KUWAIT: Danah Al-Safat Foodstuff Company convened its annual general assembly meeting yesterday and elected its new board of directors. Chairman of the Board Fahed Abdulrahman Al-Mukhaizim presided over the meeting and thanked shareholders for attending the general assembly meeting which concluded on a positive note. Al-Mukhaizim, who spoke to the Kuwait Times following the general assembly meeting, said all the items on the agenda were approved and the new board received a vote of confidence.
Talking in detail about the company’s performance and its future plans, in the presence of the board which was re-elected yesterday, Al-Mukhaizim said the board had a vision in 2014 and a plan for the next three years, including the restructuring of the operating units of the company. The company had a plan to review its main activities, and attempt to inject more funds into it in order to expand existing activities. Results at the operational profits level remained positive though profits marginally declined. However, the company is standing on solid grounds both at operational and financial levels.
KT: What are your future plans and do you intend to expand to other markets?
Al-Mukhaizim: In fact we have F&B Venture Holding in Lebanon, which received a trademark and began to branch into to neighboring countries. Similarly, another company Egyptian Dairy Foodstuff Company (EDAFCO), which started self-production and expanded its activities significantly.
The industrial line that we are taking is very important and one of the main sources that will contribute to enhance the revenues of companies in addition to the restaurants sector which is being restructured in order give it a new look.
KT: Will the company return to the stock market following the general assembly?
Al-Mukhaizim: There is no doubt that we will, because the main reason for suspending the trading of the company’s shares was over holding the general assembly meeting. We will send the appropriate correspondence to resume stock market activity.
The annual report
Al-Mukhaizim read out the report of the management to the general assembly. The report said:
“Another year has passed with a performance that was driven by determined efforts and was rewarded with outstanding achievements. 2015 was a crucial year in which the company exceeded its strategic objectives by achieving results that go beyond the targeted levels helping it further strengthening its leading position as a pioneering company in the field of foodstuffs. The company also improved its market value in the local and domestic markets supported by the volume of its business and the strength of its brands.
It added, “2015 was a unique year in every measure. It saw the company resolutely face numerous challenges and make continuous efforts to improve performance with the full support from the Board of Directors, and the loyal efforts of its employees, who shared the board’s commitment not only to preserve but also to enhance the company’s position as an economic bastion. It represents a diversified and integrated group of companies that occupies a prominent position in the foodstuffs sector while playing a key role in providing a wide range of foodstuffs including processed and unprocessed foodstuffs through its subsidiaries by using multiple distribution channels of those companies.
The company continued its strong performance and achieved high performance in most of its activities by implementing an ambitious strategy designed to enable the company to expand its horizons further. The strategy also helped the company constructively engage in the economic development of the country by remaining the supplier of the customers’ choice.
Al-Mukhazim said in 2015 the company made a number of achievements despite the continuing negative effects of the financial crisis, political circumstances and oil price decline. Foremost among those achievements was the improvement of the company’s consolidated sales by 16 percent compared to 2014 (as sales benefited from the re-structuring of the sales sectors of the subsidiary companies and the appointment of a number of executives of outstanding talents in those sectors as well as the launching of new products).
Geographic expansion was another key achievement.
During the year, we achieved a higher level of balance and synergy among the various sectors of the company, ensuring that work is done with higher professionalism, and implementing a well-considered restructuring plan designed to ensure the achievement of sizeable surpluses in the service sectors of the subsidiary companies, with unlimited support by the parent company. It is also worth noting that the company’s total assets rose by 13 percent during the year.
First: Financial Performance
Danah Al-Safat Foodstuff Company
The company achieved a profit of KD 102,722 in 2015 compared to KD 458,583 in 2014. It is worth mentioning that the company had to take necessary precautionary provisions amounting to KD 2,712,544 against the background of probable economic conditions. This means that the company’s profits before these provisions amounted to KD 2,815,266, with an increase of KD 514 percent over those achieved in 2014.
Earnings per share amounted to 0.36 fils in 2015 compared to 1.62 fils in 2014. Total revenues amounted to KD 36,045,126 in 2015 compared to KD 31,134,043 in 2014, reflecting an increase of 16 percent. Gross profit for 2015 rose to KD 9,982,555 against KD 7,697,072 for the previous year, representing a 30 percent improvement for the year. General and Administrative expenses for 2015 amounted to KD 3,754,334 compared to KD 3,370,878 in the previous year and shareholders’ equity amounted to KD 35,345,373 at the end of 2015, rising by 2 percent over its level of KD 34,768,776 at the end of the previous year. At the end of 2015, the book value per share amounted to KD 122 fils compared to 120 fils at the end of 2014.
In 2015, our subsidiary companies continued to deal with the difficult economic and political conditions that confronted the local markets, with a stronger determination to overcome the unfavorable effects of those conditions, for our companies enjoyed all the factors conducive to achieve success and the key elements of development.
United Fisheries of Kuwait
Sales for 2015 amounted to KD 6,471,528 compared to KD 4,665,065 for the same period of the previous year with an increase of 39 percent. These sales are the highest achieved by the company during the past 10 years. The company achieved a net profit of KD 401,219 against KD 148,055 in the previous year, rising by 171 percent for the period.
Safat Dhiafa Company
Total sales for 2015 amounted to KD 6,338,536 compared to KD 6,498,956 for the same period of the previous year. The company registered a loss of KD 2,576,352 in 2015 against a loss of KD 28,341 for the same period of the previous year.
F & B Company, Lebanon
Sales for 2015 amounted to KD 21,323,426 compared to KD 18,593,544 for the same period of the previous year, rising by 15 percent for the year. The company achieved a profit of KD 1,396,431 in2015 against a profit of KD 1,055,576 for the same period of the previous year, with an increase of 32 percent for the year.
Sales amounted to KD 2,817,133 in 2015 compared to KD 2,089,180 for the same period of the previous year, with an increase of 35 percent. Profits amounted to KD 226,246 for 2015 compared to a profit of KD 65,217 for the same period of the previous year, rising by 247 percent.
The global economic crisis, which broke out at a massive scale in mid-2008 had a negative effect on the company’s investment operations which suffered a substantial decline in value and prompted the company to take due and precautionary provisions, thereby impacting the company’s performance.
In general, the company closely monitors the economic situation in order to seize any attractive investment opportunities related to the company’s activities of all kinds that may become available depending on market conditions with due consideration to the lingering effects of the economic crisis.
Cash dividends and bonus shares
The board of directors decided not to distribute cash dividends or bonus shares and to recommend the general assembly to approve this decision.
Board of Directors’ remuneration
The Board of Directors decided not to pay director remunerations and recommended the Board of Directors to approve this decision.
Keen to comply with the rules and regulations issued by the Capital Markets Authority concerning governance, the company is currently finalizing the procedure for implementing by mid-2016, according to the relevant time schedule issued by the Capital Markets Authority.
Strongly believing in the viability of the food industries sector and its role in providing foodstuffs, the company has paid considerable attention to this sector. Within this framework, facilities at the company’s plant at Doha Port has been developed in order to achieve a positive shift in the quality of seafood offered by the company and by introducing new product lines of fresh and frozen and ready-to-cook shrimp.
The plant of Edafco Company in the Arab Republic of Egypt has also been developed and replacement and maintenance operations have been carried out for the plant equipment with a view to increasing production efficiency. In Lebanon the entire ice-cream plant has been replaced and no production equipment have been installed with higher production capacity. Other equipment have been added to the dairy plant for producing all kinds of cheese.
Despite the achievements made by the company, it still has many more to achieve. To do so, it has drawn a framework that regulates all available policies and plans to exploit the company’s resources in an optimal manner and develop its products and services in such way as to promote diversification of its sources of income.
In his concluding remarks, Al-Mukhaizim said, “The Board of Directors has the honor to present its highest appreciation and deepest gratitude to His Highness the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah, His Highness the Crown Prince, Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah, His Highness the Prime Minister Sheikh Jaber Al-Mubarak Al-Hamad Al-Sabah and the honorable government. We would also like to thank the shareholders of the company for their support and the employees of the company for their faithful efforts in implementing the company’s plan. We pray to Allah Almighty to protect Kuwait and keep it safe and secure forever. The General assembly then elected Dar Al-Safa, Al-Safa company, Malik Maher Marafie, Abdullah Hamad Al-Terkait and Bader Mohamed Al-Qattan as board members.
By Abdellatif Sharaa