Alsalam Holding Company
Alsalam Holding Company

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Alsalam Holding Company

Al-Salam Group Holding Company

Chairman Message 2020

 

In the name of Allah the most gracious the most merciful

 

Dear shareholders,

We are pleased to welcome you after a year full of challenges at all levels locally, regionally and globally, and we present to you the annual report for the fiscal year ended December 31, 2020.

In 2020, Corona virus epidemic spread, which had a negative impact on all global economies and markets in general, especially services sectors, starting from the effects of precautionary procedures taken by all countries of the world to reduce the epidemic, leading to the major deflation caused by slowing markets and economies, low oil prices and global and regional tensions.

While in MENA region, and according to experts, the accumulated cost of the pandemic in terms of GDP losses by the end of 2021 is estimated at USD 227 billion. It’s expected that the economies of the region will recover partially in 2021 by 2.2%, depending on the fair of distribution of vaccines.

Locally, the World Bank expected that Kuwait will record a real GDP growth of 2.4%, and 3.6% in 2021 and 2022 respectively, compared to a 5.4% deflation in 2020 caused by the significant dependence on oil revenues, which represents 90% from the budget revenues of Kuwait.

Boursa Kuwait has been also affected by the crisis of Corona virus like other regional and global markets, as the closure of activities and the suspension of transportation and airports have led to a panic among the investors, a decline in the confidence and the market value and the historical shrinking in oil prices caused by the fear of economic recession, a decline in demand, a rise in supply, and an increase in the global oil stocks. The financial results of listed companies and banks have been significantly affected, as the banking sector relapsed as a result of the closure, the deflation of economic activity, the decline in fees and commissions income and the sharp increase in provisions.

With regards to our company, it recorded a decrease in its assets by 24% to reach KD 28,921,632 after it was KD 38,007,522 in 2019, mainly due to the decline in investments in associates, accounts receivable, also the decrease in intangible assets, in addition to a decrease in investments at fair value. The company’s assets are concentrated within its investments in associate companies by 72% with a total balance of 20,906,385 KD in 2020.

On the other hand, total liabilities also decreased by 24% to reach KD 3,047,288 compared to KD 4,029,563 in 2019, mainly due to the decrease in accounts payable and other credit balances by 25%, where it was KD 3,888,858 in 2019 and became KD 2,915,520 in 2020.

Total equity also decreased by approximately 24% to record KD 25,874,344 in 2020 compared to KD 33,977,959 in 2019, the book value per share reached about 90 Fils.

As for the company's 2020 business results, total revenues and investment profits reached KD 194,437 in 2020 compared to KD 1,344,295 in 2019, while the company tried to reduce G&A expenses, which decreased by 16% to reach KD 575,140 in 2020 compared to KD 681,515 in 2019.

Net loss reached KD 7,932,036 in 2020, as a result of recording impairment of goodwill of KD 3,822,440, as well as recording provisions of KD 2,535,722, in addition to a negative share in the results of associate companies by KD 1,193,171. Loss per share reached 25 Fils, compared to a net profit of KD 375,921 and EPS of 0.13 Fils in 2019.

 

 

It is worth mentioning, that the BOD recommends not to distribute cash dividends nor bonus shares for the year ended December 31, 2020 and not to distribute bonuses to BOD members, noting that these recommendations are subject to the approval of the General Assembly. We also affirm that the members of the BOD did not obtain any benefits during the year. The BOD also undertakes to the shareholders that the reports and the consolidated financial statements are correct and has been presented with integrity for the year ended December 31, 2020.

Finally, I would like to thank you very much for your trust handed to us, and we ask Allah almighty to help us achieving the Company’s objectives and the shareholders’ ambitions.

May Allah’s peace, mercy and blessings be upon you.

 

 

Chairman