Kuwait Times, Sunday, May 07, 2023 | Shawwal 17, 1444
Gulf Cables to distribute cash dividend of 60 fils per share
Kuwait :
The Gulf Cables & Electrical Industries Group Co
(KSCP) at its ordinary general assembly meeting approved the distribution of
cash dividends of 60 fils per share to shareholders registered with the company
in accordance with the rules in force at Boursa Kuwait. Chairman of the Board of
Directors Asaad Al-Banwan said: “The company continued its successful path due
to efforts by the executive management and based on the implementation of the
plans and directives of the board of directors, which were based on a number of
objectives. This strategy took into account the rapid economic changes global
and local economies are facing and ensures our steady progress on the path to
achieving sustainable profitability.”
Vice Chairman of the Board of Directors at Gulf Cables Bader Nasser Al-Kharafi
said after the board meeting: “The company has become, as its shareholders
aspire, a diversified investment system that operates within the framework of a
holding entity. The company continued its planned expansion in accordance with
the strategic plan approved by the board of directors and approved by the
general assembly.”
Al-Kharafi added that despite the challenging local and global economic
conditions, the group’s growth momentum continued on the business front. “The
company has achieved a quantum leap in its performance through the
diversification of its income sources, as many tools and companies that cover
different sectors, whether operational or service based, fall under its
umbrella, which ensures its financial as well as operational stability,”
Al-Kharafi explained.
Al-Kharafi added “the company, as promised to its shareholders, has achieved a
large part of its strategic objectives that guarantee it sustainable
profitability within the framework of integrated financial stability”.
Financial performance
Gulf Cables achieved a total revenue of KD 113 million for the year 2022, with a
growth rate of 39 percent, compared to a total of KD 81.3 million achieved in
2021. The group’s total revenues consist of three main components — cable sales,
investment revenues and service providing revenues.
Book value
The total equity of Gulf Cables’ shareholders increased in 2022 to reach KD
227.8 million compared to KD 227 million at the end of 2021, which led to an
increase in the book value of a share to KD 1.093 compared to KD 1.086 at the
end of 2021. According to Al-Kharafi: “Total revenues from cable sales amounted
to KD 99.3 million, compared to KD 65.5 million for the year 2021, as the parent
company achieved sales related to cable products at a value of KD 77.1 million,
compared to KD 50.3 million for the year 2021, with an annual growth rate of
53.4 percent.” He said the subsidiary company in the Hashemite Kingdom of Jordan
(Gulf Cable and Multi Industries Company) achieved sales of KD 22.2 million,
compared to KD 15.2 million in 2021, with an annual growth rate of 46.5 percent.
“This growth in cable revenue is due to higher demand from the private sector
following the recovery from the COVID pandemic and growth in export sales at our
subsidiary,” Al-Kharafi added.
HEISCO acquisition
Al-Kharafi clarified that the group’s strategy regarding the acquisition of 28.3
percent of the shares of the shipping company HEISCO is flourishing through the
reflection of the good and positive performance of the company on the group’s
share of profits, by achieving a share of the company’s results for this year at
a value of 1.6 percent worth KD 1 million, and cash dividends for the year 2021,
amounting to KD 1.0 million.
“Our investment in HEISCO reflects the group’s plan to diversify its investment
portfolio and sources of income and focus on investing in companies of an
industrial and operational nature to ensure the achievement and sustainability
of the group’s vision,” he explained, pointing out that the book value of the
group’s ownership stake on Dec 31, 2022 amounted to KD 30.5 million, compared to
KD 29.9 million on Dec 31, 2021.
National investments
Gulf Cables has raised its stake in ownership of the National Investments
Company during 2022 to reach about 27.0 percent, compared to 25.4 percent at the
end of 2021. This is in continuation and realization of the group’s absolute
belief that the group becomes a major shareholder in this type of unique
investment opportunity that is characterized by its stable nature and
diversified assets that achieve the highest possible rate of return,
distinguished by high quality and diversified services with highly efficient
management.
The group’s ownership in National Investments Company reached this year a share
of KD 2.1 million, as well as cash dividends for the year 2021 amounting to KD
9.6 million. It is worth noting that the book value of the group’s ownership
stake on Dec 31, 2022 amounted to KD 54.9 million, compared to KD 55.0 million
on Dec 31, 2021.
Joint venture with Riyadh Cables and
Electrical Industries Company
Gulf Cables with a total capital of KD 5.0 million determined the main purpose
of the company, which is the manufacture of electrical and electronic wires and
cables, with the group contributing 50 percent of the capital of the new
company.
The establishment of the company comes to achieve the goals and plans of the
group represented in promoting its products and future aspirations through
obtaining the latest technologies related to the manufacture of high-voltage
cables in accordance with local and international standards after the group
signed in 2021 a joint venture agreement with Riyadh Cables Group Company to
establish a factory in Kuwait specialized in manufacturing high voltage cables.
Investment policy
“The investment group’s strategy is characterized by a policy of a medium- to
long-term nature, and by diversifying the investment portfolio by selecting low-
and medium-risk stock options in various activities and industries with a
moderate geographical distribution, in order to ensure achieving a high and
continuous return and to ensure the possibility of interaction with negative
indicators that may lead to affecting the financial performance of the group, so
that it is exited whenever the opportunity becomes favorable to achieve a high
and rewarding return upon sale,” Al-Kharafi said.
Exceptional profit
“Significantly, this year the investments achieved an exceptional profit, mainly
due to the profits resulting from the exit from our investment in Egyptian
Kuwaiti Holding Company and Kuwait Gate Holding Company, with profits amounting
to KD 14.9 million and KD 4.1 million respectively, with a total of KD 19.0
million recorded. Directly in the retained earnings account, the group also
obtained dividends from its investments during the year amounting to KD 6.7
million, compared to KD 1.6 million in 2021,” Al-Kharafi explained.
Future outlook
Looking to the future, Al-Kharafi said: “We are confident of our ability to
achieve the desired growth through the strategy set by the board of directors,
as the group keeps pace with modern technology in the industry. Within this
framework, the group signed a contract to purchase a new production line for low
and medium voltage cables, which will reflect positively on the speed of
production and the size of the parent company’s production capacity starting
from 2024, as it will in turn meet the expected growth of the markets and
increase the size of the local and regional presence of the group.”
Loan reduction
The total value of term loans and Islamic financing facilities decreased by KD
28.2 million to reach KD 43.9 million at the end of 2022, compared to KD 72.1
million at the end of 2021.
Upgrade continuation
Al-Kharafi pointed out the group’s management systems, policies and procedures
will continue to be updated regularly and adopt new global digital
transformation technologies to gain more flexibility and competitiveness and
enhance efficiency across the group’s companies and sectors.
Customer needs and the first market
“The company is keen to understand and fulfill the needs of their customers, as
well as make every effort to satisfy them by focusing on quality and developing
staff in a way that supports achieving the best returns and maximizing the value
of shareholder equity,” Al-Kharafi said. He drew attention to the group’s
presence among the premier market companies on Boursa Kuwait. “It is an elite
market for the best listed companies that are characterized by high liquidity
and medium to large market value, in addition to providing a high degree of
transparency and commitment by the companies of this market.”
Exceptional vision
Al-Kharafi explained the importance of continuing the company’s unique culture
with regards to “innovation-driven entrepreneurship, which is the main pillar of
our continuous success year after year, keeping pace with the group’s vision,
which is based on investing expertise, financial and human resources and assets,
which in turn increases the streams of income and enhances the growth of
revenues and profitability of the group.”