%.
A leading player in the F&B sector in the region, Mezzan operates in six countries through 30 subsidiaries with more than 8,500 employees.
On its Kuwait business, the company said its revenue decreased by 4.8% mainly due to the decline in food, catering and FMCG business lines, while in the UAE its revenue increased by 21.7% as food manufacturing and distribution business lines improved in the emirates.
In Qatar too, the group's revenue rose 4.1% as food distribution and catering business lines improved.
On the Saudi market, Mezzan said its revenue increased by 36% as the group continues to expand its product presence in new channels, and the improvement in the food distribution business line.-TradeArabia News Service