• Higher and positive gross profit and profit from operations
  • Reduced net losses
  • Implementing active measures to strength balance sheet position
  • Restructuring bank obligations to achieve sustainable financial position

Kuwait: ACICO Group today announced an improvement in its earnings for the financial year ending December 31, 2023, with its bottom line improving by 87% from a net loss of KD46.4 million in 2022 to net loss of KD6.1 million in 2023. Earnings per share subsequently improved from (123.19) fils per share in 2022 to (11.55) fils per share.

Commenting on the results, ACICO Chairman, Mr. Emad Abdullah Al Essa, said: “The improvement comes a year after the Company started executing its five-year restructuring strategy which aims to bring it back to profitability.

“The execution focuses on several pillars from improving the financial and operational performance, enhancing shareholder equity by restructuring the Company’s financial obligations, further advancing the industrial business performance, and gradually divesting from lesser valued investments and assets. The strategy roadmap was developed considering the  market dynamics, business landscape and financial objectives, specifically the increase in interest rates which directly impacted on the Company’s earnings and ability to cover its financial obligations.”

Improved operational performance

Supported by a solid and diversified operational model, ACICO continued to provide its products and services at the highest quality in the industry, serving ongoing demand in the region and meeting the standards and requirements set for projects. The Company also introduced several initiatives to drive operational growth, including a policy for cost optimization and reduced spending as well as steps to enhance operational efficiency. As a result of these initiatives, ACICO increased its market share and operating profit as it continued to deliver in its main lines of operations: the manufacturing of building materials in its factories and subsidiaries in Kuwait and GCC.

ACICO is today one of the leading national companies in manufacturing of building material, construction and contracting for multi-sector projects, delivering innovative and sustainable solutions within the industry, and construction and engineering services for all levels of projects.

While operating revenues of the industrial business lines were affected by external economic factors and decreased by 8% to KD68.9 million gross profit from industrial operations increased 3 fold to KD 11.6 million ( KD 3.9 million in 2022) which is a testament to the success of the Company’s strategy and restructuring plan in which the Board of Directors has undertaken measures to increase assets and earnings.

Furthermore, the Company continued the strong performance performance in its real estate sector, which rose by 16% to achieve net revenues of KD7.7 million, driven by increased occupancy rates and rental prices.

Improved financial position

Total assets by year end reached KD358 million, a 1% increase over the total assets as of December 31, 2022. ACICO had re-evaluated some of its real estate assets for fair value.

Total equity in 2023 declined to KD37 million in comparison to KD43 million in 2022.

As for the total liabilities, the debts is currently under restructuring. This comes as part of the Company’s endeavors to strengthen its financial position and protect the interest of shareholders and stakeholders. ACICO has developed a plan to reschedule its obligations in line with its ability to cover debt and with the objective to achieve a sustainable financial position. Negotiations are underway with lenders to finalize the plan.

Realignment of the organizational structure

Finally, ACICO reviewed its organizational structure with the aim of increasing effectiveness in its divisions and enhancing its internal controls. The Company set up new departments to raise efficiency levels, and recruited new executives with regional experience to lead operational efficiency in factories and execute the restructuring strategy.

In this regard, the Company recruited a new Chief Executive Officer and senior managers who succeeded in their first year in making significant progress in the execution of the strategy by increasing market shares and operational efficiency, in addition to reducing costs as the Company prepares for further growth.

As ACICO enters its second year of its restructuring strategy, it remains focused on quality and efficiency across all its business lines, as well as on operational excellence. Its outlook for the coming years is positive as it gradually returns to profitability.

-Ends-

About ACICO Group:

With more than 35 years of experience, ACICO Group is one of the leading companies in manufacture of building material, construction, contracting for multi-sector projects with a regional real estate presence.

Recognized for delivering innovative and sustainable solutions within the industry, ACICO employs traditional building methods, in addition to its signature ACICO building system (utilizing load-bearing walls). The Company has today a strong regional client-base in the public and private sectors.

ACICO prides itself on its professionalism and ethical practices, providing services according to the highest local and international standards. The Company also remains committed to delivering projects on time and within budget, with uncompromised standards for safety and quality. ACICO is classified as Grade (A) Construction Company by the Kuwait Central Tenders Committee (CTC) since 2010. The Company’s acquired strength and proficiency in the field over the years leading it to expand in Saudi, United Arab Emirates and Qatar.