Munib Rashid Masri: Palestinian people will not accept anything less than freedom and dignity, independence, and the current situation is prepared to recognize the rights of Palestinian
Samir Hulileh: Steady growth in profits as a result of continuous improvement in the financial performance of the projects, subsidiaries and affiliates.
PADICO HOLDING achieved a significant increase in its profits during the first half of 2014, as consolidated net profit reached USD 15.01 million, in comparison to USD 13.74 million during the same period of last year, recording an increase of 9.2%, while operating profits (EBIT) increased by 10.97% to reach USD 21.55 million during the first half of 2014, in comparison to USD 19.42 million during the same period last year.
Mr. Munib Rashid Masri, Chairman of the Board of Directors, said that the results expressed in the rapid increase in profits during the first half of 2014 are considered an indication that PADICO HOLDING is moving the right direction and according to the investment plans laid forward by the Board of Directors.
Mr. Masri went on saying that these results come at a time where Palestinians are facing an unprecedented aggression, one which calls for the Palestinian people to move even closer towards national unity and unanimity. He also asserted that the current situation requires a more serious Arab stance in support of the Palestinian people in order to protect them from the Israeli war machine.
Mr. Masri also stressed on the fact that the Gaza Strip is in a dire need for a full-on coordination of efforts from all stakeholders in order to provide urgent aid and interventions aimed to improve the situation. He also applauded the remarkable efforts put forward by PADICO HOLDING since the beginning of the aggression in an attempt to relieve the suffering of the Gaza Strip. These efforts are represented by the Company's endeavors to offer relief to displaced people living in shelters by providing them with the basic humanitarian, psychological and financial needs. Additionally, the Executive Club, owned by PADICO Tourism, held a consultative meeting on 7 August 2014, which hosted representatives from the government, the private sector, URWA, civil society as well as the coordinating council for private sector to discuss and find mechanisms for the private sector's involvement in supporting the Gaza Strip. Mr. Masri expressed the Company's, along with its subsidiaries and affiliates, firm commitment towards supporting the Gaza Strip in its ongoing distress especially after the end of the attack. Mr. Masri finally went on to assert that the persistence of the Palestinian people has been the determining factor in moving the world towards acknowledging their rights; as he stressed that the Palestinian people will not settle for anything that doesn't guarantee their freedom and dignity, and having a free and independent state.
Mr. Samir Hulileh, CEO of PADICO HOLDING, said that this increase in profits comes as a result of the ongoing improvement in financial performance for a number of PADICO HOLDING projects and subsidiaries. He also added that there are a number of projects that are still in the establishment stage, as their ongoing constituent expenses weigh on the consolidated income statement like Rabiyet Al-Quds Project, Al-Ghadeer Project, the Executive Club Project and Jericho Gate Project. He went on saying that it is expected that these projects will result in a significant increase in profits in the near future once they become operational.
Total consolidated revenues reached USD 60.32 million during H1/2014, recording a growth of 10.6% compared to USD 54.53 million for the same period of the past year. This increase can be mainly attributed to the increase in subsidiaries' operating revenues by USD 4.20 million during H1/2014, reaching USD 36.90 million with a growth of 12.8 % compared to USD 32.70 million for H1/2013. The rise of operating revenues of Palestine Industrial Investment company (PIIC), Palestine Stock Exchange, and NAKHEEL Palestine contributed mainly to this growth.
Additionally, PADICO HOLDING's share of associates' results of operations increased by 8.2% from USD 20.62 million for the H1/2013 to USD 22.30 million for H1/2014. This was mainly resulted from the increase in PALTEL Group's net profit by 5.9% from JD 45.34 million for H1/2013 to JD 48.05 million for H1/2014, along with the increase in profits of Vegetable Oil Industry Company from JD 1.82 million to JD 2.67 million for the mentioned periods, Respectively. The gain from financial assets portfolio has decreased during H1/2014 to reach USD 1.12 million, compared to USD 1.26 million for H1/2013.
Total consolidated expenses increased by 9.5%, reaching USD 45.50 million for H1/2014 compared to USD 41.57 million for the same period of 2013. This increase is mainly attributed to the increase in operating expenses which was increased by 12.1%, from USD 23.63 million for H1/2013 to USD 26.48 million for the same period of 2014. Also, general and administrative expenses increased by 2.7% from USD 7.90 million for H1/2013 to USD 8.11 million for H1 current year. Additionally, finance costs increased from USD 5.19 million for H1/2013 million to USD 5.76 million for H1/2014 in parallel with the increase in average total debt from USD 218.05 million for the first half of 2013 to USD 225.86 million in the same period of the current period.
Financial Position for H1/2014
Total assets increased slightly by 2.7% reaching USD 830.75 million at the end of H1/2014 compared to USD 808.67 million at the end of 2013. Additionally, equity attributable to equity holders of the parent company increased by USD 10.52 million from USD 418.84 million by the end of 2013 to USD 429.36 million by the end of H1/2014, recording an increase by 2.5%.
Total liabilities increased by 4.3% from USD 288.11 million at the end of 2013 to USD 300.45 million at the end of the first half of 2014 with an increase by USD 12.34 million. Furthermore, total debt, which comprises bonds, bank loans and credit facilities, constituted almost 75% of total liabilities, and reached USD 225.61 million by the end of H1/2014 compared to USD 226.12 million by the end of 2013 recording a slight decrease of USD 0.51 million. These debts include the bonds that was issued by PADICO HOLDING in 2011 with a nominal value of USD 85 million.
Main Recent Developments for Projects
In regards to the progress of NAKHEEL Palestine, the largest Medjoul date farms in Palestine, the dates harvest in NAKHEEL Palestine for the season 2013/2014 ran out early this year, due to the hard work of the marketing and sales team that opened more than ten international markets this year, in addition to the six existing markets. Additionally, the Company applied new strategies in the Palestinian market marketing which led to an increase in sales, especially ahead of the holy month of Ramadan.
As a proof of the company's exceptionally high standards in the process of developing, packaging and storing its products, "NAKHEEL Palestine" has been awarded with a superior taste award with three golden stars from the International Taste and Quality Institute (iTQi) in Brussels. This award is considered the highest honor in the competition for a superior taste. NAKHEEL Palestine is the only company in the Arab world to be honored with this award, which is rarely given to any other company. This is the second time NAKHEEL Palestine receives an award from the iTQi, as it was awarded with two golden stars in 2013.
Jericho Gate Project
Jericho Gate project managed to reach an agreement with the Jericho Municipality that entitles conducting a detailed structural plan study for the project separately from the one which will be done for the city of Jericho. The company also commenced in opening up parts of the internal streets connecting the public square to the main road leading to the previously Intercontinental Hotel (currently Oasis Hotel), which will serve as the main entrance for the project. This road made it easier for visitors to get to the project and explore the area. The Jericho Municipality also approved the structural plan for the project, and now waiting for the final approval from the Supreme Regulation Council.
A number of engineering students from Palestine Polytechnic University recently visited the Project in order to get to know its location, geographical nature and components in order to prepare geometric designs of the project. In addition to that, a number of sport events also took place in the project, most notably of which being the Palestinian rally race as well as the horserace festival for Jericho.
The company is currently preparing the detailed designs and plans for roads, water, waste water as well as electricity and telecommunications networks. It has also set plans to start implementing related infrastructural plans for the first stage of the project, which sits on 1000 dunums, by the last quarter of the current year. It's also worth noting that this project is expected to have a great positive impact on its surrounding communities.
Palestine Power Generation Company (PPGC)
Palestine Power Generation Company has restructured its capital where Gaza Electricity Company has reduced its share from 43% to 5%, and has been replaced by the entry of the Palestinian Telecommunications Company, the Arab Bank, and the Palestinian Investment Fund in addition to PADICO HOLDING. PPGC has completed all the necessary preparations for signing the final agreements with the Palestinian National Authority, and the station is expected to start its work by the end of 2016. Furthermore, PPGC decided to raise its capacity from 200 megabytes to 400 megabytes.
The Executive Club
PADICO HOLDING opened the Executive Club project, owned by PADICO Tourism, in Al- Tireh/Ramallah. The project is considered the first of its kind in Palestine, offering a variety of services needed by the business community including a suitable environment for businesses, luxurious facilities and community activities to cater the members.
PADICO HOLDING's future plan focuses on maintaining and developing its investments, completing the implementation of some of these projects that are currently under construction, and improving the performance and profitability of the current existing projects. As for bolstering the cash flow and reducing debt and administrative expenditures, the company will continue to apply its plan, aiming at limiting and controlling administrative and general expenditures and continuing to reduce the debt of the company in the next few years. Additionally, all efforts to rebuilding and supporting the Gaza Strip will be an essential element of the Company's strategy as we as its subsidiaries and affiliates.