On March 29, The Sultan Center requested a voluntary suspension of trading while it embarked on a transformation plan to refocus the company on Kuwait retail operations. The company generates over 90% of its revenue from retail operations.
The company reduced its outstanding supplier dues by about 45%, and is in advanced stages of restructuring its long-term debt and selling non-core assets.
Tomorrow, the company resumes trading on Boursa Kuwait with rebounding earnings and healthier retail business after divesting from several non-core assets and focusing on the retail business in Kuwait, which represents 52% of the company's retail revenue
Kuwait : Kuwait-headquartered supermarket chain The Sultan Center (TSC) today reported its earnings for Q3 2017 and progress update on its transformation plan. The company reported an EBITDA of KD2.1 million for the quarter, up 2.8%, and a net profit of KD 0.8 million, up 88.0% from last year. The company will resume trading tomorrow November 16 following the successful execution of phase-one of its transformation plan “Kuwait Retail First”. The suspension from trading was voluntary based on a request from TSC to shield investors, especially minority shareholders, from fluctuations that may arise from unfounded rumors and speculation during the first phase of this transformation.
The Sultan center generates about 90% of its revenue from retail operations, 52% of which are generated from retail operations in Kuwait. TSC also operates supermarkets in Jordan, Oman, and Bahrain.
The ‘Kuwait Retail First” transformation plan aimed to refocus the company on its core retail business by exiting non-core assets and non-performing activities on the one-hand, and on the other hand focusing on enhancing its core retail business. Below are result highlights from the first phase of the transformation:
- Over KD 7 million in cash will be generated before 2017 year end, in addition to savings, from the sale of non-core and non-performing assets
- Reduced supplier dues in Kuwait by almost 45%
- Increased total gross margins by 3.5 percentage points in Kuwait by improving inventory productivity ratios, commercial practices and business terms with vendors without increasing prices
- Enhanced Group retail EBITDA by 32.3%, and Kuwait retail EBITDA by 51.6% as of September 30, 2017, compared to September 30, 2016
- Reduced expenses by KD 3.8 million as of YTD September 30, 2017, compared to September 30, 2016
- Focused on boosting Kuwait retail operations; Rationalized product assortment, optimized inventory KPI’s, and improved margins without increasing prices
- Renegotiated restructuring the debt portfolio with key lenders, the company is in advanced stages of signing several term sheets.
TSC Chairman Mr. Tarek Sultan said, "I am pleased to report to our shareholders that our transformation plan “Kuwait Retail First” is well on track. Over the last eight months we have put TSC Kuwait retail business on a path of growth, we have exited a number of non-core assets and non-performing businesses that weighed heavily on the business, and we reduced our supplier dues in Kuwait by close to 45%. Today, we are in the final stages of agreeing with our lenders on a restructure plan for TSC’s debt portfolio and we expect to have more good news to share with our shareholders soon”.
Group Financial Highlights
The rebounding direction highlighted by the company’s bottom line performance, despite lower revenues, reflects the enhanced operational efficiency the company witnessed in Q3.
Q3’17 Group Financial Highlights
- Revenue: KD 55.6 million, down 11.7% from Q3’16
- Expenses: KD 9.4 million, down 11.3% from Q3’16
- EBITDA: KD 2.1 million, up 2.8% from Q3’16
- Net Profit: KD0.8 million, up 88.0% from Q3’16
YTD Group 9-Month’17 Financial Highlights
- Revenue: KD 174.6 million, down 12.4% from YTD’17
- Expenses: KD28.3 million, down 11.8% from YTD’17
- EBITDA: KD7.2 million down 3.6% from YTD’17
- Net Profit: KD 2.2 million, up 33.1% from YTD’17
-Ends-
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Fawaz Al Sirri
Bensirri PR
+965 66622448
fawaz@bensirri.com
