QNB Investor 2003

Transcription

QNB Investor 2003

Qatar IG 2003 intro pages 9/9/03 9:34 am Page 1
QATAR INVESTOR’S GUIDE
Qatar
An Investor’s Guide 2003
Qatar National Bank
MEED
sixth edition
Published by EMAP Media
®
Published by
Emap Media
33-39 Bowling Green Lane, London EC1R ODA
Telephone
+(44) (0) (20) 7470 6200
Fax
(+44) (0) (20) 7242 1450
Editor-in-chief
Edmund O’Sullivan
E-mail: [email protected]
Written and researched by
Edmund O’Sullivan and Euan Rabbatts
Art Director
Hassan Yusuf
Art editor
Michael Sullivan
Proofreader
Jane Bishop
c 2003 Emap Business Communications
All rights reserved. No part of this publication may be reproduced, stored in any retrieval system, or transmitted in any
form by any means, electronic, mechanical, photocopying,
recording or otherwise without the prior permission of the
copyright owner. The data in this guide was compiled from
information provided by the establishments included in this
directory. The completeness of the guide is therefore
dependent on the provision of information by the individual
establishments, and the accuracy of the guide is subject to
their errors or omissions. While every care has been taken
in compiling this guide, no responsibility can be accepted
for any errors or omissions that may occur.
ISSN 1460-3365
Q AT A R : A N I N V E S T O R ’ S G U I D E 2 0 0 3
1
FOREWORD/PREFACE
Foreword
Welcome to the sixth annual edition of Qatar: An Investors’ Guide published in association with Qatar National
Bank (QNB). This report is designed to provide potential investors in Qatar, the GCC and elsewhere with key
facts they need to make informed choices about companies listed on the Doha Securities Market (DSM). It contains a guide to Qatar and the Qatari economy, information about the DSM and, crucially, a wide range of facts
and analysis about all 27 companies quoted on the DSM at the start of September 2003.
The timing of this report is impeccable. Qatar has entered the first stages of a remarkable period of economic
buoyancy signalled by the start of liquefied natural gas (LNG) exports at the end of 1996. This year, the country
will export about 14 million tonnes to foreign buyers. The aim by the end of this decade is for exports to rise to
70 million tonnes and more, making Qatar the world’s leading LNG exporter.
Simultaneously, investment in the crude oil sector has allowed Qatar to lift oil production to a record level, partly to fulfil its role within OPEC which has decided to seek to make up the supply shortfall caused by the interruption of Iraqi exports in March 2003.
In addition, Qatar is accelerating investment in downstream, gas-intensive industries. In 10 years’ time, one of
the largest industrial complexes in the Middle East will have been established in Ras Laffan and its twin industrial city Mesaieed.
These developments are to some extent no more than scene-setting for the larger dramas to be played out in
Qatar over the next three years. In December 2006, Doha will host the Asian Olympic Games, the largest sporting event ever to be held in the Middle East. Investment in the city and elsewhere in the country will be extensive and rapid.
The consequence is that Qatar is comfortably the fastest-growing economy in the world. Per capita income is set
to double in the next five years to be the highest on earth.
This achievement is not the result of luck. Careful planning and bold decision-making in the mid-1990s is now
bearing fruit to the benefit of the people of Qatar and its friends.
These happy developments are echoed in the performance of the DSM and the 27 companies listed on it. The
figures speak for themselves. In 2002, every listed firm made a profit and most reported sharp increases in earnings. The DSM general index at the end of June was more than 30 per cent up on its level on 31 December 2002.
Turnover has increased sharply. This year, four more firms were listed on the exchange. More will follow.
Preface
I would like to express my sincere thanks to all those who helped MEED produce this report, particularly the
very helpful general managers and chief executives of Qatar’s quoted banks and firms. It would have been
impossible without the assistance of the DSM and its executives. We are once more indebted to Qatar National
Bank (QNB) for its sponsorship of the guide.
We know that this guide will be of great value to all those seeking to make the most of the opportunities emerging in Qatar in the years to come. The future is bright. Enjoy the guide and best wishes in your activities.
Edmund O’Sullivan
Publishing Director
MEED
September 2003
2
By sector
By company
Page number
Foreword/Preface
Introduction to Qatar
CONTENTS
Page number
2
Al-Ahli Bank of Qatar
10
Al-Ahli Hospital Company
24
4-7
Banking
Qatar National Bank
8-9
Alkhaleej Insurance Company
19
10
Commercialbank
11
Commercialbank
11
Doha Bank
12
Doha Bank
12
Doha Insurance Company
23
Qatar Islamic Bank
13
Qatar International Islamic Bank
14
Industries Qatar
32
Qatar Cinema & Film Distribution Company
25
Qatar Electricity & Water Company
26
Qatar Flour Mills Company
15
Qatar Fuel Company
32
Qatar General Insurance & Reinsurance Company
20
Qatar German Company for Medical Appliances
16
Qatar Industrial Manufacturing Company
18
Qatar Insurance Company
21
14
Qatar Islamic Bank
13
Qatar Islamic Insurance Company
22
Qatar National Bank
8-9
Qatar National Cement Company
17
Qatar Navigation
27
Qatar Real Estate Investment Company
28
Qatar Shipping Company
29
Qatar Technical Inspection Company
32
Qatar Telecom
30
Salam International Investment
31
United Development Company
32
Industrial
15
16
17
18
Insurance
19
20
21
22
23
Services
24
25
26
Qatar Navigation
27
28
29
Qatar Telecom
30
31
New listings
Industries Qatar
32
Qatar Fuel Company
32
32
32
3
INTRODUCTION
Qatar
Key facts
Head of State Sheikh Hamad bin Khalifa al-Thani
Qatar: gross domestic product (GDP) at current prices, 1997-2002 (QR million)
Population
Area
Exports
70,000
Imports
60,000
GDP
621,000 (estimate)
11,437 square kilometres
$10,978 million (2002)
$3,650 million (2002)
$17,466 million (2002 preliminary)
50,000
40,000
30,000
1997
1998
1999
2000
2001*
2002*
* Preliminary Planning Council figures
Introduction
THE
DYNAMIC
QATAR
T
he Qatari economy continues to evolve rapidly
from a primarily oil-based economy to one that
increasingly includes hydrocarbons such as liquefied natural gas (LNG), condensate, propane,
butane and other natural gas liquids (NGL). The reflections of these developments can be seen in Qatar’s nominal gross domestic product (GDP) growth, which has
averaged a record 13.9 per cent over the past three years.
Preliminary GDP estimates by the Planning Council for
2002 indicate a growth rate of 2 per cent to
QR 63,580 million ($17,470 million) (Table). Revised figures for 2002 could indicate a slightly higher GDP growth
rate of about 5 per cent. Revised data for the year 2000
shows that nominal GDP had risen by a record 43.3 per
cent in that year to reach QR 64,650 million ($17,760 million), mainly as a result of increased activity in the oil and
gas sector, which witnessed an increase by 89 per cent
over the previous year. Revised estimates for 2001 shows
that GDP declined by 3.6 per cent in that year, to reach
QR 62,350 million ($17,130 million). This was due to
lower Qatari oil prices that averaged $23.60 a barrel in
2001, declining by 12.9 per cent from the 2000 level of
$27.10 a barrel.
Qatar’s rapid economic growth has given it one of the
highest per capita incomes in the world. In 2000, GDP per
capita reached $30,620, and preliminary figures put it at
$28,545 for 2001. For 2002, figures released by the
ECONOMY IS EVOLVING
RAPIDLY
Qatar: gross domestic product (GDP) by sector, 1997-2002 (QR million)
Oil sector
Agriculture and fishing
Manufacturing
Electricity and water
Building and construction
Trade, restaurants and hotels
Transport and communications
Finance, insurance and real estate
Other services
GDP at current prices
GDP at current prices ($ million)
GDP per capita ($)
GDP growth (%)
1997
1998
1999
2000
2001*
2002*
17,386
290
3,417
482
2,873
2,762
1,451
3,969
8,494
41,124
11,298
21,609
24.7
13,005
256
2,938
611
2,723
3,162
1,867
4,505
8,263
37,330
10,255
18,990
-9.2
20,644
263
2,869
730
2,409
3,339
1,909
4,627
8,321
45,111
12,393
22,130
20.8
39,065
241
3,515
780
2,330
3,750
2,006
4,703
8,256
64,646
17,760
30,620
43.3
36,620
250
3,520
785
2,340
3,770
2,020
4,721
8,315
62,341
17,127
28,545
-3.6
37,500
255
3,600
795
2,390
3,795
2,120
4,793
8,330
63,578
17,466
28,125
2.0
* Preliminary Planning Council figures
Source: Planning Council
4
Exchange rate: $1=QR 3.64
Planning Council show that GDP per capita remains relatively high at $28,125.
Balance of Payments
Data for 2001 from the Planning Council and Qatar Central
Bank (QCB) shows that the total value of Qatar’s exports
declined by 6.2 per cent to QR 39,580 million ($10,880 million), compared to QR 42,200 million ($11,593 million) in
2000 (Table). Imports increased by 15.6 per cent to
QR 12,300 million ($3,400 million), compared to
QR 10,670 million ($2,931 million) in 2000. Net outflow of
services and private transfers were QR 12,130 million ($3,332
million), while capital transfers amounted to QR 5,560 million ($1,530 million), producing an overall surplus in balance of payments of QR 9,560 million ($2,630 million).
For 2002, figures released recently by the Planning
Council show exports rose by 1.0 per cent to reach
QR 39,960 million ($10,978 million), with imports increasing by 7.8 per cent to reach QR 13,290 million ($3,651 million). The overall surplus in balance of payments for 2002
was QR 6,510 million ($1,788 million). Qatar has been
witnessing an improved balance of payments situation
since 1999, mainly as a result of increased LNG exports.
State Budget
The 2003/04 state budget, covering the period from 1 April
2003 to 31 March 2004, revealed a 40 per cent increase in
allocations for major public projects to reach
QR 6,150 million ($1,700 million), as compared to
QR 4,400 million ($1,209 million) in the previous budget
(Table). The 2003/04 budget estimates total revenues at
QR 21.6 billion ($5.9 billion) and total expenditures at
QR 23.3 billion ($6.4 billion), resulting in an overall deficit
of QR 1.7 billion ($467,000 million). Total revenues are
budgeted to increase by 18.6 per cent over the preceding
budget, while total expenditures are budgeted to increase
by 16.4 per cent. The 2003/04 budget is based on a conservative oil price assumption of $17 a barrel, compared
to a $16 a barrel assumption in the previous budget.
In the 2003/04 budget, the public services and infrastructure sector received QR 4,270 million ($1,173 million) of the
total funds allocated for major public projects, which represent an increase of 38.2 per cent over the preceding budget
allocation of QR 3,100 million ($851.6 million) (Table).
Most notable among the allocations in the public services
and infrastructure sector was QR 1,000 million ($274.7 million) for roads, QR 1,100 million ($302.2 million) for land
acquisition and reform and QR 657.5 million ($180.6 million) for sewerage works, all of which recorded a significant
INTRODUCTION
Qatar
to Qatar
increase from the previous budget allocations.
Allocations to the Education & Youth welfare sector
increased by 130 per cent to QR 961 million ($264 million).
After more than a decade of deficits, Qatar managed
to record a surplus in the 2000/01 budget. Cumulative
surpluses in the three fiscal years to the end of 2002/03
amounted to QR 11,505 million ($3,161 million). This
represents a major transformation and is indicative of
larger surpluses to be realised through until the end of
this decade.
Actual figures for the 2001/02 budget show total revenues reached QR 22,760 million ($6,253 million), total
expenditures reaching QR 20,500 million ($5,632 million)
resulting in an overall surplus of QR 2,300 million ($631.8
million). Preliminary figures for the 2002/03 budget
released recently by the Ministry of Finance show total
revenues at QR 26,640 million ($7,319 million), and total
expenditures at QR 22,520 million ($6,187 million),
resulting in a surplus of QR 4,120 million ($1,132 million). Oil prices averaged $26.80 a barrel during the fiscal
year 2002/03, against a conservative budgeted oil price
assumption of $16 a barrel. LNG exports reached
13.5 million tonnes in 2002.
THE
banking sector represented 45.6 per cent of the total value of
shares traded, followed by services (42 per cent), industry
(7.3 per cent) and insurance (5.1 per cent). The DSM’s exceptional performance continued in 2002, with the index increasing by 37.3 per cent following an increase of 37.2 per cent in
2001. The substantial increase in traded shares and the index
is due to the brighter outlook for the economy and the
improved performance of DSM listed companies. In 2002, the
net profit of DSM listed companies amounted to QR 2,879.5
million ($791.1 million), a 17.4 per cent rise from the 2001
level of QR 2,452.7 million ($673.8 million).
The DSM market capitalisation increased by 44 per cent to
reach QR 38,500 million ($10,600 million) as at
31 December 2002, compared with QR 26,700 million ($7,300
million) at the end of 2001. As at 31 December 2002, Q-Tel
and Qatar National Bank’s market capitalisation represented
28 per cent and 22 per cent of the total market.
BANKING SECTOR IS
PROFITABLE AND GROWING
Qatar: current account, 1998-2002 (QR million)
20,000
Ratings Upgrade
In July 2003, Standard & Poor’s (S&P) upgraded Qatar’s
long-term foreign currency issuer credit and senior unsecured debt ratings from A- to A+. Qatar’s long-term local
currency issuer credit ratings were also upgraded from A
to A+. Qatar’s short-term foreign and local currency
issuer credit ratings were maintained at A-1 (Table).
In August 2002, Moody’s Investors Service raised by
two notches Qatar’s foreign currency country ceilings for
bonds and deposits to A3 from Baa2. Moody’s also
upgraded to A3 the ratings of the State of Qatar’s outstanding foreign-currency denominated bonds and its
issuer rating for local currency obligations.
In September 2002, Capital Intelligence announced
that it had raised Qatar’s sovereign long-term rating to
A- from BBB+.
Doha Securities Market
Twenty-seven companies are currently listed on the securities
market, which include the banking, insurance, services and
industrial sectors, with additional companies expected to be
listed on the market this year. Trading activities at the DSM
in 2002 witnessed a 113.8 per cent rise in the value of shares
traded, to reach a record QR 3,200 million ($879.1 million),
from QR 1,500 million ($412.1 million) in 2001. In 2002, the
16,000
12,000
8,000
4,000
0
-4,000
1998
1999
2000
2001
2002
Qatar: balance of payments, 1998-2002 (QR million)
Exports, FOB
Imports FOB
Trade balance
Services, private and official transfers
Current account
Net capital transfers
Overall balance
1998
1999
2000
2001
2002
18,311
11,177
7,134
8,792
-1,658
1,483
-175
26,258
8,196
18,062
10,159
7,903
1,043
8,946
42,202
10,664
31,538
14,883
16,655
-6,858
9,797
39,571
12,323
27,248
12,134
15,114
-5,558
9,556
39,960
13,287
26,673
12,754
13,919
-7,408
6,511
Source: The Planning Council and Qatar Central Bank
5
INTRODUCTION
Qatar
Qatar: major banking indicators, 2002 (QR million)
Qatar National Bank
Total
assets
Customer
deposits
Loans
Equity
Net profit
580
31,056
23,600
19,953
4,981
Doha Bank
7,414
6,278
3,217
819
121
Commercialbank
6,141
4,390
3,153
787
159
Qatar Islamic Bank
5,126
4,186
4,251
422
101
Al Ahli Bank of Qatar
2,156
1,569
857
252
64
3,243
2,652
2,683
242
51
Grindlays Qatar Bank
1,140
968
595
144
36
Qatar Industrial Development Bank
Total Qatari banks
287
0
36
268
6
56,563
43,642
34,746
7,913
1,117
Total foreign banks
6,888
5,546
3,434
706
173
Total banking sector
63,450
49,188
38,181
8,619
1,291
11.7
11.2
7.2
10.2
33.3
% change on 2001
Note: foreign banks' profit on after-tax basis Source: bank's annual reports Exchange rate: $1=QR 3.64
Qatari Banking Sector
INFLATION
IS LOW DESPITE
ROBUST MONEY SUPPLY
GROWTH
The Qatari banking sector comprises both local and foreign banks. There are currently 15 banks, eight of which
are Qatari-owned, including five commercial banks, two
Islamic banks, and the specialised Qatar Industrial
Development Bank (QIDB). In addition, two Arab and
five foreign banks are represented in Qatar. Qatar
National Bank (QNB) is the largest bank in Qatar, and
has the widest distribution network in the country, with
33 branches and offices in Qatar, supported by a network
of 64 ATMs. QNB also has international branches in
London and Paris.
The 2002 results for the Qatari banking sector reveal
another year of sustained profitability, with total net
income increasing by 33.3 per cent to QR 1,300 million
($357 million) (Table). Assets increased by 11.7 per cent to
QR 63,450 million ($17,431 million), customer deposits by
11.2 per cent to QR 49,200 million ($13,516 million), and
loans and advances by 7.2 per cent to QR 38,200 million
($10,495 million). Shareholders’ equity grew by 10.2 per
cent to QR 8,620 million ($2,368 million). Other key performance ratios indicated a return on average assets of
2.15 per cent, return on average equity of 15.7 per cent, and
loans and advances to customer deposits of 77.6 per cent.
Money Supply
Domestic liquidity (M2) is robust. It grew by 7.7 per cent
during the first half of 2003 to QR 34,300 million ($9,423
million) (Table). Demand deposits soared by 60.9 per
cent to reach QR 8,200 million ($2,253 million). Savings
and time deposits declined by 11.4 per cent to
QR 16,830 million ($4,624 million).
Inflation
Inflation in Qatar is relatively low and averaged 1.7 per
cent over the past five years. In 2002, the inflation rate
declined to 0.2 per cent, compared to 1.4 per cent in
2001. A significant change in the general consumer
price index occurred in 2002. The base year was changed
from 1988 to 2001. The weights on the index also
changed, based on a Family Expenditures Survey conducted by the Planning Council.
Doha Securities Market in 2003
Trading activities for the first half of 2003 recorded a
113.5 per cent rise in the value of shares traded over the
corresponding period in 2002, to reach QR 4,000 million
($1,100 million). The DSM index rose by 37.3 per cent
during the first half of 2003.
The DSM market capitalisation increased by 38.7 per cent
during the first half of 2003, to reach QR 53,400 million
($14,700 million), compared with QR 38,500 million
($10,600 million) at year-end 2002. As at 30 June 2003,
Q-Tel and Qatar National Bank's market capitalisation represented 26 per cent and 18.5 per cent of the total market.
Doha Securities Market, 1998-2003
Shares traded (million)
Value of shares traded (QR million)
Number of transactions
Market capitalisation (QR million)
General index
1998
1999
2000
2001
31.20
969.90
7,747
13,916
1,351.30
35.30
1,232.30
13,964
20,031
1,341.00
31.61
869.00
12,225
18,806
1,233.30
51.01
1,503.70
15,771
26,721
1,692.20
2002 June 2003
79.61
3,215.02
29,787
38,475
2,323.84
71.54
3,998.35
35,195
53,367
3,189.48
Source: Doha Securities Market Exchange rate: $1=QR 3.64
Qatar: money supply trends, 1999-2003 (QR million)
Currency with the public
Demand deposits
M1
Savings and time deposits
Foreign currency deposits
Total quasi money
M2
Source: Qatar Central Bank Exchange rate: $1=QR 3.64
6
1999
2000
2001
2002
June 2003
1,714
2,465
4,179
14,946
6,858
21,804
25,983
1,673
2,776
4,449
17,898
6,409
24,307
28,756
1,741
3,478
5,219
18,390
5,145
23,536
28,755
1,921
4,368
6,289
19,002
6,856
25,858
32,147
1,890
8,208
10,098
16,828
7,682
24,510
34,608
INTRODUCTION
Qatar
THE
Doha Securities Market: bank share prices, 31 August 2003 (QR)
MARKET CAPITALISATION
DSM ROSE TO
ALMOST QR 100 BILLION
THE END OF AUGUST
OF THE
120.00
AT
100.00
80.00
60.00
40.00
20.00
0
Qatar National
Bank
Al-Ahli
Bank of Qatar
Commercialbank
Doha Bank
Qatar Islamic Bank
Qatar International
Islamic Bank
Doha Securities Market: bank market capitalisations, 31 August 2003 (QR million)
12,000
10,000
8,000
6,000
4,000
2,000
0
Qatar National
Bank
Al-Ahli
Bank of Qatar
Commercialbank
Doha Bank
Qatar Islamic Bank
Qatar International
Islamic Bank
Doha Securities Market: key facts, August 2003
Company
Share price on Share price on Change in price Number of Market capitalisation EPS 2002 % (QR)
18-08-03 (QR) 31-12-02 (QR)
from 31-12-02 issued shares
(QR million)
PE
BVS 2002 (QR)
PBV
Banks
Qatar National Bank
Commercialbank
Doha Bank
Qatar Islamic Bank
117.00
79.00
102.10
127.40
88.00
97.00
83.00
36.00
76.00
83.00
43.50
61.50
40.96
119.44
34.34
53.49
102.30
57.72
103,820,772
18,281,250
29,663,055
23,994,140
25,000,000
12,500,000
12,147.03
1,444.22
3,028.60
3,056.85
2,200.00
1,212.50
5.59
3.51
6.69
6.56
4.03
5.06
20.93
22.51
15.26
19.42
21.84
19.17
47.98
13.81
33.15
44.35
16.86
24.16
2.44
5.72
3.08
2.87
5.22
4.01
34.10
Qatar German Company for Medical Appliances 43.20
171.70
54.10
27.00
21.50
114.00
21.10
26.30
100.93
50.61
156.40
6,000,000
5,500,000
12,697,000
20,000,000
204.60
237.60
2,180.07
1,082.00
1.78
9.87
10.88
2.08
19.16
4.38
15.78
26.01
34.17
11.04
79.35
132.06
1.00
3.91
2.16
0.41
50.00
57.00
84.00
42.00
24.00
22.60
70.18
13.10
152.62
87.92
2,904,000
5,000,000
14,520,000
2,000,000
12,724,000
178.02
485.00
1,379.40
212.20
573.85
3.64
7.24
6.11
1.03
0.55
16.84
13.40
15.55
103.01
82.00
50.10
58.48
53.16
15.22
11.58
1.22
1.66
1.79
6.97
3.89
43.60
40.00
53.90
125.00
45.00
85.50
155.40
11.40
16.60
32.50
30.60
95.00
29.00
22.70
108.60
12.00
162.65
23.08
76.14
31.58
55.17
276.65
43.09
-5.00
5,628,820
1,554,300
100,000,000
20,000,000
25,000,000
75,000,000
100,000,000
24,300,000
245.42
62.17
5,390.00
2,500.00
1,125.00
6,412.50
15,540.00
277.02
-0.04
2.42
2.72
6.37
1.81
1.08
9.56
0.80
nm
16.53
19.82
19.62
24.86
79.17
16.26
14.25
10.48
22.83
16.85
71.30
13.47
15.35
23.38
10.72
4.16
1.75
3.20
1.75
3.34
5.57
6.65
1.06
67.70
50.10
95.80
31.40
na
na
na
na
na
na
na
na
500,000,000
30,000,000
4,000,000
50,000,000
33,850.00
1,503.00
383.20
1,570.00
98,480.25
na
na
na
na
na
na
na
na
na
na
na
na
na
na
na
na
Industry
Insurance
61.30
Qatar General Insurance & Reinsurance Company 97.00
95.00
106.10
45.10
Services
Qatar Navigation
Qatar Telecom
New listings
Industries Qatar
Qatar Fuel Company
Total market capitalisation
na: not available nm: not meaningful
Source: MEED Exchange rate: $1=QR 3.64
7
Qatar IG Banking pages 8-14 9/9/03 9:35 am Page 8
BANKING
Qatar National Bank
Profit and loss (QR ‘000)
Qatar National Bank
■ Market capitalisation on 31 August 2003: QR 12,147 million ($3,337 million)
■ Industrial sector: banking
■ Address: PO Box 1000, Doha
■ Tel: (974) 4407407
■ Fax: (974) 4415020
■ E-mail: [email protected]
■ Website: www.qnb.com.qa
■ Board of directors:
Chairman
HE Yousef Hussain Kamal
Vice-chairman and chairman HE Sheikh Hamad Bin Faisal al-Thani
of the executive committee
Member
Sheikh Ahmed Bin Mohammed Bin
Jabor al-Thani
Member
Mohamad Marzouq al-Shamlan
Member
Ali Hussain Ali al-Sada
Member
Rashid Misfer al-Hajiri
Member
Dr Ghanem Mohammed al-Hammadi
Member
Bader Abdullah al-Darwish Fakhroo
Member
Fahed Mohammed Fahed Buzwair
Member
Hitmi Ali Khalifa al-Hitmi
■ Chief executive officer: Saeed Bin Abdulla al-Misnad
■ Paid-in capital: QR 1,038.2 million ($285.2 million)
■ Number of issued QR 10 shares: 103,820,772
■ Share price on 31 August 2003: QR 117
■ Auditors: Andersen, PricewaterhouseCoopers
■ Overseas branches: UK: One Mount Street, London W1K 3HH, UK.
Tel: (44) 207 647 2600. Fax: (44) 207 647 2647.
France: 58 Avenue d’Iena, 75116 Paris, France. Tel: (33) 1 53 23 00 77.
Fax: (33) 1 53 23 00 70
Background
Qatar National Bank (QNB) is the oldest and largest bank in Qatar. It was
established as a joint stock company in 1964. The government of Qatar holds
a 50 per cent stake in the bank and the remaining 50 per cent is held by
members of the Qatari public. QNB has by far the largest distribution network in Qatar, with 33 branches, including the country’s first fully-automated
e-branch. A further branch is due to open later in 2003. The bank has a total
of 64 automated teller machines (ATMs), the largest network in the country.
■ Retail banking The retail banking group is building on its existing product
range, using electronic delivery platforms to keep up with customer needs. In
1999, the bank launched Al-Watani Phone, an interactive voice response system that can be accessed from any touch-tone telephone and Al-Watani.Com,
a PC-based intranet system. Al-Watani Direct, a customer Call Centre, was
established in 1999. Coverage of the Call Centre expanded in 2000 to
24-hours per day, the only 24-hour manned Call Centre in Qatar. In 2000, the
most important new delivery service introduced was the Al-Watani point of
sale (POS), which accepts both major internationally-recognised and locallyissued credit cards. In 2000, QNB launched the Al-Watani E card, a
MasterCard offering the same facilities as a standard credit card that can be
used over the web. It complements the Al-Watani MasterCard QNB launched
in 1998, the Al-Watani Visa card and the Al-Watani Platinum MasterCard
launched in 2000, the only Platinum MasterCard offered by a bank in Qatar.
QNB became in 2001 the first bank in Qatar to issue a co-branded credit
card, in partnership with MasterCard and The Ritz-Carlton Doha. In the year,
ATM services were upgraded to include additional features such as utility bill
and credit card payments. Instant cheque book printing and commercial
depository facilities have been added to 24-hour services.
■ Corporate banking QNB is the dominant player in corporate banking
activities in Qatar. It has developed a core expertise in project finance and
syndicated lending. The bank was co-lead arranger for the Qatar Fertiliser
Company (Qafco) 4, Ras Abu Fontas B power station and Ras Laffan
Independent Water & Power Project (IWPP) loans in 2001. Its involvement in
similar loans is continuing in 2003. In corporate finance, QNB participated in
the initial public offering (IPO) of United Development Company and the
establishment of Qatar’s first global depositary receipt (GDR) programme
when the shares of Qatar Telecom (Q-Tel) were admitted on the London
Stock Exchange. In April 2001, the bank arranged the IPO for the Qatari
German Company for Medical Services. In 2002, QNB managed the IPO for
Qatar Fuel Company and it is anticipating further IPOs as privatisation accelerates in Qatar. QNB has the ability to manage dividend payments and other
actions through its investment unit. In a further sign of developing competencies, QNB was lead manager of the Eur 500 million ($137 million) Iranian
Eurobond in July 2002.
■ Investments department and private banking QNB is the leading broker
among the eight licensed to operate on the Doha Securities Market (DSM).
QNB’s investments department launched at the start of 2002 an international
equities service based on an investment lounge in the bank’s office in the
QNH building on the corniche. QNB is aiming to set up tailored investment
funds in collaboration with a foreign firm. These initiatives have augmented
QNB’s private banking capabilities.
8
Interest income
1999
2000
2001
2002 % change
1,583,030 1,964,280 1,771,338 1,462,424
-17.44
Interest expense
976,878 1,336,271 1,080,845
623,253
-42.34
Net interest income
606,152
628,009
690,493
839,171
21.53
Other income
93,558
116,847
142,184
146,979
3.37
Operating income
699,710
744,856
832,677
986,150
18.43
General and administrative expenses
191,904
203,380
228,097
256,014
12.24
16,033
16,021
19,128
23,659
23.69
Depreciation
Provisions for impairment of loans and advances
0
31,651
63,712
106,255
66.77
31,027
0
0
0
0.00
General provision for loan portfolio
5,500
0
0
0
0.00
Provision for diminution in value of investments
4,518
162
-5,552
18
-100.32
0
2,607
0
20,000
nm
452,101
491,035
527,292
580,204
10.03
300,709
502,111
741,675
890,958
20.13
Due from banks and other financial institutions 3,433,473 6,434,297 3,794,143 4,840,842
27.59
Specific provision for loan losses
Other provisions
Net profit for the year
Balance sheet (QR ‘000)
Assets
Cash and deposits with Qatar Central Bank
Treasury bonds
Investments
Loans and advances
Other assets
Fixed assets
3,282,330
0
0
0
0.00
254,138 3,642,139 4,664,821 5,111,241
9.57
14,495,993 13,690,581 18,949,33619,953,109
5.30
308,113
268,359
154,867
173,343
11.93
77,241
83,956
85,893
86,432
0.63
22,356,162 24,621,443 28,390,735 31,055,925
9.39
Due to banks and other financial institutions 5,184,862 1,648,969 1,968,710 2,020,887
2.65
Total assets
Liabilities and shareholders’ equity
Customer deposits
Other liabilities
12,778,045 18,169,107 21,389,883 23,600,190
42.87
Total liabilities
18,293,419 20,286,728 23,676,308 26,075,012
10.13
Share capital
865,173 1,038,207 1,038,208 1,038,208
0.00
General reserve
Fair value reserve
468,652
317,715
10.33
453,935
Statutory reserve
330,512
865,173 1,038,207 1,038,208 1,038,208
0.00
1,450,600 1,770,036 1,770,034 1,770,034
0.00
0
0
215,793
321,178
48.84
Dividend
216,292
363,373
415,283
467,193
12.50
Retained earnings
881,797
124,892
236,901
346,092
46.09
Shareholders’ equity (before proposed dividends) 4,062,743 4,334,715 4,714,427 4,980,913
5.65
Shareholders’ equity and total liabilities
9.39
22,356,162 24,621,443 28,390,735 31,055,925
Performance ratios (%)
1999
2000
2001
2002 %change
Return on end-year assets
2.02
1.99
1.86
1.87
-6.87
Return on end-year equity
11.13
11.33
11.18
11.65
-1.27
Loans/assets
64.84
55.60
66.74
64.25
20.04
Deposits/assets
57.16
73.79
75.34
75.99
2.10
Loans/deposits
113.44
75.35
88.59
84.55
17.57
1999
200
2001
2002 31-Aug-03
Investment indicators
Year-end share price (QR)*
65.3
59.3
59.0
82.8
Year-end share price diluted (QR)
54.0
45.0
59.0
82.8
Number of issued shares (‘000)
86,517
103,821
103,821
103,821
103,821
Market capitalisation (QR million)
5,650
4,672
6,125
8,596
12,147
4.4
4.7
5.1
12.5
9.5
11.6
EPS diluted (QR)
PE diluted
* not diluted nm: not meaningful Sources: Qatar National Bank; MEED Exchange rate: $1=QR 3.64
117.0
Qatar National Bank
BANKING
QNB is committed to corporate social responsibility programmes that it
believes lead to the enhancement of the welfare of the local community. The
social responsibility committee contributes to the activities of several institutions and charitable organisations.
QNB was named best bank in Qatar by E uromoney for the 7th year, by
Global Finance for the 4th year and The Banker for the 3rd year. QNB has the
best rating and widest coverage amongst Qatari banks, reflecting its dominant position, its track record in terms of profitability, its strong capitalisation and high asset quality. US ratings agency MoodyÕ
s Investors Service has
given QNB a rating of A3 for long-term bank deposits, Prime-2 for short-term
deposits and D+ for bank financial strength. Capital Intelligence (CI) has
given QNB a long-term foreign currency deposit rating of A-, and its shortterm rating of A2. Domestic Strength and Support rating as assigned by CI
are A- and 1 respectively, the highest for Qatari banks. Fitch has set QNBÕ
s
long-term rating at A-, and assigned an individual rating of B/C and a
Support rating of 2. In the world banking rankings for 2002 published by The
Banker in July 2003, QNB was ranked 236th, based on tier 1 capital.
Additionally, QNB ranks 50th in the world in terms of equity to assets ratio.
Performance
QNB has recorded increased profits each year since 1993. In 2002, net profits
rose by 10 per cent to a record level of QR 580 million ($159 million). Total
assets at the end of 2002 were QR 31,056 million ($7,797 million), 9 per cent
more than 12 months earlier. A cash dividend of QR 467.2 million ($128 million) was approved. This was equivalent to
45 per cent of paid-in capital.
Outlook
QNBÕ
s performance continues to justify its position as the leading business
in Qatar and the leading stock quoted on the Doha Securities Market (DSM).
The price of the bankÕ
s shares rose by almost 30 per cent in the first half of
2003, reflecting the general buoyancy in the market. Prospects are excellent
in view of QNBÕ
s strong market position, excellent systems, strong customer
base and experienced management. It is well-positioned to continue to benefit from and serve the fastest-growing economy in the Arab world. The bank
is set to continue to prosper in the years ahead.
Net profit (QR Ô000)
550,000
500,000
450,000
400,000
350,000
300,000
1999
2000
2001
2002
2000
2001
2002
Total assets (QR Ô000)
28,000,000
26,000,000
24,000,000
22,000,000
20,000,000
18,000,000
16,000,000
1999
Ad
Q AT A R : A N I N V E S T O R ÕS G U I D E 2 0 0 3
9
BANKING
■ Market capitalisation on 31 August 2003: QR 1,444 million ($397 million)
■ Address: Salwa Road, PO Box 2309, Doha
■ Tel: (974) 4326611
■ Fax: (974) 4444652
Chairman
Saleh bin Mubarak al-Khulaifi
Vice-chairman
Ahmed al-Mana
Member
Sheikh Nasser bin Ali bin Saud al-Thani
Member
Ahmed Abdulrahman Nasser Fakhro
Member
Sherida Saad Jibran al-Kaabi
Member
Mohamed Ajjaj al-Kubaisi
Member
Sheikh Abdul Aziz bin Jassim bin Hamad al-Thani
■ General manager: Qasim M Qasim
■ Paid-in capital: QR 182.8 million ($50.2 million)
Background
Al-Ahli Bank of Qatar was incorporated by amiri decree in 1983 and began
operating as a commercial bank in August 1984. It offers a range of products
and services ranging from retail banking to corporate finance. It has nine
branches and a brokerage office at the Doha Securities Market (DSM). It offers
Visa and MasterCard services.
Performance
Al-Ahli Bank of Qatar has undergone a complete financial overhaul in the past
two years. Major problems emerged at the bank in 2000. In October that year,
Qasim Qasim was appointed general manager with a mandate to overhaul the
bank in the light of concern about the quality of its loan portfolio. This was followed by major management change and a thorough review of the non-performing loan portfolio. The financial statement for 2000 included a provision
for losses on loans and advances of QR 133.7 million ($37 million). This was in
excess of six times more than provisions in 1999. A small provision for a fall in
the value of investment securities was also included. The conclusion was that
the bank had consistently understated the scale of non-performing loans and
interest in suspense in previous financial statements.
The profit and loss statement for 2000, including the provisions, reflected
other adverse developments. Net interest income was down by 36 per cent on
the year. Other income fell by more than a quarter. The bank reported a net
loss of QR 102 million ($28 million). The deficit was absorbed by reserves and
this produced a 26 per cent reduction in shareholders’ equity to QR 184 million ($51 million). The fall in equity affects future activities since the central
bank restricts lending to a single client as a proportion of capital resources.
There were some large changes in Al-Ahli’s balance sheet in 2000, with shortterm assets rising strongly. The loan portfolio fell by 8.5 per cent and total
assets dropped by almost 2 per cent to QR 2,623 million ($64 million).
Sentiment was helped by the central bank’s decision to sign a QR 100 million
($27.5 million) agreement at the start of 2001 to guarantee any potential shortfall in the provision for bad losses at the bank. In June 2002, the central bank
directed that Al-Ahli should take one of two options. One entailed allowing
National Bank of Kuwait (NBK), the leading commercial bank of Kuwait, to take
a strategic stake in the bank. The second, which was chosen by the shareholders, involved the central bank providing financial support equivalent to the
QR 100 million bad loan provision shortfall. This financing, which is to cost
3 per cent a year paid out of profits, is only repayable from net earnings. The
bank also has the right to retain 10 per cent of profit for reserves. The financing
has priority over common stock but not over depositors’ claims. As part of the
deal, Al-Ahli shareholders agreed to give up the right to elect a board of directors. On 11 June, the central bank announced a new seven-person board comprising four of the previous eight directors including chairman Saleh bin
Mubarak al-Khulaifi and vice-chairman Ahmed al-Mana.
A net profit of QR 64.2 million ($17.6 million) was recorded in 2002. The loan
portfolio is now appropriately provided against and there will be no need to make
exceptional charges in the future. In the first three months of 2003 the bank recorded net profits of QR 23 million ($6.3 million) compared with QR 11 million
($3 million) in the same period of 2002. The bank has repaid QR 30 million
($8 million) of the subordinated loan from the Central Bank of Qatar.
Total liabilities and shareholders’ equity (QR ‘000)
3,000,000
2,800,000
2,600,000
2,400,000
2,200,000
2,000,000
1999
10
2000
2001
2002
1999
Interest income
202,743
Interest expense
136,059
Net interest income
66,684
Fees and commission income
0
Foreign currency income
0
Dividend income
0
Recovery of provision for loan losses
0
Other operating income
0
Other income
42,410
Gross operating income
109,094
Staff costs
0
Other operating expenses
0
18,728
Provision for decline in investment securities
0
Bad debts written off
0
Provision for specific loan losses
20,597
Depreciation
2,946
General provision for loan losses
3,150
Other provisions
0
10,813
Operating expenses
56,234
Income before extraordinary item
52,860
Profit from sale of investments
0
52,860
Appropriations
Retained earnings brought forward
6,042
Profit available for appropriation
58,902
Shortfall in provision for loan losses
0
Qatar Central Bank support
0
Effect of adopting IAS 39 from 1 January 2001
0
Transfer to fair value reserve
0
Transfer to statutory reserve
10,572
Transfer to Qatar Central Bank support
0
Transfer to general reserve
0
Proposed dividend
0
Bonus share issue
42,188
Directors’ fees
1,350
Retained earnings carried forward
4,792
Assets
Cash and deposits with central bank
64,116
Due from banks
30,584
Placements with foreign and local banks 473,941
Loans and advances, net
1,327,755
Government bills
679,267
Investments
22,021
Originated debt securities
0
Other assets, net
46,249
Fixed assets, net
23,306
Total assets
2,667,239
Liabilities
Due to Qatar Central Bank
0
Due to banks
214,527
Customer deposits
2,128,467
Deposit margin
3,635
Other liabilities
34,869
Total liabilities
2,381,498
Share capital
140,625
Bonus issue
42,188
Statutory reserve
78,435
General reserve
19,701
Proposed cash dividend
0
Directors’ remuneration
0
Fair value reserve
0
Retained earnings
4,792
Shareholders’ equity
285,741
Total liabilities and shareholders’ equity 2,667,239
Contingent liabilities
905,769
1.98
18.50
1998
1999
Share price (QR)
549.00
45.10
1,113 14,063
Market capitalisation (QR ‘000) 610,763 634,219
EPS (QR)
53.46
3.76
PE
10.27
12.00
BVS (QR)
210.54
20.32
PBV
2.61
2.22
Cash DPS (QR)
15.00
0.00
YPS (%)
2.73
0.00
2000
193,943
151,165
42,778
20,678
2,933
1,388
2,259
3,896
0
73,932
20,615
12,331
0
1,451
1,244
133,675
3,085
3,342
0
0
175,743
-101,811
0
-101,811
4,792
-97,019
0
0
0
0
-77,318
0
-19,701
0
0
0
0
2001
2002 % change
142,095 107,121
-24.61
111,247 53,639
-51.78
30,848 53,482
73.37
15,182 11,975
-21.12
2,507
3,443
37.34
4,819
2,477
-48.60
38,328 41,261
7.65
2,608 19,346
641.79
0
0
0.00
94,292 131,984
39.97
21,844 23,463
7.41
12,437 13,666
9.88
0
0
0.00
0
2,300
nm
1,115
329
-70.49
48,782 24,367
-50.05
3,686
3,869
4.96
2,727
0
-100.00
3,701
0
-100.00
0
0
0.00
94,292 67,814
-28.08
0
0
0.00
0
0
0.00
0 64,170
nm
0
0
0 64,170
0 100,000
0 100,000
5,787
0
-5,787
0
0 12,834
0 30,000
0
0
0 18,281
0
0
0
750
0
2,305
0.00
nm
nm
nm
-100.00
-100.00
nm
nm
0.00
nm
0.00
nm
nm
82,896
63,336 78,991
38,070
19,949 17,015
719,175 354,733 295,727
1,215,606 1,062,524 857,275
0
0
0
518,381 122,109 528,241
0 446,710 332,765
23,862
22,057 18,921
24,528
23,969 26,632
2,622,518 2,115,387 2,155,567
24.72
-14.71
-16.63
-19.32
0.00
332.60
-25.51
-14.22
11.11
1.90
0
108,506
2,265,452
6,839
57,791
2,438,588
182,813
0
1,117
0
0
0
0
0
183,930
2,622,518
962,776
-3.88
-55.35
2000
25.00
18,281
457,031
-5.57
nm
10.06
2.48
0.00
0.00
0
77,588
1,783,956
5,161
42,384
1,909,089
182,813
0
1,117
0
0
0
22,368
0
206,298
2,115,387
1,055,935
30,000
262,702
1,568,828
2,940
38,622
1,903,092
182,813
0
13,951
0
18,281
750
34,375
2,305
252,475
2,155,567
1,233,191
nm
238.59
-12.06
-43.03
-8.88
-0.31
0.00
0.00
1,148.97
0.00
nm
nm
53.68
nm
22.38
1.90
16.79
0
2.98
nm
0
25.42
nm
2001
2002 31-Aug-03
27.50
36.00
79.00
18,281 18,281
18,281
502,734 658,125 1,444,219
0.00
3.51
0.00
10.26
22.51
11.28
13.81
2.44
2.61
5.72
0.00
1.00
0.00
2.78
1.27
nm: not meaningful Sources: Al-Ahli Bank of Qatar; MEED Exchange rate: $1=QR 3.64
BANKING
Commercialbank
■ Address: Grand Hamad Street, PO Box 3232, Doha
■ Tel: (974) 4490000
■ Fax: (974) 4438182
Chairman
HE Abdullah bin Khalifa al-Attiyah
Deputy chairman
Sheikh Abdullah bin Ali bin Jabor al-Thani
Managing director Hussain Ibrahim al-Fardan
Member
Sheikh Nasser bin Faleh al-Thani
Member
Jassem Mohammed Jabor al-Mussallam
Member
Abdulla Mohammad Ibrahim al-Mannai
Member
Sheikh Jabor bin Ali bin Jabor al-Thani
Member
Khalifa Abdullah al-Sobai
Member
Omar Hussain al-Fardan
■ General manager: Andrew Stevens
■ Share price on 31 August 2003: QR 102.10
■ Auditors: KPMG Peat Marwick; PricewaterhouseCoopers
Background
Commercialbank, previously known as Commercial Bank of Qatar, was established
in 1975 as Qatar’s first private commercial bank. Commercialbank is widely regarded as the market leader in retail banking and is the largest issuer of credit cards in
Qatar. It has the exclusive franchise rights for Diners Club International in Qatar,
Egypt and Bahrain, as well as a number of other Middle East countries. The full
range of banking services, including corporate, investment banking and treasury,
as well as retail banking, is available and the bank has become increasingly active
in project and structured finance in Qatar and the GCC in recent years.
Commercialbank has a large network of branches in the major industrial cities
throughout Qatar. It was the first to introduce internet banking services in Qatar
and more than 30 per cent of internet users in the country now use its online
banking services.
The domestic banking division recorded a 23 per cent rise in lending in 2002. A
new leasing division was established to provide finance, operating and Islamic
lease structures and provided product diversification to meet the needs of local
companies with growing demand for capital inputs. The newly-formed international banking division sponsored and participated in major international finance and
investment projects. Commercialbank was active in all major Qatari financings in
the year. As a result, its syndicted loans portfolio grew by 79 per cent.
Correspondent banking relations were strengthened and an agreement was signed
with ICICI Bank of India for non-resident Indian services. The international banking
division arranged the refinancing of Commercialbank’s $120 million term loan.
The treasury division had a successful year in 2002. Two new products were
launched: long-term three-year fixed customer deposits and facilities for hedging
interest rate risk. In April 2002, Commercialbank concluded a nine-year interest
rate swap deal for a notional amount of $50 million with a local company.
The investment services division benefited from the positive trend in the Doha
Securities Market in 2002. Fund services launched a US property fund in 2002. Its
income rose by 30 per cent in the year on the back of strong sales of
Commercialbank’s range of Tejari Guaranteed and Man funds.
Other developments in the year included the establishment of online cash registers for the Ritz Carlton Hotel’s point of sale (POS) system. This was the first
online cash deposit machine in Qatar. In October 2002, a new system was introduced to provide remote POS download capabilities for the bank’s customers.
Other electronic innovations in the year included the introduction of the Paykey
transaction reconciliation service and CorpKey.
A major refurbishment programme was launched in conjunction with the
rebranding initiative across the branch network. A new branch was opened at Al
Jasra. bankdirect Pavilions, a new concept in bringing customer service direct to
the public outside banking hours, was established in City Centre and The Mall. A
number of automated teller machines (ATMs) were commissioned. Future plans
include the construction of a new headquarters building on the Doha corniche.
Work on the scheme was getting under way in the summer of 2003.
Performance
Commercialbank has been consistently profitable since it was established in 1975. In
2001, net profits rose to a record level of QR 101 million ($28 million), an increase of
79.8 per cent on the year. This profit was pegged back by the need to set aside additional provisions of QR 79.8 million ($22 million) for non-performing or poor quality debt. Commercialbank witnessed good growth in nearly every aspect of its business in 2001. The balance sheet expanded by 2.82 per cent to QR 5,208 million
($1,431 million) at the end of 2001 and shareholders’ equity advanced to
QR 662 million ($182 million).
The strong performance continued in 2002. The bank reported a 57 per cent rise
in net profit on an 18 per cent increase in total assets. Shareholders’ equity was
lifted by 18 per cent to a record level. The bank declared a 25 per cent cash dividend and a one-for-four bonus share issue for the year. With the economy booming and under ambitious management, Commercialbank is set to prosper.
Commercialbank
1999
Interest income
330,340
Interest expense
221,840
Net interest income
108,500
Other income
94,114
Operating income
202,614
Staff costs
na
General and administrative costs
na
Depreciation
na
Operating expenses
82,114
Provisions for specific loan losses
20,961
Charges for negative fair value
0
available for sale investments
Provisions for diminution in
1,504
value of investments
Provision for diminution in value of
0
properties acquired against debt settlement
Impairment losses on available
0
for sale investments
Total expenses
104,579
Net income for the year
98,035
Appropriations
71,254
Appropriable profit
169,289
Proposed dividend
69,214
Bonus shares
0
1,702
Transfer
0
11,798
0
Transfer to reserve for charitable donations 1,000
Transfer to fair value reserve
0
Adjustment for exchange rate fluctuations
0
85,575
Assets
Cash and deposits with Qatar Central Bank 168,299
Due from banks
29,916
Placements with foreign and local banks 1,109,241
Due from banks and financial institutions
0
Loans and advances
2,283,855
Government bills
698,710
Investments
179,015
Other assets
100,242
Fixed assets
71,851
Total assets
4,641,129
Customer accounts
3,318,868
Due to banks
417,045
Medium-term facilities
218,400
Other liabilities
110,019
Total liabilities
4,064,332
Share capital
197,754
Legal reserve
197,754
General reserve
26,500
Fair value reserves
0
Proposed dividends
69,214
Proposed bonus shares
0
Retained earnings
85,575
576,797
2.11
17.00
Loans/assets
49.21
Deposits/assets
71.51
Loans/deposits
68.81
1999
Share price (QR)
52.9
19,775
Market capitalisation (QR ‘000)
1,046,118
Market capitalisation ($ ‘000)
287,395
EPS (QR)
4.96
PE
10.67
EPS adjusted to present number of shares (QR) 3.30
BVS (QR)
29.17
PBV
1.81
BVS adjusted to present number of shares (QR) 19.44
Cash DPS (QR)
3.50
Cash DPS adjusted to present number of shares (QR) 2.33
YPS (%)
6.62
2000
350,870
240,628
110,242
100,617
210,859
54,488
31,872
11,102
97,462
49,625
0
2001
328,573
169,936
158,637
130,849
289,486
57,770
33,961
11,721
103,452
79,845
0
7,525
0
0
0.00
0
1,000
0
-100.00
0
4,054
2,602
-35.82
154,612
56,247
188,351
101,135
202,091
158,777
7.29
57.00
85,575
141,822
39,551
0
1,160
0
0
0
1,406
0
0
99,705
117,964
219,099
49,439
39,551
0
9,934
0
0
0
8,249
58
111,868
111,868
270,645
59,236
59,326
2,584
0
31,755
0
2,525
0
0
115,219
-5.17
23.53
19.82
50.00
nm
-100.00
nm
0.00
nm
-100.00
-100.00
3.00
167,495
160,571
203,099
48,129
0
0
1,161,034
0
0
0 1,128,771 1,370,211
2,429,444 2,729,779 3,153,217
0
0
0
1,033,919 997,528 1,167,238
154,861 122,725
151,757
70,670
74,106
95,542
5,065,552 5,213,480 6,141,064
26.49
0.00
0.00
0.00
15.51
0.00
17.01
23.66
28.93
17.79
3,558,630 3,646,465 4,390,091
317,447 359,753
392,762
524,160 436,800
436,800
104,051
98,538
134,765
4,504,288 4,541,556 5,354,418
197,754 197,754
237,305
197,754 197,754
229,509
26,500
26,500
26,500
0
44,058
59,551
39,551
49,439
59,326
0
39,551
59,326
99,705 111,868
115,129
561,264 666,924
786,646
5,065,552 5,208,480 6,141,064
20.39
9.18
0.00
36.76
17.90
20.00
16.06
0.00
35.17
20.00
50.00
2.92
17.95
17.91
1.11
10.30
47.96
70.25
68.27
2000
44.0
19,775
870,117
239,043
2.84
15.49
1.90
28.38
1.55
18.92
2.00
1.33
4.55
2002 % change
315,208
-4.07
91,273
-46.29
223,935
41.16
136,933
4.65
360,868
24.66
62,618
8.39
44,094
29.84
11,762
0.35
118,474
14.52
75,263
-5.74
5,752
1.94
2.59
33.28
11.30
11.30
0.00
52.36
51.35
-1.94
70.01
71.49
2.11
74.86
71.83
-4.05
2001
2002 31-Aug-03
46.0
75.5
102.1
19,775
23,730
29,663
909,667 1,803,514 3,028,598
249,909
495,471 832,032
5.11
6.69
15.49
15.49
35.90
3.41
5.35
33.72
33.15
1.36
2.29
3.60
22.48
26.52
2.50
2.50
1.67
2.00
5.43
3.28
1.96
na: not available nm: not meaningful Sources: Commercialbank; MEED Exchange rate: $1=QR 3.64
11
BANKING
Doha Bank
1999
2000
2001
Doha Bank
Interest income
408,034
480,034
460,977
438,909
-4.79
Interest expense
268,898
329,526
236,237
138,287
-41.46
■ Address: Grand Hamad Avenue, PO Box 3818, Doha
■ Tel: (974) 4456600
■ Fax: (974) 4430405
■ Website: www.dohabank.com.qa
Chairman
Fahad bin Mohammed bin Jabor al-Thani
Vice-chairman
Ahmad Abdul Rahman Yousef Obeidan
Managing director
Abdul Rehman bin Mohammed bin Jabor al-Thani
Member
Abdullah bin Mohammed bin Jabor al-Thani
Member
Abdullah bin Nasser bin Abdulla al-Thani
Member
Jabor bin Sultan Tuwar al-Kuwari
Member
Hamad Mohammad Hamad Abdulla al-Mana’a
■ General manager: Salah Mohammed Jaidah
■ Paid-in capital: QR 239.9 million ($66 million)
■ Number of issued shares: 23,994,140
■ Auditors: PricewaterhouseCoopers, Ernst & Young
■ Overseas branches: US: 100 Wall Street, NY 10005, New York, US.
Tel: (212) 509 4030. Fax: (212) 509 6433.
Net interest income
139,136
150,508
224,740
300,622
33.76
36,161
34,985
30,521
41,881
37.22
Background
Doha Bank was incorporated by amiri decree as a shareholding company in
December 1978. It was established to meet a growing need for financial services
in the private and public sectors. It started operating in March 1979, becoming
Qatar’s third locally-incorporated bank.
Doha Bank’s main areas of operation are retail, electronic, international, private
and corporate and commercial. It has a network of domestic branches including
one in the main office on Grand Hamad Avenue in Doha. Doha Bank has installed
automated teller machines (ATMs) situated at its branches and other locations.
The bank became a member of MasterCard in 2001. In 1999, it became the first
bank in Qatar to launch the Visa Electron Card and to connect the bank’s ATMs
with the Visa international network. Doha Bank also issues American Express
cards. It was the first in Qatar to introduce the Visa Platinum Card and it became
a member of MasterCard in 2001. In addition to the recent launch of dial-up PC
banking, Doha Bank also introduced mobile phone banking, which uses WAP
technology. This allows account holders access to account information on GSM
phone screen.
The bank has two pay offices at Qatar Petroleum’s premises at Doha and
Mesaieed and two overseas branches, one in New York and one in Karachi. The
New York office, which was opened in 1983, focuses mainly on correspondent
banking. In Pakistan, operations are being restructured into a new bank in which it
will hold a stake. Doha Bank says it aims to develop business through its New
York branch. It has a network of of more than 300 correspondent banks.
Salah Jaidah, an experienced commercial banker, was appointed general manager at the start of July 2001, and he has now completed a re-engineering programme for the bank. The restructuring entailed the bank being organised along
three main reporting lines: risk and credit control; support services; and the business group, encompassing treasury. Doha Bank has revised its credit policy and
changed the credit flow to meet client needs. It is accelerating product development in the retail side of the business and is opening a new generation of smaller
modern branches in shopping malls. The bank is stepping up its project finance
activities to capitalise on the construction boom in Qatar. Looking ahead, the
bank plans to launch internet banking services. Doha Bank has also entered the
investment banking services sector, including arranging initial public offerings
(IPOs). Doha Bank has a licence to operate as a broker at the Doha Securities
Market (DSM). A trading lounge has been created. Doha Bank plans to increase
the range of international funds available to its customers.
Moody’s Investors Service has given the bank a long-term bank deposit rating of
Baa2, a financial strength rating of D and a short-term debt rating of Prime-2.
Performance
Doha Bank has recorded generally consistent increases in operating profits and
balance sheet growth over the past five years. However, net income has been
affected by special factors, notably the need to make heavy bad loan provisions
in 2000 and in 2001 following new Qatar Central Bank guidelines.
In 2001, the bank reported a sharp increase in net interest income to
QR 225 million ($62 million) due to the fall in world interest rates in the year. This
helped to lift net profits by 9 per cent to QR 70.7 million ($19 million), giving the
bank a return on end-year assets of just over 1 per cent and a return on end-year
equity of 10.4 per cent. The balance sheet grew by 18 per cent in the year to
QR 6,505 million ($1,790 million).
In 2002, net profit rose by 70 per cent to a record level and the balance sheet
expanded by 14 per cent. A 20 per cent cash dividend and a 30 per cent bonus
share issue was declared.
Outlook
The 2002 profit and balance sheet boom is no flash in the pan. It is set to continue for the indefinite future. The challenge is to manage growth efficiently.
12
Fees and commission income
Other income
Operating income
Provisions for loan losses
Provision for diminution in value
2002 % change
36,156
79,204
37,463
63,033
68.25
211,453
264,697
292,724
405,536
38.54
28,576
102,979
100,000
160,542
60.54
821
733
0
0
0.00
of long-term investments
85,252
95,809
116,333
123,619
6.26
114,649
199,521
216,333
284,161
31.35
Net profit for the year before income tax 96,804
Total expenses
Income tax (foreign branches)
Net profit
65,176
76,391
121,375
58.89
73
233
5,735
377
-93.43
96,731
64,943
70,656
120,998
71.25
Appropriations
Retained profit brought forward
0
0
0
0
0.00
Profit available for appropriation
96,731
64,943
70,656
120,998
71.25
19,346
12,989
14,131
24,200
71.25
1,307
3,561
2,595
2,263
-12.79
-100.00
Directors’ fees
Proposed dividend
Donations to charitable organisations
Bonus shares
Retained profits carried forward
1,750
1,750
1,750
0
36,914
46,143
51,680
36,914
-28.57
500
500
500
0
-100.00
36,914
0
0
55,371
nm
0
0
0
2,250
nm
Assets
Cash and deposits with central bank
214,423
250,710
271,873
327,427
20.43
Due from banks and placement
206,220
347,830
603,655 1,361,518
125.55
Loans and advances, net
2,719,190
2,810,363
3,305,330 3,217,228
-2.67
Government bills receivable
1,032,794
0
771,551
1,957,784
with foreign and local banks
Investments, net
0
0
0.00
2,164,686 2,348,478
8.49
Other assets, net
66,462
86,022
67,376
74,813
11.04
Fixed assets, net
53,725
58,918
92,316
84,377
56.69
5,064,365
5,511,627
6,505,236 7,413,841
18.03
3,814,996
4,546,480
5,490,343 6,277,547
651,936
280,309
Total assets
Customer deposits
Due to banks
Other liabilities
111,245
172,871
Total liabilities
4,578,177
4,999,660
14.34
198,948
171,850
-13.62
136,859
145,863
6.58
5,826,150 6,595,260
13.20
Share capital
147,656
184,570
184,570
184,570
0.00
Statutory reserve
114,121
127,110
141,241
165,441
17.13
General reserve
150,583
154,144
156,739
159,002
1.44
Proposed bonus issue
36,914
0
144,856
215,033
48.45
-28.57
36,914
46,143
51,680
36,914
Proposed bonus issue
0
0
0
55,371
nm
Retained earnings
0
0
0
2,250
nm
679,086
818,581
20.54
6,505,236 7,413,841
13.97
486,188
511,967
5,511,627
1.91
1.18
1.09
1.63
50.26
19.90
12.68
10.40
14.78
42.07
-14.59
Loans/assets
53.69
50.99
50.81
43.39
Deposits/assets
75.33
82.49
84.40
84.67
0.33
Loans/deposits
71.28
61.81
60.20
51.25
-14.87
1999
2000
2001
2002 31-Aug-03
Share price (QR)
52.5
41.0
47.8
83.0
127.4
14,766
18,457
18,457
18,457
23,994
775,194
756,737
882,245 1,531,931 3,056,848
Market capitalisation ($ ’000)
212,965
207,895
242,375
420,860
6.55
3.52
3.83
6.56
EPS (QR)
PE
8.01
11.65
12.49
12.66
32.93
27.74
36.79
44.35
BVS (QR)
839,794
33.28
21.34
28.30
34.12
34.12
PBV
1.59
1.48
1.30
1.87
3.46
Gross cash DPS (QR)
2.50
2.50
2.80
2.00
Gross cash DPS adjusted to present
1.54
1.92
2.15
1.54
4.76
6.10
5.86
2.41
number of shares (QR)
YPS (%)
nm: not meaningful Sources: Doha Bank; MEED Exchange rate: $1=QR 3.64
1.89
BANKING
Qatar Islamic Bank
■ Tel: (974) 4417663
■ Fax: (974) 4413919
Chairman and
Sheikh Khalid bin Ahmed al-Sowaidi
managing director
Vice-chairman
Saood bin Abdulla bin Mohammed bin Jabor al-Thani
Member
Abdullatif bin Abdulla al-Mahmoud
Member
Mohammed bin Issa al-Mohannadi
Member
Mohammed Abdullatif al-Mana
Member
Abdul Rahman Abdulla al-Abdul Ghani Naser
Member
Mansour al-Misleh
Member
Isa bin Rabia al-Kuwari
Member
Mubarak bin Sayed Naser al-Naimi
■ Sharia board
Chairman
Dr Yousef al-Qaradawi
Executive member
Sheikh Walid bin Hady
Member
Sheikh Abdul Qadir al-Ammari
Member
Dr Ali al-Mohamady
■ Acting general manager: Ahmed el-Sayyed
■ Paid-in capital: QR 250 million ($69 million)
■ Auditors: KPMG Peat Marwick, PricewaterhouseCoopers
Background
Qatar Islamic Bank (QIB) was incorporated in July 1982 as a shareholding company to provide banking services based on Islamic principles. According to the
bank’s mission statement, QIB aims to accommodate the diverse financial needs
of its clients by providing a comprehensive range of traditional and modern banking products in accordance with sharia principles, and to generate a satisfactory
rate of return for depositors and shareholders on a consistent basis.
QIB has a network of branches in Qatar. Plans call for the opening of a ladies’
branch. The bank has implemented a modernisation programme and introduced
IT and automated banking services with the implementation of Phoenix and
Mosaic systems software. It has launched the Visa Electron card and the Visa
Platinum card. In the investment sector, QIB has launched fund products available to its customers.
QIB sees its mission as encompassing socially-responsible work. This has
included financing projects for the Religious Endowments Ministry, backing the
Twin Towers scheme and supporting local commercial and residential projects.
QIB has financed and implemented the construction of Qatari embassy projects
overseas. The bank is extending its series of Bader funds. Bader-5 and Bader-6
Property Funds have been launched. Other innovations include the opening of a
ladies’ branch and the extension of child banking services.
Performance
QIB’s profits fluctuated throughout the 1990s. In 1999, income was boosted
by a payment of QR 20.2 million ($5.6 million) from the liquidation of BCCI.
This has previously been fully provided for. Earnings were adversely affected
in 1999 by a 15.4 per cent increase to QR 67.7 million ($18.6 million) in general and administrative expenses.
The profit and loss statement for 2000 showed that income from QIB’s financing
activities rose 6 per cent to QR 269 million ($74 million). Earnings were also lifted
by a sharp rise in other income. QIB booked no less than QR 41.3 million
($11.3 million) in recoveries from BCCI. As a result, total income rose by almost
14 per cent to QR 339 million ($93 million). This was offset by a rise in provisions
to QR 68.6 million ($18.9 million) from QR 28 million ($7.7 million) 12 months
earlier.
Net income in 2001 grew by 69 per cent to QR 67 million ($18.4 million), a
record level. All earning areas of the bank performed well. The balance sheet
expanded by 9 per cent to QR 4,415 million ($1,213 million). Customer deposits
rose 10 per cent in the year, below the average for the market in a good year. More
than 80 per cent of QIB’s financing comes from this source.
Net income rose by 50 per cent in 2002 to QR 101 million ($28 million). The balance sheet expanded by 14.6 per cent to QR 5,126 million ($1,408 million). The
cash dividend a share, however, was reduced to 10 per cent from 20 per cent.
Outlook
QIB is making solid progress as one of the Arab world’s leading and most successful sharia-compliant commercial banks. Balance sheet growth continues to be
substantial, reflecting the general buoyancy of the local market. The decision to
transfer half the bank’s distributable 2002 profit to reserves reflects a desire to
build up resources in good times. Among the questions being asked about the
bank is the continuing uncertainty about its executive management. Acting general manager Maher Mahmoud al-Duweik is now adviser to the board. Ahmed elSayyed, an experienced banker from Egypt, was appointed general manager in
May. The bank is nevertheless well-placed to grow profitably and this was reflected in the 90 per cent rise in its equity price in the first seven months of 2003.
Qatar Islamic Bank
1999
Income
Income from financing activities
252,924
Income from investment activities
29,718
Other income
15,398
Extraordinary income
0
Total income
298,040
67,689
Depreciation of fixed assets
6,635
Financing activities, investment
27,899
provisions and related expenses
Total expenses
102,223
Profit for the year including depositors’ share 195,817
Depositors’ share of profit
138,580
Profit for the year before profits from funds 57,237
Share from assets under management
416
Net profit for the year before taxation
56,821
Tax
0
Net profit for the year before effect of
56,821
change in accounting policy
Effect of change in accounting policy
0
Net profit before minority interest
56,821
Minority interest
1,756
General provision for banking activities
0
Net profit for the year available for appropriation 55,065
Appropriation based on application of IAS-10
280
Appropriable profit
55,345
Transfer to legal reserve
11,179
0
42,500
Directors’ fees
900
702
Retained earnings
64
Cash and balances with Qatar Central Bank
0
Due from banks and Islamic financial institutions 0
Due from banks
0
Cash and deposits with banks
294,486
Deposits with banks and
141,596
Islamic financial institutions
Due from financing activities, net
3,133,095
Investment properties
0
Investments
285,012
Fixed assets, net
45,101
Other assets, net
84,005
Total assets
3,983,295
Customer deposits
3,284,822
Due to banks
8,075
Other liabilities
344,127
Total liabilities
3,637,024
Minority interest
7,629
Share capital
250,000
Legal reserve
42,604
General reserve
2,702
Proposed dividend
42,500
Proposed directors’ remuneration
0
Retained earnings
896
338,702
1.38
16.26
Loans/assets
0.00
Deposits/assets
82.46
Loans/deposits
0.00
1999
Share price (QR)
26.00
25,000
650,000
Market capitalisation ($ ’000)
178,571
EPS (QR)
2.20
PE
11.80
BVS (QR)
13.55
PBV
1.92
Gross cash DPS (QR)
1.70
Gross cash DPS based on existing shares (QR) 1.70
YPS (%)
6.54
2000
2001
268,890
12,857
57,144
0
338,891
70,367
12,265
68,640
267,361
15,344
37,110
0
319,815
74,650
13,304
65,674
240,868
14,907
56,798
0
312,573
83,921
12,909
37,062
-9.91
-2.85
53.05
0.00
-2.26
12.42
-2.97
-34.60
151,272
187,619
146,740
40,879
310
40,569
0
40,569
153,628
166,187
96,959
69,228
0
69,228
0
69,228
133,892
178,681
74,657
104,024
0
104,024
0
104,024
-12.85
7.52
-23.00
50.26
0.00
50.26
0.00
50.26
0
40,569
1,688
0
38,881
0
69,228
2,113
0
67,115
0
104,024
3,156
0
100,868
0.00
50.26
49.36
0.00
50.29
64
38,945
7,900
0
30,000
1,000
751
-706
746
67,861
13,423
0
50,000
1,080
2,000
1,358
1,358
102,226
20,174
0
25,000
1,800
50,000
5,252
82.04
50.64
50.29
0.00
-50.00
66.67
2,400.00
286.75
160,687
0
28,820
0
182,364
194,033
0
72,650
0
307,580
182,167
342,366
0
0
0
-6.12
nm
-100.00
0.00
-100.00
3,422,995 3,528,391 4,250,800
81,762
86,283 48,923
74,115 130,864 149,687
57,045
61,111 50,613
51,275
29,250 101,917
4,059,063 4,410,162 5,126,473
20.47
-43.30
14.38
-17.18
248.43
16.24
3,315,111 3,649,031 4,185,548
11,165
6,566 21,460
388,767 372,954 485,139
3,715,043 4,028,551 4,692,147
9,317
9,793 12,720
250,000 250,000 250,000
50,504
63,927 84,101
3,453
5,453 55,453
30,000
50,000 25,000
0
1,358
5,252
746
1,358
5,252
334,703 371,818 421,606
4,059,063 4,410,162 5,126,473
14.70
226.84
30.08
16.47
29.89
0.00
31.56
916.93
-50.00
286.75
286.75
13.39
16.24
0.96
11.62
0.00
81.67
0.00
2000
25.50
25,000
637,500
175,137
1.56
16.40
13.39
1.90
1.20
1.20
4.71
2002 % change
1.52
1.97
29.29
18.05
23.92
32.54
0.00
0.00
0.00
82.74
81.65
-1.32
0.00
0.00
0.00
2001
2002 31-Aug-03
32.40
43.50
88.00
25,000 25,000
25,000
810,000 1,087,500 2,200,000
222,527 298,764
604,396
2.68
4.03
12.07
10.78
56.58
14.87
16.86
2.18
2.58
5.92
2.00
1.00
2.00
1.00
6.17
2.30
2.27
nm: not meaningful Sources: Qatar Islamic Bank; MEED Exchange rate: $1=QR 3.64
13
BANKING
■ Tel: (974) 4385632
■ Fax: (974) 4411981
Chairman
Sheikh Thani bin Abdullah bin Thani al-Thani
Vice-chairman
Dr Hussain Ali al-Abdullah
Managing director
Sheikh Khalid bin Thani al-Thani
Member
Sheikh Abdullah bin Thani al-Thani
Member
Sheikh Thani bin Khalifa al-Thani
Member
Dr Yousef al-Nema
Member
Dr Nasser al-Abdulghani
■ Executive committee
Chairman
Member
Dr Hussain Ali al-Abdullah
Member
Dr Yousef A al-Nama
Member
Abdulbasit al-Shaibei
■ Audit committee
Chairman
Sheikh Thani bin Khalifa al-Thani
Member
Sheikh Abdullah bin Thani al-Thani
Member
Dr Nasser al-Abdulghani
■ Sharia board
Chairman
Dr Yousef al-Qaradawi
Executive member
Sheikh Walid bin Hady
Member
Sheikh Abdul Qadir al-Ammari
Member
Dr Ali al-Mohamady
■ General manager: Abdulbasit al-Shaibei
■ Paid-in capital: QR 125 million ($34.3 million)
■ Number of issued paid-up QR 10 shares: 12,500,000
■ Auditors (2001): Andersen, KPMG Peat Marwick
Background
Qatar International Islamic Bank (QIIB) was incorporated as a shareholding
company on 6 February 1990 and began operating on 1 January 1991. It is the
youngest Doha-registered bank and the smallest in terms of assets. The bank
was established by a group of private Qatari shareholders and operates in
accordance with sharia principles.
It offers a full range of services including savings, current and term investment accounts, and its financing activities include medium to large-scale
industrial projects, trade and manufacturing.
QIIB has eight branches. The bank moved into its new headquarters on
Grand Hamad Avenue in December 2001. It was created to provide competition for Qatar Islamic Bank (QIB), probably the most consistently successful
sharia-compliant financial institution in the Gulf. The aim is to win business
by offering a better service. QIIB increased the size of its sharia board in
2000. It was expanded by two with the appointment of Sheikh Walid bin
Hady, an executive sharia board member, and Dr Ali al-Mohamady, a board
member. The QIIB sharia board is now identical to the QIB board. The bank is
led by Abdulbasit al-Shaibei, a highly-experienced executive who was originally seconded to QIIB in January 1994 from the Qatar Central Bank. He is
now a permanent employee of the bank. The managing director is Sheikh
Khalid bin Thani al-Thani, also chief executive of Qatar Islamic Insurance
Company and chairman of the Qatar Real Estate Investment Company and of
Al-Ahli Hospital.
Performance
QIIB is a small but profitable bank. In 2001, it recorded a 23 per cent rise in
net income to QR 42 million ($11.5 million). The rise in profit reflected
encouraging results in all areas. The bank also managed to avoid setbacks
associated with investment in international equities. The bottom line was
helped by a decline in the amount paid to depositors as a return for their
investment in the bank. The increase in profits was also despite a large
increase in operating costs and in the amount set aside for provisions.
Financial results for 2002 were a reflection of the upward trend seen in the Qatari
economy. Net profit available for distribution was QR 50.6 million ($13.9 million).
Total assets rose by 21.1 per cent to QR 3,243 million ($891 million) and customer
deposits increased by 20.1 per cent to QR 444 million ($122 million). Investment
assets net of provisions rose by 24 per cent.
The efficiency standard of capital rose to 15.3 per cent at the end of 2002.
The average rate of return in the year was 1.6 per cent. Average returns on
equity were 22.7 per cent.
Outlook
QIIB is the bright new player in the Qatari banking market, a fact reflected in
its strong performance. Along with other Qatari banks, it recorded healthy
profit growth in 2002. The modernisation of its systems and management is
laying the foundations for further healthy growth in the years to come. The
competitive issue is the extent to which it seeks to attack the dominant market share held by QIB.
14
1999
Income from finance activities
102,621
Income from investment activities
8,804
Other income
6,247
Total income
117,672
Staff costs
15,066
na
Depreciation
na
9,172
Profit before provisions
93,434
Net provisions for doubtful debts
1,428
Provision for decline in investment properties
0
Provision for decline in value of shares
400
Profit for the year including depositors’ share 91,606
Depositors’ share of profit
63,427
Share of profit from funds under management
821
29,000
Appropriations
Profit brought forward
128,296
Appropriable profit
157,296
Transfer to the uncalled share portion
0
0
0
Dividend
7,500
770
Profit carried forward
149,026
Assets
Cash and balances with Qatar Central Bank 68,634
Due from banks
50,992
Receivables and finance activities
1,606,326
Real estate investment
0
Investments
80,395
Other assets
22,287
Fixed assets
11,374
Total assets
1,840,008
Deposit from an Islamic bank
0
Customer deposits
1,526,191
Due to banks
9,435
Other liabilities
155,356
Total liabilities
1,690,982
Share capital
80,000
Statutory reserve
23,344
General reserve
37,682
Proposed dividends
8,000
0
0
149,026
1.58
19.46
Loans/assets
0.00
Deposits/assets
82.94
Loans/deposits
0.00
1999
Share price (QR)
25.00
8,000
200,000
54,945
EPS (QR)
29.00
EPS adjusted to the present
2.90
PE
0.86
BVS (QR)
18.63
BVS adjusted to the present
14.90
PBV
1.68
Gross DPS (QR)
0.94
Gross DPS adjusted to the
0.10
present number of shares
YPS (%)
3.75
2000
135,836
6,714
6,183
148,733
18,920
9,281
2,328
11,609
118,204
6,116
0
1,211
110,877
77,524
678
34,031
2001
146,240
7,890
6,900
161,030
21,551
12,655
5,396
18,051
121,428
15,889
0
1,019
104,520
63,030
245
41,735
2002 % change
148,758
1.72
9,209
16.72
9,910
43.62
167,877
4.25
24,408
13.26
14,735
16.44
7,789
44.35
22,524
24.78
120,945
-0.40
14,864
-6.45
3,500
nm
3,137
207.85
99,444
-4.86
48,807
-22.57
0
-100.00
50,637
21.33
149,026
183,057
0
0
0
8,000
854
175,057
175,057
216,792
0
0
0
9,000
854
206,938
206,938
257,575
0
0
0
15,000
980
241,595
18.21
18.81
0.00
0.00
0.00
66.67
14.75
16.75
75,664 90,460 123,859
42,015 82,814 253,976
1,840,796 2,382,163 2,683,414
6,017 29,425
30,784
81,438 51,375
88,365
37,765 19,646
21,849
14,294 44,037
40,671
2,097,989 2,699,920 3,242,918
36.92
206.68
12.65
4.62
72.00
11.21
-7.64
20.11
18,207 26,577
79,542
1,684,161 2,208,390 2,651,827
12,539 23,108
26,663
208,779 234,907 243,291
1,923,686 2,492,982 3,001,323
90,000 100,000 100,000
30,150 38,497
48,624
45,053 52,461
56,711
9,000 15,000
10,000
0
0
25,000
0
980
1,260
174,203 206,938 241,595
2,097,889 2,699,920 3,242,918
199.29
20.08
15.38
3.57
20.39
0.00
26.31
8.10
-33.33
nm
nm
16.75
20.11
1.62
19.54
0.00
80.28
0.00
2000
24.50
9,000
220,500
60,577
4.25
3.40
1.55
20.17
0.00
81.79
0.00
2001
34.00
10,000
340,000
93,407
4.64
4.17
1.56
1.01
20.96
3.92
0.00
0.00
81.77
-0.03
0.00
0.00
2002 31-Aug-03
61.50
97.00
10,000
12,500
615,000 1,212.500
168,956
333,104
5.06
5.06
5.76
19.36
17.42
7.33
20.69
20.69
12.15
24.16
24.16
20.92
1.41
0.89
0.10
1.64
0.90
0.10
2.55
1.50
0.10
4.69
3.63
2.65
2.44
0.93
nm: not meaningful na: not available Sources: Qatar International Islamic Bank; MEED Exchange rate: $1=QR 3.64
Qatar IG Industrial pages 15-18 9/9/03 9:36 am Page 15
INDUSTRIAL
Profit and loss (QR)
1999
Sales and operating income
45,665,278
Cost of sales and operating expenses 55,283,971
Gross operating profit
-9,618,693
Sales and distribution expenses
1,433,991
General, administrative and
20,439,835
financial expenses
Total expenses
21,873,826
Net operating loss
-31,492,519
Slow moving inventory provision
0
Other income
0
Compensation from the
28,611,449
government for subsidised flour
Other income
4,849,595
Total other income
33,461,044
Net profit before provision write-back 1,968,525
Write-back of deferred expenses 1,326,438
Fair value adjustments to previous years
0
Net profit
642,087
Appropriations
Retained profits brought forward at start of year na
Appropriable profit
na
Cash dividend
na
Directors’ emoluments
na
Retained profits at the end of the year
na
Balance sheet (QR)
Assets
Cash in hand and at banks
60,388
Accounts receivables
4,446,605
Other receivables
1,928,145
Qatar government current account 3,885,211
Inventory and letters of credit
10,430,534
Other debit accounts
0
Total current assets
20,750,883
Investments
8,236,610
Land
8,194,013
Fixed assets
324,910,828
Construction in progress
1,073,319
Deferred payments
6,632,193
Total non-current assets
349,046,963
Total assets
369,797,846
Due to banks
77,164,843
Accounts payable
1,893,802
Notes payable
0
Loans – instalments due
13,102,993
Other credit accounts
5,352,882
Short-term loans
17,350,505
Amount owed to the
0
government of Qatar
Total current liabilities
114,865,025
Long-term loans
50,250,000
Employees end of service provision 6,264,463
Total non-current liabilities
56,514,463
Total liabilities
171,379,488
Share capital
60,000,000
Capital reserve
0
Statutory reserve
61,276,974
General reserve
19,766,512
Proposed board of directors’ remuneration 0
Share premium
0
Retained earnings
57,372,872
198,416,358
Profit margin
-40.82
Return on capital
1.07
Return on equity
0.32
1999
Share price (QR)
28.00
6,000
168,000
46,154
EPS (QR)
0.11
PE
261.65
BVS (QR)
33.07
PBV
0.85
Gross DPS (QR)
0.70
YPS (%)
2.50
■ Market capitalisation on 31 August 2003: QR 205 million ($56 million)
■ Industrial sector: industry
■ Tel: (974) 4515000
■ Fax: (974) 4438137
Chairman and
Sheikh Nasser bin Mohammed bin Jabor al-Thani
managing director
Deputy chairman and
Sheikh Talal bin Mohammed bin Jabor al-Thani
managing director
■ General manager: Syed A Abbas
■ Auditors: Talal Abu Ghazaleh & Company
Background
Qatar Flour Mills Company (QFMC), established in 1969, began production in
1972, becoming the second flour producer in the Gulf. It is the only flour miller in
Qatar, supplying the local market at below-cost prices and being reimbursed by the
state. In 1996, the company moved to Doha from Mesaieed. Its present site has a
dock, facilities for unloading wheat and grain silos with capacity of 65,000 tonnes.
The flour plant’s grinding capacity is 600 tonnes a day, sufficient until 2025. In 1997,
production began at its Qatar Food Industries Company (Foodco) subsidiary. This
comprises factories for baby food, biscuits and pasta, an automatic bakery and a
packing unit. The investment has performed badly and production of baby food
was never initiated. QFMC’s profits slumped by almost 50 per cent in 1998 and to
barely break-even in 1999. In 2000, Syed Abbas was appointed general manager
with a remit to get QFMC back on track, but the company that year was hit by a
fair-value accounting adjustment due to the implementation of IAS 39. There was a
strong recovery in 2001 due to cost-cutting and a reduction in liabilities.
A centralised marketing and value-added products line was introduced to
improve the company’s image. The staff has been retrained and the training
division strengthened. To lay the foundations for sustainable and profitable
growth, general, administrative and financial expenses were trimmed.
Performance
Disappointing results in 1999 and 2000 precipitated a radical new approach to the
business. In 2002, the company recorded lower sales but higher profits due to a
policy of eliminating unprofitable product lines. Underpinning the results were
cuts in costs of sales, overheads and selling and distribution costs. The subsidy
received from the government, which is provided to keep the cost of its products
down, was cut by 14 per cent. Despite that, QFMC recorded a 28 per cent rise in
net income to QR 10.7 million ($3 million). The cash dividend for the year was lifted by 10 per cent to 11 per cent.
Plans include the establishment of an export sales unit. Bulk sales of barley
and food grain are to be increased. A new pasta line was launched in June.
QFMC now seems set to record regular profit and sales growth.
Net profit (QR ‘000)
1,200
900
600
300
0
1999
2000
2001
2002
Total assets (QR ‘000)
400,000
350,000
300,000
250,000
200,000
1999
2000
2001
2002
2000
2001
2002 % change
45,922,428 37,305,829 35,294,163
-5.39
49,584,290 46,051,647 42,539,537
-7.63
-3,661,862 -8,745,818 -7,245,374
-17.16
751,676
462,356
398,441
-13.82
16,483,352 13,730,988 10,156,777
-26.03
17,235,028 14,193,344 10,555,218
-20,896,890 -22,939,162 -17,800,592
0
0
0
0
0
0
23,411,930 27,860,340 23,951,221
-25.63
-22.40
0.00
0.00
-14.03
4,233,347 3,399,920 4,515,295
27,645,277 31,260,260 28,466,516
6,748,387
8,321,098 10,665,924
0
0
0
-6,556,665
0
0
191,722 8,321,098 10,665,924
32.81
-8.94
28.18
nm
0.00
28.18
57,372,872 51,364,594 53,285,692
57,564,594 59,685,692 63,951,616
6,000,000 6,000,000 6,600,000
200,000
400,000
500,000
51,364,594 53,285,692 56,851,616
3.74
7.15
10.00
25.00
6.69
9,643
3,911,013
0
0
8,679,519
1,819,675
14,419,850
8,132,610
8,194,013
307,228,546
3,739,628
0
327,294,797
341,714,647
37,094
3,804,599
0
2,724,016
12,057,366
1,446,753
20,069,828
8,657,820
8,194,013
292,185,652
3,277,388
0
312,314,873
332,384,701
167,880
7,036,473
0
175,237
13,626,185
1,442,685
22,448,460
8,657,820
8,194,013
277,099,099
3,277,388
0
297,228,320
319,676,780
352.58
84.95
0.00
-93.57
13.01
-0.28
11.85
0.00
0.00
-5.16
0.00
0.00
-4.83
-3.82
69,194,167 25,890,326 13,220,281
8,410,298 2,738,560 5,224,552
0 6,365,358 9,466,562
21,778,554 28,453,117 35,127,679
8,332,367 1,784,700 1,760,744
14,153,244 19,206,158 16,598,063
1,136,324
0
0
-48.94
90.78
48.72
23.46
-1.34
-13.58
0.00
123,004,954
22,000,000
4,301,613
26,301,613
149,306,567
60,000,000
15,000,000
61,276,974
4,766,512
0
0
53,285,692
194,329,178
84,438,219
45,478,333
1,738,971
47,217,304
131,655,523
60,000,000
15,000,000
61,276,974
4,766,512
400,000
6,000,000
53,285,692
200,729,178
-31.27
0.32
0.10
2000
28.00
6,000
168,000
46,154
0.03
876.27
32.39
0.86
1.00
3.57
-38.08
13.87
4.15
2001
24.50
6,000
147,000
40,385
1.39
17.67
33.45
0.73
1.00
4.08
81,397,881
31,500,000
1,783,797
33,283,797
114,681,678
60,000,000
15,000,000
61,276,974
4,766,512
500,000
6,600,000
56,851,616
204,995,102
-3.60
-30.74
2.58
-29.51
-12.89
0.00
0.00
0.00
0.00
25.00
0.00
6.69
2.13
-33.53
-11.95
17.78
28.18
5.20
25.51
2002 31-Aug-03
27.00
34.10
6,000
6,000
162,000
204,600
44,505
56,209
1.78
15.19
19.18
34.17
0.81
1.00
1.10
4.07
3.23
nm: not meaningful na: not available Sources: Qatar Flour Mills Company; MEED Exchange rate: $1=QR 3.64
15
INDUSTRIAL
Period to 31 Dec 2000
2001
2002
% change
72.08
Income
1,431,889
2,678,257
4,608,680
■ Tel: (974) 4662787
■ Fax: (974) 4654064
Chairman
Sheikh Dr Hamad bin Nasser al-Thani
Deputy chairman
Khalid Abdulla Saleh al-Mana
■ Auditors: KPMG Peat Marwick
Other income
0
0
24,000
nm
Total income
1,431,889
2,678,257
4,632,680
72.97
1,381,016
615,281
895,789
45.59
0
36,644
46,641
27.28
-100.00
Background
The Qatar German Company for Medical Appliances is a newly-formed company
set up to build, own and operate a manufacturing company making medical equipment for local, regional and international markets. Qatar Industrial Development
Bank (QIDB) with KPMG carried out a detailed evaluation of the feasibility of the
project. This was supplemented by a study by the Doha-based Gulf Organisation
for Industrial Consulting.
A key element of the project is the plan to produce as part of phase one of the
scheme safety syringes based on a technology development by Siekmann of
Germany. Phase one also calls for the production of intravenous catheters and
obturators. Longer-term objectives include the possibility of producing blood bag
systems, intravenous sets, tracheal tubes, scalp vein sets, stop cocks, cannulas
from tubing, dental needles and long syringes. Figures contained in the prospectus
for the firm forecast gross sales revenues rising to QR 46.5 million ($12.8 million)
and profits to QR 15.9 million ($4.4 million) in the fifth year of production.
The company was established by emiri decree number 39 on 15 October
2000 with total capital of QR 5.5 million ($1.5 million). The promoters, comprising 100 individuals and institutions, subscribed 45 per cent of the capital.
They included Siekmann which has taken a 6 per cent stake in the firm. Other
shareholders with more than 1 per cent of the capital are QIDB, Qatar
National Bank (QNB) and Qatar National Navigation & Transport Company.
The remainder of the shares were offered in an initial public offering (IPO)
arranged by QNB in 2001. The shares were listed on the Doha Securities
Market (DSM) in 2002.
Work on the factory was nearing completion in the summer of 2003.
Production is scheduled to start in November 2003. The designs for the factory, which is to be located in the Abu Hamour area of Doha, were done by The
Qatar Engineers Association.
Appropriable profit
Performance
Figures released for the year ending 31 December 2003 show that the firm
had net income of QR 3.7 million ($1 million) derived from investment
income. The price of the firm’s shares have been extremely buoyant. It closed
on 30 July at QR 34.90, more than 60 per cent up on the year so far.
Outlook
The prospects for the company seem sound in view of the rising demand for
healthcare products. The principal market will be the Hamad General
Hospital, the largest Qatari state hospital. Longer-term objectives are sales
to other GCC countries, elsewhere in the Middle East and the Far East. As
part of the deal with Siekmann, 50 per cent of the firm’s output will be sold
to Germany.
Revenue
Expenses
Depreciation
Finance cost
Total expenses
36,644
26,910
0
1,417,660
678,835
942,430
38.83
14,229
1,999,422
3,690,250
84.57
Appropriations
Cash dividend
0
12,806
1,812,286
14,051.85
14,229
2,012,228
5,502,536
173.45
1,423
199,942
369,025
84.57
0
0
0
0.00
12,806
1,812,286
5,133,511
183.26
Balance sheet (QR)
Assets
Fixed assets
0
180,206
2,228,692
1,136.75
Capital advances
0
7,420,842
17,398,584
134.46
Intangible assets
4,674,106
5,358,186
5,358,186
0.00
Non-current assets
4,674,106
12,959,234
24,985,462
92.80
Prepayments and other receivables
0
79,292
61,041
-23.02
Cash and bank balances
53,131,889
44,041,873
36,907,736
-16.20
Current assets
53,131,889
44,121,165
36,968,777
-16.21
Total assets
57,805,995
57,080,399
61,954,239
8.54
Payables and accruals
0
65,998
1,249,122
1,792.67
Due to a related party
2,791,766
750
1,216
62.13
2,791,766
66,748
1,250,338
1,773.22
Non-current liabilities
Share capital
Legal reserve
0
0
0
0.00
55,000,000
55,000,000
55,000,000
0.00
1,423
201,365
570,390
183.26
12,806
1,812,286
5,133,511
183.26
55,014,229
57,013,651
60,703,901
6.47
Total liabilities and shareholders’ equity
57,805,995
57,080,399
61,954,239
8.54
Profit margin
0.99
74.65
80.07
7.26
Return on capital
0.03
3.64
6.71
84.57
Retained earnings
Return on end-year shareholders’ equity
0.03
3.51
6.08
73.35
2000
2001
2002
31-Aug-03
43.20
Share price (QR)
na
na
21.50
5,500
5,500
5,500
5,500
na
na
118,250
237,600
na
na
32,486
65,275
2.59
0.36
0.67
EPS (QR)
PE
BVS (QR)
PBV
na
na
32.04
10.00
10.37
11.04
na
na
2.07
Gross DPS (QR)
0.00
0.00
0.00
YPS (%)
0.00
0.00
0.00
64.39
20.83
0.00
nm: not meaningful na: not available Sources: Qatar German Company for Medical Appliances; MEED
Current assets (QR ‘000)
55,000
65,000
50,000
60,000
45,000
55,000
40,000
50,000
35,000
16
2000
2001
2002
45,000
2000
2001
2002
INDUSTRIAL
■ Tel: (974) 4664800
■ Fax: (974) 4667846
Chairman and
Salem Butti al-Naimi
managing director
Deputy chairman
Khalil Radwani
Member
Mohammed Barghash al-Naimi
Member
Abdul Aziz al-Khulaifi
Member
Sulaiman al-Mana
Member
Hassan Hassan al-Mulla al-Jufairi
Member
Najib al-Sada
Member
Badr Ahmed Gaid al-Amadi
Member
Adul Latif al-Mohannadi
■ General manager: Mohammad Ali al-Sulaiti
Sales
Background
Qatar National Cement Company (QNCC) was incorporated as a shareholding company in July 1965. It is 43 per cent owned by the government. The
company’s main activities are the production and sale of cement. QNCC has
a workforce of 718 employees and operates two cement plants at Umm Bab,
in the west of Qatar, close to Dukhan, Qatar’s principal oil centre.
QNCC’s first 100,000-tonne-a-year (t/y) plant began operating in 1969 in
Umm Bab, selected due to nearby limestone and clay deposits. A second
100,000-t/y plant opened in 1974 and a third of the same capacity in 1976. In
February 1998, the construction of a second factory was completed at a cost
of QR 512 million ($141 million). This factory has nameplate capacity of 2,000
tonnes a day (t/d) and raised the total capacity of QNCC to 1 million t/y of
ordinary portland and sulphate-resisting cement produced in a 2:1 ratio. The
output is in bags and bulk on a 1:2 ratio. QNCC has also built a 100-t/d calcined lime plant; a hydrated lime plant and other facilities including a water
plant.
As part of an expansion plan, QNCC has built a 70,000-t/y pulverised fly ash
plant, commissioned in 2002, an oil well cement plant and a sand-washing
plant. In addition, QNCC has bought a slag cement plant from the government. Other activities included financing the second phase of the Dukhan
residential project in collaboration with the Qatar Real Estate Investment
Company (QREIC). All the homes have been leased out on a long-term
basis. QNCC took over a sand works from the Ministry of Municipal Affairs &
Agriculture in January 2003. Future plans call for a joint venture to be formed
with RMC of the UK for oil well cement.
QNCC is now addressing soaring demand for cement in Qatar due to a
project boom. Cement demand in 2001 was 1.2 million tonnes, all satisfied
by QNCC which has been operating beyond capacity. Demand in 2002 rose to
1.7 million tonnes. QNCC lifted production to meet soaring demand to
1.35 million tonnnes. The latest estimate is that Qatari cement demand will
rise to 2 million tonnes in 2003.
To satisfy soaring consumption, QNCC is pressing ahead with a
$125 million expansion which will see the construction of a new 1 million–t/y
plant at Umm Bab. Baisse Sam Bre Eri has been appointed as consultant for
the scheme.
Investments
Performance
QNCC is reporting excellent financial trends due to the need to operate the
new plant at and above capacity. Sales revenues rose by 21 per cent to
QR 243 million ($67 million) reflecting the sharp rise in production. Net profits for the year rose by 42 per cent to QR 111 million ($30 million), giving the
firm a sales profit margin of 43 per cent.
The price of QNCC shares has galloped ahead on expectations of rising
earnings and dividends from a business which has the bulk of the fastestgrowing cement market in the Middle East. It closed on 30 July at QR 166
($46), almost 46 per cent above the level at the end of 2002 and more than
100 per cent up since the end of 2001.
Outlook
QNCC is one of the biggest beneficiaries among local listed companies from
Qatar’s economic boom. Construction activity is expected to grow rapidly
over the next four years. Since QNCC is the only local producer of cement, it
is enjoying an unprecedented sales boom which is driving profits to record
levels. The immediate issue is managing demand, but longer-term factors are
emerging. The decision to press ahead with a major expansion in capacity is
a logical but bold step. The challenge will be to implement this scheme while
at the same time servicing customers racing ahead with major projects in
Qatar. QNCC is also likely to come under serious pressure for the first time
from imported cement. Nevertheless, the prospects for the firm are excellent
and the share price should continue to march in step with economic growth.
1999
2000
2001
2002 % change
Income
Cost of sales
165,827,957 171,869,134 207,102,096 242,753,303
82,293,416
15.70
25.82
Gross profit
83,534,541
81,543,936 102,597,458 104,712,821
Other income
24,725,134
24,741,486
Total operating income
20.50
90,325,198 104,504,638 138,040,482
33,049,482
36,785,408
33.58
108,259,675 106,285,422 135,646,940 141,498,229
27.63
Expenses
Selling and distribution
5,832,551
6,863,771
8,585,543
11,798,017
25.08
0
3,952,980
0
0
0.00
8,781,067
8,074,223
12,692,601
-8.05
86,687,604 118,987,174 117,007,611
37.26
Loss on sale of property,
plant and equipment
General and administrative expenses 7,040,449
Profit from operations
95,386,675
Financing charges
3,929,782
7,459,154
6,239,419
6,482,980
0
0
0
0
0.00
79,228,450 112,747,755 110,524,631
42.31
Property, plant and equipment 461,202,019 405,027,252 378,417,173 354,820,434
-6.57
Investment property
Amortisation of deferred charges
91,456,893
-16.35
Balance sheet (QR)
0
16,151,736
15,424,258
14,413,958
-4.50
21,942,628
25,953,244
0
0
0.00
0
0
0
0
0.00
31,342,127
60,267,199
54,757,158
48,763,034
-9.14
514,486,774 507,399,431 448,598,589 417,997,426
-11.59
Deferred charges
Finance lease receivable
Non-current assets
Finance lease receivable
2,376,873
4,397,330
5,510,042
5,994,126
Inventories
37,994,128
34,662,730
39,247,037
62,278,846
25.30
13.23
Accounts receivable
50,939,991
57,599,294
74,572,691
79,098,824
29.47
and prepayments
Investments available for sale
0 133,710,972 207,527,970
nm
Bank balances and cash
120,321,934 143,789,225 118,495,289 133,075,867
0
-17.59
Current assets
211,632,926 240,448,579 371,536,031 487,975,633
54.52
Total assets
726,119,700 747,848,010 820,134,620 905,973,059
9.67
Finance lease payable
7,782,541
10,025,517
9,639,632
10,384,754
-3.85
Accounts payable and accruals 18,219,020
19,875,073
23,433,476
53,687,936
17.90
2,239,224
1,819,935
974,026
3,774,857
-46.48
0
0
0
0
0.00
20,458,244
21,695,008
24,407,502
67,847,547
12.50
Finance lease contract
66,398,068
50,127,693
38,558,528
31,154,274
-23.08
End of service benefits
714,163
1,127,342
749,217
1,031,884
-33.54
67,112,231
51,255,035
39,307,745
32,186,158
-23.31
Share capital
81,259,000
81,259,000 101,573,750 101,573,750
25.00
Bank overdrafts
Proposed dividend
Bonus share
0
0.00
549,507,686 583,613,450 645,205,991 704,365,604
10.55
630,766,686 664,872,450 746,779,741 805,939,354
12.32
Total liabilities and
718,337,161 737,822,493 810,494,988 905,973,059
9.85
Reserves
0
0
0
shareholders’ equity
Profit margin
50.37
47.45
49.54
43.14
4.41
112.55
97.50
111.00
108.81
13.85
Return on end-year shareholders’ equity 14.50
11.92
15.10
13.71
26.70
Investment indicators (%)
1999
2000
2001
2002 31-Aug-03
Share price (QR)
66.90
64.50
77.00
114.00
8,126
8,126
10,157
10,157
12,697
543,623
524,121
782,118
1,157,898
2,180,697
149,347
143,989
214,868
318,104
598,908
11.25
9.75
11.10
10.88
PE
5.94
6.62
6.94
10.48
EPS adjusted to the number of
9.00
7.80
11.10
10.88
77.62
81.82
73.52
79.35
0.86
0.79
1.05
1.44
62.10
65.46
73.52
79.35
Gross DPS (QR)
5.00
3.00
6.00
6.00
YPS (%)
7.47
4.65
7.79
5.26
Return on capital
EPS (QR)
171.70
15.78
shares at the end of 2000
BVS (QR)
PBV
BVS adjusted to present
2.16
3.49
nm: not meaningful Sources: Qatar National Cement Company; MEED Exchange rate: $1=QR 3.64
17
INDUSTRIAL
■ Tel: (974) 4831199
■ Fax: (974) 4837878
■ Website: www.qimco.com
Chairman and
Abdulrahman bin Mohammed Jabor al-Thani
managing director
Vice-chairman
Nasser Rashid al-Kabi
Member
Sheikh Rashid bin Awaida bin Mohammad al-Thani
Member
Abdulla M Shamasan al-Sada
Member
Abdul Aziz al-Khulaifi
Member
Khalifa A al-Sowaidi
Member
Abdul Mohsen bin Yousuf al-Mana
Member
Abdulrahman bin A Abdul Ghani
Member
Saad M S J al-Rumaihi
Member
Abdulla Ali al-Abdulla
■ General manager: Abdulla Ali al-Abdulla
■ Number of issued 90 per cent partly-paid QR 10 shares: 20,000,000
■ Subsidiaries at end-2002
National Paper Industries Company (100 per cent); Qatar Sand Treatment Plant
(100 per cent); National Food Company (50 per cent); Qatar Metal Coating
Company (50 per cent); Qatar Nitrogen Company (50 per cent).
Qatar Sand Treatment Plant and National Paper Industries Company are registered in Qatar as branches of Qatar Industrial Manufacturing Company.
■ Associated companies
Qatar Jet Fuel Company (Qat Jet); Qatari-Saudi Gypsum Industries Company;
Qatar Clay Bricks Company; Qatar Plastic Products Company
■ Other investments
Qatar Flour Mills Company; Qatar National Bank; Qatar Shipping Company; Qatar
Telecom (Q-Tel); Qatar Real Estate Investment Company; Qatar Cinema & Film
Distribution Company; Trans-Gulf Investment Company (Oman); Al-Medina
Industrial Investments Company (Saudi Arabia); Qatar German Company for
Medical Appliances; United Development Company; National Chemical Industries
Corporation; Qatar Hot Briquetted Iron Company; Gulf Ferro Alloys Company;
Qatar Tunisian Food Company (51 per cent) and Qatar Acids Company; Qatar
Formaldehyde Company; National Leasing Company; Qatar Fuel Company; Qatar
Technical Inspection Company; Qatar government sovereign bonds; Ras Laffan
Gas Euro Bonds.
Background
Qatar Industrial Manufacturing Company (QIMC) was founded as a shareholding
company in February 1990 to encourage the involvement of the national business
community in Qatar’s economic development and to promote stronger ties
between the public and private sectors. It began operations in May 1990. The government owns 15 per cent of the company.
The general manager is Abdulla al-Abdulla, who has headed the company for
seven years. He was previously secretary-general of the Doha-based Gulf
Organisation for Industrial Consulting (GOIC).
QIMC’s strategy is to participate in industrial projects in Qatar. The company’s
projects have not been limited to Qatar only, but have extended to include other
Gulf states including Saudi Arabia, Bahrain and Oman. Since the mid-1990s, QIMC
has pursued a fresh policy. In Qatar, it is focussing on a smaller number of larger
projects in which it can take significant stakes. It has also over the past year expanded its investment in quoted Qatari securities to take advantage of the very encouraging trends in the Doha Securities Market (DSM).
The company is now planning to finance further capacity expansions in selected
subsidiaries. A study is under way about the possibility of raising the capacity of
the Qatari-Saudi Gypsum Industries Company by 60-100 per cent. The possibility
of increasing the capacity of the 120,000-tonne-a-year Qatar Metal Coating
Company by 50 per cent is close to approval. QIMC is also interested in taking a
stake in the United Development Company (UDC), now under development at
Ras Laffan. Production at the Jubail-based Gulf Ferro Alloys Company (Sabayek) is
still in suspension. A committee has been set up to examine ways of dealing with
the company’s debts and the sharp rise in electricity costs in 2001. Qatar Acids
Company, which started operating in July 2002, is meeting 80 per cent of Qatar’s
needs, but the company is encountering stiff regional competition from Saudi
producers of sulphuric acid. The Gulf Formaldehyde Company, in which QIMC has
a 15 per cent stake, is due to open in January 2004.
Performance
QIMC’s performance had been flat the five years ending 2000. However, in 2001
the company recorded a 9.5 per cent rise in net income to QR 24.4 million
($6.6 million), a record level. This reflected increased sales revenues and a substantial rise in other income which is driven by the rise in value in QIMC’s local
investments.
18
1999
Sales
111,654,812
Cost of sales and other
85,368,451
direct costs
Gross profit
26,286,361
Other income
17,658,793
Gross profit and other income
43,945,154
General and administrative
10,596,528
expenses
Provision for diminution in
8,405,808
value of investment
Net profit before minority interest 24,942,818
Minority interest
2,928,559
22,014,259
Balance sheet (QR)
Assets
Property, plant and equipment
46,514,799
Investment in associates
Investment securities
Long-term loans
14,187,630
Loans to affiliated companies
57,797,969
Inventories
0
Accounts receivable
0
and prepayments
Cash and bank balances
0
Current assets
134,424,383
Total assets
252,924,781
Current liabilities
25,491,946
20,792,044
Total liabilities
46,283,990
Share capital
150,000,000
Legal reserve
16,595,318
General reserve
25,045,473
Special reserve
0
Proposed dividends
15,000,000
0
Cumulative changes in fair value
0
0
206,640,791
252,924,781
shareholders’ equity
Profit margin
23.54
Return on capital
14.68
Return on shareholders’ equity
10.65
1999
Share price (QR)
14.00
20,000
76,923
EPS (QR)
1.10
PE
12.72
EPS adjusted to the present
1.10
BVS (QR)
10.33
PBV
1.36
Gross cash DPS (QR)
0.75
Gross cash DPS adjusted to the
0.75
present number of shares (QR)
YPS (%)
5.36
2000
2001
2002% change
96,204,625 120,943,335 144,979,329
19.87
70,160,665 87,241,347 95,321,713
9.26
26,043,960
13,762,509
39,806,469
9,849,998
33,701,988
22,331,632
56,033,620
11,938,732
49,657,616
17,460,794
67,118,410
12,891,571
47.34
-21.81
19.78
7.98
5,920,146
17,193,768
9,010,630
-47.59
24,036,325
1,735,771
22,300,554
26,901,120 45,216,209
2,475,435 4,090,393
24,425,685 41,125,816
68.08
65.24
68.37
65,107,493
33,373,474
26,715,183
12,837,630
0
0
0
59,219,152
24,236,895
41,829,645
0
1,250,000
13,124,017
33,909,004
54,243,426
34,320,377
63,125,645
0
0
12,569,282
21,266,911
-8.40
41.60
50.91
-100.00
0.00
-4.23
-37.28
0 98,792,041 121,132,851
124,854,650 145,825,062 154,969,044
262,888,430 272,360,754 306,658,492
22.61
6.27
12.59
20,810,678 13,813,178 14,916,344
28,636,407 29,751,742 30,464,541
49,447,085 43,564,920 45,380,885
160,000,000 170,000,000 180,000,000
18,825,373 21,267,942 25,380,524
18,615,972
3,099,088 1,312,322
0
0
0
16,000,000 17,000,000 18,000,000
0 10,000,000 20,000,000
0
7,428,804 15,784,761
0
500,000
800,000
213,441,345 229,295,834 261,277,607
262,888,430 272,860,754 306,658,492
7.99
2.40
4.17
5.88
19.34
-57.65
0.00
5.88
100.00
112.48
60.00
13.95
12.39
27.07
27.87
34.25
22.92
13.94
14.37
22.85
59.02
10.45
10.65
15.74
1.96
2000
2001
2002 31-Aug-03
13.00
15.10
21.10
54.10
20,000
20,000
20,000
20,000
280,000 260,000 302,000 422,000 1,082,000
71,429
82,967
115,934 297,253
1.12
1.22
2.06
11.66
12.36
10.26
26.31
1.12
1.22
2.06
10.67
1.22
0.80
0.80
11.46
1.32
0.85
0.85
13.06
1.62
0.90
0.90
6.15
5.63
4.27
4.14
1.66
Sources: Qatar Industrial Manufacturing Company; MEED Exchange rate: $1=QR 3.64
In 2002, the company’s profit rose by more than two-thirds to a record level. A
cash dividend of 10 per cent of paid-up capital was declared for the year. The price
of QIMC shares has risen strongly on the DSM. They closed at QR 47 ($13) on
30 July, almost 130 per cent up on the end-year figure. This gave the shares a trailing price-earnings (PE) ratio of 23 and a trailing dividend yield of 2 per cent.
Outlook
QIMC has devised and is implementing a sensible new policy of focussing on a
smaller number of more-profitable businesses with a strong emphasis on gasbased, high-tech sectors. The company has also benefited from the improving
performance of previously troubled firms. The outlook is bright in view of the
strong portfolio of established businesses and the buoyant growth of the Qatari
economy. The policy of selective and well-studied investments is paying off in
strong earnings growth and is reducing the risk profile of its subsidiaries and affiliates. Earnings will continue to grow, but perhaps not at the rate seen in 2003.
Qatar ig Insurance pages 19-23 9/9/03 9:36 am Page 19
INSURANCE
■ Industrial sector: insurance
■ Tel: (974) 4414151
■ Fax: (974) 4430530
■ Website: www.alkhaleej.com
Chairman and
Sheikh Abdullah bin Mohammed Jabor al-Thani
managing director
Deputy chairman
Sheikh Abdulla bin Ahmad al-Ahmed al-Thani
Member
Sheikh Fahad bin Mohammed Jabor al-Thani
Member
Sheikh Abdulla bin Nasser bin Abdullah al-Thani
Member
Saleh Mobarak al-Kholaifi
Member
Khaled Abdul Aziz al-Baker
Member
Abdullah Ali al-Ansary
Member
Hassan bin Hassan al-Mulla
■ General manager: Mohammad Amer Taha
■ Auditors: Andersen
Background
Alkhaleej Insurance Company was established in 1978 and offers all kinds of
insurance and reinsurance cover with the exception of life cover. Its other
activities include investment in real estate and securities. The company operates in Grand Hamad Avenue, where it has its headquarters; Madinat Khalifa;
Al-Rayyan; Ruwais, and at the Old Airport.
The insurer’s main insurance operations are divided into marine and aviation, fire, general accident and motor. Energy cover is provided by the fire
and general accident department. The general accident department contributes the major portion of underwriting income followed by the motor
division.
Alkhaleej specialises in offering insurance to the oil and gas sector which it
covers in co-operation with the Aon Group. The company is the leading
insurer for the Maersk Oil Qatar project in the Al-Shaheen field and for the
Ras Laffan Liquefied Natural Gas Company (RasGas) project.
Performance
Alkhaleej claims 15 per cent of the Qatari insurance market. Its profits followed an upward trend for most of the 1990s, but slumped 39 per cent to
QR 4.9 million ($1.3 million) in 1998, due to a 65 per cent decline in net
underwriting income to QR 3.4 million ($934,066). Net underwriting income
for 1999, in contrast, amounted to QR 7.4 million ($2 million).
The profit and loss statement for 2000 showed that there was a significant
rise in revenues from insurance, and all four areas of business produced
higher earnings. The profit performance was particularly marked in general
accident and in motor insurance. Total revenue from insurance activities rose
by 71 per cent in the year. Other income was up by 11 per cent and total
operating income grew by 33 per cent. Despite a sharp increase in provisions
and general expenses, Alkhaleej managed to report a 14 per cent rise in net
profits to QR 10.9 million ($3 million), a record level.
In 2001, there were adverse developments in the general accident and
motor insurance accounts which offset improvements in marine and fire
accounts. As a result, total underwriting income fell by more than 16 per cent
to QR 6 million ($1.6 million). There were also negative trends in the investment account. The result was that total underwriting and other income fell by
20 per cent to QR 12.7 million ($3.5 million) in the year. After general expenses, provisions and depreciation, net income fell by 29 per cent to QR 7.8 million ($2 million). The company, nevertheless, declared an unchanged cash
dividend and a bonus share issue equivalent to 10 per cent of paid-in capital.
In 2002, there was a 36 per cent rise in underwriting income. Lower net
interest income offset some of this rise, but net profit for the year was 23 per
cent higher at QR 9.6 million ($2.6 million). This allowed the company to
declare an unchanged cash dividend of 15 per cent and a 10 per cent bonus
share issue.
The price of Alkhaleej shares has advanced steadily in line with the market.
It closed on 20 July at QR 60.50 ($16.60), 21 per cent up on the year so far.
This gave the shares a trailing price-earnings (PE) ratio of 16.63. The trailing
dividend yield at that date was 2.48.
Outlook
Alkhaleej Insurance is benefiting from the strong trends in the Qatari economy which is helping to disguise the intense competition for business that is
a feature of the local insurance market. The sharp rise in underwriting
income is an encouraging sign that rates and risk are being brought into line.
Prospects for the company remain good, though the comparatively modest
rise in Alkhaleej’s share price in 2003 reflects the view that the insurance sector is not the most attractive place to invest.
1999
2000
2001
2002 % change
Underwriting income
Marine insurance, net income
1,174,642 1,235,187 1,356,409 1,445,930
6.60
Fire insurance, net income
278,740
388,535
937,033 1,572,493
67.82
General accident, net income
1,416,328 3,058,205 2,278,434 2,606,331
14.39
Motor insurance, net income
1,365,623 2,515,855 1,441,682 2,539,747
76.17
Total revenue
4,235,333 7,197,782 6,013,558 8,164,501
35.77
Other income
Investment income
4,397,059 5,540,889 4,075,765 5,118,389
25.58
Interest income
1,768,472 1,511,282
845,374
405,042
-52.09
Rent income
940,250 1,010,500 1,148,000
916,750
-20.14
Other income
583,491
650,688
618,769
673,354
8.82
Total other income
7,689,272 8,713,359 6,687,908 7,113,535
6.36
Total underwriting and other income 11,924,605 15,911,141 12,701,466 15,278,036
20.29
Expenditures
General and administrative expenses 2,716,286 3,355,104 3,565,913 4,045,241
13.44
Provision for doubtful accounts
232,659
412,544
153,739
273,988
78.22
Provision for decline in investment income
0
0
0
182,000
nm
Fixed assets depreciation
1,167,098 1,206,319 1,187,842 1,173,573
-1.20
Total expenditures
4,116,043 4,973,967 4,907,494 5,674,802
15.64
Net profit
7,808,562 10,937,174 7,793,972 9,603,234
23.21
Appropriations
na
na 1,000,000 1,199,924
19.99
Appropriable profit
na
na 8,793,972 10,803,158
22.85
na
na
809,000
960,324
18.71
na
na
225,048
0
-100.00
Proposed cash dividends
na
na 3,600,000 3,960,000
10.00
na
na 2,400,000 2,640,000
10.00
na
na
560,000
720,000
28.57
na
na 1,199,924 2,522,834
110.25
Balance sheet (QR)
Assets
Current assets
Cash and with banks
24,355,034 22,345,191 14,103,377 20,496,172
45.33
Accounts receivable, net
11,249,103 12,404,959 10,856,472 15,004,861
38.21
Due from reinsurers, net
4,455,765 4,450,413 3,184,555 2,735,478
-14.10
Other debit balances
808,829 1,205,904 1,009,886 1,796,369
77.88
40,868,731 40,406,467 29,154,290 40,032,880
37.31
Non-current assets
Fixed assets, net
12,271,452 11,485,870 10,537,328 9,815,838
-6.85
27,577,507 51,286,143 64,839,172 96,542,936
48.90
Investments held to maturity
0 3,830,587 13,701,698 14,972,436
9.27
Provision for unexpired risks
0
0 -5,369,357 -7,585,066
41.27
Provision for end of service benefits, net -598,387 -743,042 -868,442 -1,036,122
19.31
Technical reserves
0
0 -3,100,000 -3,122,578
0.73
39,250,572 65,859,558 79,740,399 109,587,444
37.43
Current due to banks
0
221,372
0
0
0.00
Provision for outstanding claims
0
0 4,530,655 6,918,409
52.70
Accounts payable and other liabilities
0
0 4,604,568 5,009,010
8.78
Due to foreign insurers
0
0 1,987,905 5,432,357
173.27
0
221,372 11,123,128 17,359,776
56.07
Net assets
80,119,303 106,044,653 97,771,561 132,260,548
35.28
(total assets less current liabilities)
Share capital
24,000,000 24,000,000 24,000,000 26,400,000
10.00
Statutory reserve
8,091,000 9,191,000 10,000,000 10,960,324
9.60
General reserve
20,000,000 23,774,952 24,000,000 24,000,000
0.00
Investment revaluation reserve
0 21,392,376 32,571,573 61,777,390
89.67
Retained earnings
1,597,778 1,000,000 1,199,924 2,522,834
110.25
Proposed dividends
4,800,000 6,000,000 3,600,000 3,960,000
10.00
0
0 2,400,000 2,640,000
10.00
58,488,778 85,358,328 97,771,497 132,260,548
35.28
Total liabilities and shareholders’ equity 99,955,896 126,363,182 108,894,625 149,620,324
37.40
Return on end-year capital
32.54
45.57
32.47
36.38
12.01
13.35
12.81
7.97
7.26
-8.92
1999
2000
2001
2002 31-Aug-03
Share price (QR)
410.00
31.50
33.00
50.00
61.30
240
2,400
2,400
2,640
2,904
98,400
75,600
79,200
132,000 178,015
27,033
20,769
21,758
36,264
48,905
EPS (QR)
32.54
4.56
3.25
3.64
PE
12.60
6.91
10.16
13.75
16.85
EPS based on present number of issued shares (QR) 2.69
3.77
2.68
3.31
BVS (QR)
243.70
35.57
40.74
50.10
PBV
1.68
0.89
0.81
1.00
1.22
BVS based on present number of issued shares 20.14
29.39
33.67
45.54
Gross DPS (QR)
15.00
1.50
1.50
1.50
Gross DPS adjusted to the
0.00
0.00
0.00
0.00
present number of shares (QR)
YPS (%)
3.66
4.76
4.55
3.00
2.45
nm: not meaningful na: not available Sources: Alkhaleej Insurance Company; MEED Exchange rate: $1=QR 3.64
19
INSURANCE
Qatar General Insurance & Reinsurance
Company
■ Address: Al-Jaidah Tower, A Ring Road, PO Box 4500, Doha
■ Tel: (974) 4357000/4417800
■ Fax: (974) 4437302
■ Website: www.qgirc.com
Chairman and
Sheikh Nasser bin Ali bin Saoud al-Thani
managing director
Deputy Chairman
Sheikh Mohamed bin Ali bin Saoud al-Thani
Member
Sheikh Jasim bin Khalifa bin Saoud al-Thani
Member
Mohammed Hamad al-Mana
Member
Ali bin Saad al-Kaabi
Member
Rashid Faisal al-Nuaimi
Member
Hamad Mohammed al-Mana
Member
Jamal Kamal Abu Nahl
■ General manager: Ghazi Kamal Abu Nahl
■ Overseas office: PO Box 8080, Dubai, UAE.
Tel: (9714) 268 8688. Fax: (9714) 268 8118.
Background
Qatar General Insurance & Reinsurance Company (QGIRC) was founded as a
shareholding company in 1978 and underwrites all classes of insurance. Its
main areas of operation are energy, motor, construction and fire. QGIRC provides insurance cover for companies operating in oil and gas industries, and
most of its business is in the energy sector, including marine cover. It has five
branches in Qatar and one in Dubai. The company accounts for about 35 per
cent of the Qatari market and is the second largest in Qatar after Qatar
Insurance Company.
Performance
After experiencing uncertain trends in earnings in the 1990s, QGIRC recorded
a heavy profit setback in 2000 despite encouraging progress in the insurance
account. This improvement in underwriting continued in 2001 with investment income also moving ahead strongly in the year to account for twothirds of total income. Insurance income was up again in the year and the
net effect has been a big improvement in the net profit of the company.
QGIRC reported a 98 per cent revenue rise and a 64 per cent profit increase,
the best performance by a Qatari insurance company in the year. In 2002, the
company reported a 93.3 per cent rise in total premium income to QR 235 million
($65 million). Net profits rose by 234 per cent to QR 36.2 million ($10 million).
Shareholders’ equity was lifted by 18 per cent. Reflecting the superb results,
a 25 per cent cash dividend was declared for the year. The price of QGIRC
shares rose by 67 per cent to QR 95 ($26) on 30 July for the level recorded at
the end of the year. This gave the stock a trailing dividend yield based on last
year’s earnings of 12 at the end of July.
Outlook
QGIRC is a well-established player in a market where margins are slim and
government project insurance is often placed offshore. The growth in the
Qatari economy is encouraging but competition will continue to be intense.
Helping the firm in 2002 was the sharp increase in the amount of premium
income written in the local market, in part due to the increase in major project insurance rates. QGIRC is now planning to launch medical insurance.
Total shareholders’ equity (QR ‘000)
Revenue
Net insurance revenue
Investment income
Real estate income
Other income
Total revenue
Expenditures
Depreciation of property and equipment
Allowances for bad debts
Total expenditures
Net profit
Appropriations
Effect of adopting IAS 10
Restated opening balance
Total appropriable profit
Proposed dividends
Realised gain/loss on trading investments
Carried forward
Assets
Cash and cash equivalents
Cash and with banks
Statutory deposits
Investments
Real estate
Accounts receivable
Reinsurance balances receivable
Property and equipment
Other receivables
Total assets
Outstanding claims, net
Unearned premiums
Policyholders’ payables
Insurance and reinsurance companies
Others
Provisions for employees’ leaving indemnities
Total liabilities
Share capital
Statutory reserve
Investments fair value reserve
Retained earnings
Share price (QR)
EPS (QR)
EPS adjusted to present number of shares (QR)
PE
BVS (QR)
BVS adjusted to present number of shares (QR)
PBV
Gross cash DPS (QR)
YPS (%)
2000
2001
2002 % change
14,963
10,709
0
6,201
31,873
17,155
42,121
0
3,816
63,092
19,145
53,839
0
2,837
75,821
11.60
27.82
0.00
-25.66
20.18
24,236
0
1,073
25,309
6,564
24,163
0
28,141
52,304
10,788
28,869
0
10,733
39,602
36,219
19.48
0.00
-61.86
-24.28
235.73
138,506
7,377
145,883
152,447
747
6,000
630
0
0
145,070
145,070
49,443
194,513
205,301
657
3,000
440
20,000
-124
181,328
181,328
0
0
217,547
1,079
7,500
800
0
995
209,163
24.99
-100.00
-100.00
5.96
64.23
150.00
81.82
-100.00
nm
15.35
51,999
0
4,500
70,434
0
87,987
0
82,204
0
297,124
46,863
0
4,500
154,352
15,715
122,058
0
60,917
0
404,405
66,046
0
4,500
216,035
13,728
97,414
0
59,735
0
457,458
40.93
0.00
0.00
39.96
-12.64
-20.19
0.00
-1.94
0.00
13.12
34,018
19,761
13,537
4,851
30,244
7,752
110,163
30,000
11,891
0
145,070
186,961
297,124
37,303
21,659
14,858
44,048
29,808
8,223
155,899
50,000
12,548
4,630
181,328
248,506
404,405
40,747
30,597
17,401
38,909
27,847
9,577
165,078
50,000
13,627
19,610
209,163
292,400
457,478
9.23
41.27
17.12
-11.67
-6.58
16.47
5.89
0.00
8.60
323.54
15.35
17.66
13.12
21.88
3.51
2000
58.00
3,000
174,000
47,802
2.19
1.31
26.51
62.32
0.04
0.93
1.00
1.72
21.58
4.34
2001
54.50
5,000
272,500
74,863
2.16
2.16
25.26
49.70
0.05
1.10
1.50
2.75
72.44
235.73
12.39
185.33
2002 31-Aug-03
57.00
97.00
5,000
5,000
285,000
485,000
78,297
133,242
7.24
7.24
7.87
12.33
58.48
0.06
0.97
1.66
2.50
4.39
2.58
nm: not meaningful Sources: Qatar General Insurance & Reinsurance Company; MEED Exchange rate: $1=QR 3.64
300,000
250,000
200,000
150,000
100,000
50,000
0
450,000
40,000
400,000
30,000
350,000
20,000
300,000
10,000
250,000
0
2000
20
50,000
2001
2002
200,000
2000
2001
2002
2000
2001
2002
INSURANCE
■ Address: Tamin Street, West Bay, PO Box 666, Doha
■ Tel: (974) 4490490
■ Fax: (974) 4831569
Chairman and
Sheikh Khalid bin Mohammad bin Ali al-Thani
managing director
Deputy chairman
Abdullah bin Khalifa al-Attiya
Member
Hussain Ibrahim al-Fardan
Member
Jassim Mohammed al-Jaidah
Member
Sheikh Hamad bin Faisal bin Thani al-Thani
Member
Tariq Marzooq al-Shamlan
Member
Khalaf Ahmed al-Mannai
Member
Khalifa Abdulla al-Subaey
Member
Ali al-Fardan
■ Paid-in capital: QR 145.2 million ($40 million)
■ Auditors: Deloitte & Touche
■ Regional offices:
Dubai Al Dana Building, Al Maktoum Street, PO Box 4066, Dubai. Tel: (9714)
222 4045. Fax: (9714) 223 8974. E-mail: [email protected].
Abu Dhabi Hamdan Street, Abdulla Darwish Building, PO Box 73797, Abu
Dhabi. Tel: (9712) 676 9466. Fax: (9712) 676 9265.
Al-Khobar Fluor Arabia Building, PO Box 3381, Al-Khobar 31952. Tel: (9663)
887 3006. Fax: (9663) 887 4005.
Background
Established in 1964, Qatar Insurance Company (QIC) is the oldest and largest
Qatari insurer. It writes all classes of insurance cover and a substantial portion of its business is in the energy sector. The company in 2002 accounted
for just over 50 per cent of Qatari premium income.
QIC operates through four offices in Qatar, one in Dubai, one in Abu Dhabi,
one in Saudi Arabia and a representative office in Malta. The highly-successful Dubai office recorded premium income of AED 60 million ($16.5 million)
in 2002. It opened a branch in Abu Dhabi at the end of 2001, and this office
has reported encouraging results. The Abu Dhabi office is focussing on capital projects, notably in the oil and gas sector. The next stage in a regional
diversification policy entailed opening an office in Saudi Arabia in 2002. QIC
plans to concentrate on the Eastern Province and to specialise in major oil
and gas projects, as it has done in Abu Dhabi.
The decision to develop regionally reflects the fact that Qatar is a small
market. QIC is also acting in anticipation of an open-door policy in Qatar as
part of the World Trade Organisation (WTO) process.
QIC has been licensed by the Qatar Central Bank to set up a joint venture
investment company with EDF Mann. This will allow QIC to develop funds for
distribution to its customers and others in Qatar and beyond. Senior managers say this is the first step towards selling investments. Final official
approval of the joint venture was still pending as this guide was being written.
The third new development is a greater shift into retail markets. QIC, traditionally oriented towards the corporate sector, is now offering retail medical,
primary healthcare and home insurance policies.
Like other Qatari insurance companies, QIC derives most of its revenue
from investment income, but the gap between this and insurance income has
been closing. The company is now restructuring to be more in line with the
market with the grouping of businesses into a retail group.
Performance
QIC has a superb position in the local market and a solid reputation which it
has successfully converted into superior earnings. In 2001, net income
advanced by 7 per cent to a record level of QR 70 million ($19 million). The
balance sheet was affected by the application of IAS 39 accounting rules and
this led to a substantial increase in shareholders’ equity through the fair
value assessment of assets. QIC declared a cash dividend of 35 per cent for
the year, unchanged from the 2000 figure. In addition, a bonus share issue of
10 per cent was paid. In 2002, net income rose by 15 per cent to QR 80.7 million ($22.2 million) despite a fall net insurance premium income. The cash
dividend was lifted to 45 per cent and a 10 per cent bonus share issue was
declared.
Outlook
QIC has a superb position in the local insurance market and this has enabled
it to produce consistently solid earnings and dividends. It is now seeking to
extend its brand across the region with a view to becoming a GCC insurance
company. This sound strategy will encounter a number of obstacles, notably
the lack of coherent insurance law in several regional markets. Regional
diversification may also stretch the capabilities of QIC. Nevertheless, the
company is soundly managed and has reported consistent earnings per share
growth (adjusted to present capital levels).
1999
42,460
Income from investments
47,645
Other income
2,558
Total income
92,663
24,350
3,024
Total expenses
27,374
65,289
Appropriations
46,129
Appropriable profit
111,418
0
10,000
Proposed dividend
30,000
Bonus shares
0
1,080
Contribution to social fund
1,584
Contribution for physiotherapy centre
0
Retained earnings at end of year
68,754
Assets
171,833
Investments
353,241
25,085
Accounts receivable from
38,395
reinsurance companies, net
0
0
Fixed assets
28,694
Other assets
9,036
Total assets
626,284
Insurance reserves
62,864
Accounts payable – reinsurance companies33,178
Other liabilities and provisions
34,488
Total liabilities
130,530
Share capital
100,000
Statutory reserve
50,000
General reserve
247,000
Proposed dividends
30,000
Proposed issue of bonus shares
0
0
Retained earnings
68,754
495,754
Total liabilities and shareholders’ equity 626,284
65.29
13.17
1999
Share price (QR)
82.30
10,000
823,000
226,099
EPS (QR)
6.53
PE
12.61
BVS (QR)
49.58
PBV
1.66
Gross DPS (QR)
3.00
Gross DPS adjusted to the present
2.07
YPS (%)
3.65
2000
42,729
48,381
2,160
93,270
23,971
3,281
27,748
65,522
2001
48,141
50,819
2,224
101,184
24,704
3,180
30,880
70,304
2002 % change
43,344
-9.96
70,305
38.34
2,711
21.90
116,360
15.00
28,879
16.90
3,469
9.09
35,650
15.45
80,710
14.80
68,754
134,276
10,000
10,000
42,000
20,000
1,080
1,632
0
49,564
49,564
119,868
0
10,000
42,000
12,000
1,080
1,638
0
53,150
53,150
133,860
6,000
10,000
59,400
13,200
1,620
3,776
0
39,864
7.24
11.67
nm
0.00
41.43
10.00
50.00
130.53
0.00
-25.00
142,864
403,370
30,684
50,960
147,227
557,864
64,884
28,263
159,273
698,719
34,175
25,982
8.18
25.25
-47.33
-8.07
13,689
23,357
0
8,689
673,613
19,950
20,961
0
10,920
850,069
18,930
19,132
0
8,651
964,862
-5.11
-8.73
0.00
-20.78
13.50
67,874
39,985
37,190
145,049
120,000
60,000
257,000
42,000
0
0
49,564
528,564
673,613
76,174
76,208
39,810
192,192
120,000
60,000
267,000
24,000
12,000
121,727
53,150
657,877
850,069
94,551
48,188
50,249
192,988
132,000
66,000
277,000
33,000
13,200
210,810
39,864
771,874
964,862
24.13
-36.77
26.22
0.41
10.00
10.00
3.75
37.50
10.00
73.18
-25.00
17.33
13.50
54.60
12.40
2000
54.00
12,000
648,000
178,022
5.46
9.89
4.51
44.05
1.23
36.40
3.50
2.89
58.59
61.14
4.36
10.69
10.46
-2.15
2001
2002 31-Aug-03
76.00
84.00
97.80
12,000
13,200
14,520
912,000 1,108,800 1,420,056
250,549 304,615
390,125
5.86
6.11
12.97
13.74
16.00
4.84
5.56
54.82
58.48
1.39
1.44
1.67
45.31
53.16
3.50
4.50
2.89
4.09
6.48
4.61
5.36
4.60
nm: not meaningful Sources: Qatar Insurance Company; MEED Exchange rate: $1=QR 3.64
Net income for the year (QR ‘000)
80,000
70,000
60,000
50,000
1999
2000
2001
2002
65 289
65 522
70 304
80 710
21
INSURANCE
■ Tel: (974) 4413413
■ Fax: (974) 4371497
Chairman
Sheikh Thani bin Abdulla al-Thani
Deputy
Abdul Rahman al-Abdulghani
Chief executive and
board member
Managing director
Shaikh Abdulla Bin Thani A al-Thani
Member
Dr Hussain Ali al-Abdulla
Member
Abdulaziz Y al-Khulaifi
Member
Abdulla M al-Emadi
Head of the sharia
Dr Ali Moehi el-Din al-Gura Daghi
supervisory board
■ General manager: Izzat M al-Rashid
■ Assistant general manager: Salah el-Din M Mohammed
■ Financial controller: Zaki K Akila
Background
Qatar Islamic Insurance Company (QIIC) was established in 1993. It is the only
sharia-compliant insurance company in Qatar and one of a handful of Islamic insurance companies anywhere in the Arab world. The company published its first financial statements in 1995. In 1999, QIIC went public with paid-up capital of QR 20 million ($5.5 million) distributed among 2 million QR 10 ($2.70) shares.
The principles governing Islamic insurance are that insurance funds should be
pooled and that investments should not go into areas proscribed by the sharia.
QIIC provides all types of insurance products and services in accordance with the
rules and requirements of the sharia, which likewise governs the spheres in which
the company invests. The company has a sharia supervisory board which reviews
all its transactions and operations.
In addition to providing cover for the conventional fields of marine, fire and
vehicle insurance, QIIC has introduced takaful insurance (the Islamic equivalent of
life insurance), for individuals, families and groups (corporations and organisations) in late 1999. The takaful schemes, launched in the autumn of 2000, aim to
provide financial benefits to their heirs upon premature death or permanent disability. QIIC currently owns a number of residential complexes.
The company applies the principles of co-operative insurance which call for all
the participants (insurance policyholders) to share the financial implications of
any harm or damage befalling a participant or his/her property. The contributions
(insurance premiums) paid by the participants form a fund from which the company pays all claims. After deducting all technical (insurance) reserves and provisions and operating costs expended on insurance operations, the resulting surplus becomes due and refundable to the participants (insurance policyholders).
QIIC maintains two separate accounts: one for the shareholders and the other
for the participants or policyholders. As well as managing and investing their own
funds, the shareholders manage and invest the participants’ funds on their behalf
in return for a share of the ensuing investment income. Once the participants’
share of investment income is added to the surplus from insurance operations,
QIIC distributes the total amount to participants annually. The amount distributed to each is in proportion to his/her contribution (insurance premium) thereby
reducing the actual cost of insurance to the participants.
QIIC has been actively launching new products including the Hajj & Umra plan
for people making the pilgrimage to Makkah and Medina. The Aman plan programme provides individual, family and group cover. In 2002, QIIC introduced the
Balsam medical care scheme. The Sanabel Fund is the only local fund in Qatar
with assets invested in low-risk, high-quality real estate and sharia-approved
assets in the local economy.
QIIC had five branches at the end of 2002. It moved to a new headquarters on
the C-Ring Road near the Toyota Towers at the end of 2002.
Performance
For the third consecutive year, QIIC outperformed the Qatari insurance market by
achieving a growth level of almost 38 per cent in gross premium income in 2002.
The company further diversified its insurance portfolio by raising the contribution
of non-motor insurance. By the end of 2002, non-motor insurance business
accounted for more than 40 per cent of the portfolio. Premiums from life-only
Takaful business rose by 239 per cent to account for 14.5 per cent of premium
income.
Outlook
QIIC is probably the most innovative sharia-compliant insurance company in the
Arab world and is at the vanguard of the industry worldwide. It is managed with
enviable efficiency and has delivered excellent results. This is reflected in the
remarkable strength of its share price which closed on 30 July at QR 101 ($28),
some 140 per cent higher than at the end of 2002.
22
1999
Policyholders’ account
Gross contribution
21,270,981
Reinsurance contribution ceded
3,304,525
Net contribution earned
17,966,456
Unexpired risk reserve
-308,122
Net earned contribution
17,658,334
Commission – net
242,845
Total underwriting income
17,901,179
Gross claims incurred
13,854,330
175,201
Reinsurance recoveries
693,429
Net claims incurred
13,336,102
Net underwriting income
4,565,077
Net underwriting surplus
517,594
Other income
879,129
Total surplus for the year
1,396,723
Surplus balance brought forward
0
Distributable surplus
1,396,723
Effect of IAS 39
0
Balance carried to retained surplus
0
Shareholders’ account
Income from shareholders’ investments
Income from shareholders’ investments 1,669,210
Shareholders’ share in policyholders’
377,771
investment income
Rental income
0
Total income
2,046,981
Expenses
Building maintenance
0
Depreciation
0
Finance charges
0
Total expenses
0
2,046,981
Balance sheet (QR)
Insurance operations assets
Total insurance operations assets
24,431,721
Shareholders’ assets
Investments
0
Investments in properties
0
Investments in shares
22,195,933
Accrued investment income
1,745,734
Total shareholders’ assets
23,941,667
Total assets
48,373,388
Due to reinsurers
1,995,435
5,294,808
Payables, accruals and other liabilities 6,955,472
Unexpired risk reserve
6,269,280
Distributable surplus – policyholders 1,396,723
Takaful
0
Retained surplus
0
Unpaid surplus
2,520,003
Fair value reserve
0
Total
24,431,721
Due to a bank
0
Proposed dividend to shareholders
0
Unpaid dividend
73,000
Total liabilities
24,504,721
Share capital
20,000,000
Reserves
3,868,667
Total shareholders’ equity
23,868,667
1999
Share price (QR)
16.00
Number of issued shares
2,000,000
32,000
8,791
EPS (QR)
1.72
PE
9.30
BVS (QR)
11.93
PBV
1.34
Gross DPS (QR)
0.00
YPS (%)
0.00
2000
2001
25,531,513
4,960,230
20,571,283
-900,741
19,670,542
511,915
20,182,457
14,914,621
-528,934
1,325,572
13,060,115
7,122,342
4,558,804
2,563,538
781,200
3,344,738
0
2,000,000
0
1,344,738
34,699,199
7,537,822
27,161,377
-2,630,974
24,530,403
951,615
25,482,018
17,769,511
-1,272,915
1,225,586
15,271,010
10,211,008
5,546,793
4,664,215
420,838
5,085,053
1,344,738
2,500,000
36,453
3,966,244
2002 % change
47,840,366
11,567,450
36,272,916
-4,140,636
32,132,280
1,018,097
33,150,377
22,052,356
3,393,131
3,107,436
22,338,051
10,812,326
5,654,157
5,158,169
649,488
5,807,657
3,966,244
4,200,000
-33,730
5,540,171
37.87
53.46
33.55
57.38
30.99
6.99
30.09
24.10
nm
153.55
46.28
5.89
1.94
10.59
54.33
14.21
194.95
68.00
-192.53
39.68
2,529,632 1,342,304 1,541,962
706,560
419,178
649,488
14.87
54.94
880,322 1,093,573 1,534,573
4,116,514 2,855,055 3,726,023
40.33
30.51
95,135
170,814
146,507
184,126
208,045
273,598
185,385
417,137
0
464,646
795,996
420,105
3,651,868 2,059,059 3,305,918
-14.23
31.51
-100.00
-47.22
60.55
26,491,701 37,521,711 56,776,838
51.32
20,705,663
8,839,656
0
1,307,881
30,853,200
57,344,901
15,909,888
11,794,711
0
252,200
27,956,799
65,478,510
15,996,695
14,472,384
0
87,500
30,556,579
87,333,417
0.55
22.70
0.00
-65.31
9.30
33.38
1,753,493
4,765,874
5,530,169
7,170,021
2,000,000
647,931
1,344,738
3,279,475
0
26,491,701
3,266,665
0
66,000
29,824,366
20,000,000
7,520,535
27,520,535
57,344,901
2000
17.00
2,000,000
34,000
9,341
1.02
16.61
13.76
1.24
1.00
5.88
2,425,660
6,038,789
7,143,750
9,800,868
2,500,000
1,282,265
3,966,244
4,260,421
103,714
37,521,711
18,956
0
186,842
37,727,509
20,000,000
7,751,001
27,751,001
65,478,510
2001
21.50
2,000,000
43,000
11,813
1.83
11.77
13.88
1.55
1.00
4.65
2,426,138
0.02
9,431,890
56.19
10,040,698
40.55
13,941,504
42.25
4,200,000
68.00
3,479,330
171.34
5,540,171
39.68
5,547,912
30.22
2,169,195 1991.52
56,776,838
51.32
0
-100.00
0
0.00
109,140
-41.59
56,885,978
50.78
20,000,000
0.00
10,447,439
34.79
30,447,439
9.72
87,333,417
33.38
2002 31-Aug-03
42.00
95.00
2,000,000 2,000,000
84,000
190,000
23,077
52,198
1.03
40.80
92.28
15.22
2.76
6.24
1.00
2.38
1.06
nm: not meaningful Sources: Qatar Islamic Insurance Company; MEED Exchange rate: $1=QR 3.64
INSURANCE
4 Jul 2000- 31 Dec 2001
2002 % change
2,751,489
3,849,708
39.91
Investment income
1,153,536
3,803,573
24.77
■ Address: 207, C Ring Road, PO Box 7171, Doha
■ Tel: (974) 433 5000
■ Fax: (974) 4654 7777
Chairman
Sheikh Nawaf bin Nasser bin Khalid al-Thani
Vice-chairman
Sheikh Ali bin Jassim bin Mohammad al-Thani
Managing director
Adel Ali bin Ali
Member
Mohammad Noor al-Obaidly
Member
Sheikh Jaber bin Hamad bin Jassim bin Jaber al-Thani
Member
Sheikh Hamad bin Nasser bin Faleh al-Thani
Member
Khaled bin Nasser Abdullah al-Misnad
Member
General Dahlan Basheer al-Hamad
Member
Saudi bin Omer al-Mana
Member
Hassan Jassim Darwish Fakhroo
Member
Hussam Abdul Salam Mohammed Abu Essa
■ General manager: Bassam Hussein
■ Technical manager: Mahmoud al-Nasir
■ Motor manager: Walid Adel al-Haj Mahmoud
■ Finance and administration manager: Anwar al-Adassi
■ Head of legal department: Samir Qawas
Interest income
11,445,368
1,745,882
-74.75
113,631
5,358,977
nm
Other income
13,507
93,853
594.85
Total income
Income from sale of investments
15,477,531
14,851,993
-4.04
Net paid claims
0
0
0.00
Policy acquisition cost
0
0
0.00
3,916,547
4,390,002
12.09
Salaries
Fixed asset depreciation
1,121,367
1,273,089
13.53
Administrative expenses
1,854,633
2,182,515
17.68
Total expenses
6,892,547
7,845,606
13.83
8,584,984
7,006,387
-18.39
Appropriations
Appropriable profit
0
7,726,486
nm
8,584,984
14,732,873
71.61
858,498
700,639
-18.39
Gains on sale of investments
0
0
0.00
Net changes in fair value reserve
0
0
0.00
Dividends
0
6,362,000
nm
7,726,486
7,670,234
-0.73
-37.10
Balance sheet (QR)
Assets
Background
Doha Insurance Company is the newest and fifth locally-registered insurance
company operating in Qatar. There are now a total of nine companies based in
Qatar servicing the market. Doha Insurance was established in 1999 with the support of 553 major investors. These include the Ministry of Defence Fund, Nasser
bin Khalid al-Thani & Sons, Doha Bank, the Al-Mana Group, Qatar National Bank,
Al-Ahli Bank of Qatar and other leading financial institutions. It was listed on the
Doha Securities Market (DSM) in December 2001.
The general manager is Bassam Hussein, a seasoned insurance professional
who qualified as an engineer and worked in the chemical industry until moving
into insurance in the US and in the Gulf. Doha Insurance says it is focussing on
the Qatar energy industry, but it says it can address any insurance requirement
and is starting to be active in the medical insurance field. The objective is to
secure the management of the medical insurance accounts of major firms. As part
of an effort to promote awareness of the insurance industry, Doha Insurance has
held seminars at its head office on insurance topics. The company has also been
appointed as an examination centre for the certificate of insurance practice, an
internationally-recognised industry qualification. It employs 65 people in its team.
Performance
Doha Insurance recorded total income of QR 17.7 million ($4.9 million) in the
18-month period starting 4 July 2001 and ending 31 December 2001, more than
70 per cent of it coming from investments where the company benefited from the
strong performance of the local stock market. Net income for the year was
QR 8.6 million ($2.4 million).
Business was expanded significantly in 2002. The company is now servicing
high-profile clients including Q-Tel, Qatar National Bank (QNB) and major hotels.
Most of the non-aviation business of Qatar Airways is now going to Doha
Insurance. The company is also writing business for customers in Kuwait, Saudi
Arabia and the UAE.
Doha Insurance reported a net income of QR 7 million ($1.9 million) in 2002.
This represents a substantial increase in business compared with the previous
18-month period. The key element of its performance was the fact that it made a
profit on its insurance account. A 5 per cent cash dividend was declared for the
year.
Trends in the first half of 2003 suggest that the company is on track to hit its target of premium income of QR 40 million-45 million ($11 million-12.36 million) for
the year as a whole. This in part reflects the substantial growth in major engineering project insurance premiums. In a new initiative Doha Insurance is offering car
warranty services.
The price of Doha Insurance shares almost doubled in 2002. They have risen by
two-thirds in the the first seven months of 2003. This gave the stock a trailing
price-earnings (PE) ratio of 73 on 21 July, a substantial premium suggestion that
expectations about earnings are extremely high.
4,414,118
4,805,902
8.88
Unearned premiums
2,841,728
5,839,352
105.49
Outstanding claims
529,649
1,700,311
221.03
IBNR
563,453
1,256,957
123.08
3,934,830
8,796,620
123.56
136,607
256,877
88.04
8,485,555
13,859,399
63.33
127,240,000
127,240,000
0.00
858,498
1,559,137
81.61
4,576,019
5,754,867
25.76
0
6,362,000
nm
7,726,486
7,670,234
-0.73
140,401,003
148,586,238
5.83
148,886,558
162,445,637
9.11
Outlook
Doha Insurance is an ambitious start-up business that is bringing new products
and services to a rapidly growing market. Well-capitalised and soundly managed,
the company is seeking to build upon its substantial underwriting competencies.
The company reported a significant profit in its first business period. The results
in 2002 showed a reasonable rate of return on assets and capital. Prospects for
2003 are good in view of the buoyancy of the local market and Doha Insurance’s
ambitious premium income target.
Market capitalisation ($)
92,607,802
58,249,125
Receivables
5,172,115
5,047,949
-2.40
Reinsurance receivables
1,489,137
1,934,175
29.89
Other current assets
745,742
1,381,043
85.19
100,014,796
66,612,292
-33.40
21,634,082
35,239,959
62.89
Investments held until maturity
15,987,758
50,544,417
216.14
Total investments
37,621,840
85,784,376
128.02
Net fixed assets
11,249,922
10,048,969
-10.68
148,886,558
162,445,637
9.11
Total assets
Payables
163,206
1,557,539
854.34
3,002,170
2,172,753
-27.63
Share premium surplus
163,809
163,809
0.00
Other current liabilities
1,084,933
911,801
-15.96
Reinsurance payables
Total technical reserves
Provision for staff indemnity
Total liabilities
Share capital
Statutory reserve
Investments market value
Retained earnings
6.75
5.51
-18.39
6.11
4.72
-22.88
2001
2002 31-Aug-03
Share price (QR)
13.00
24.00
45.10
12,724,000
12,724,000 12,724,000
Market capitalisation (QR)
165,412,000
305,376,000 573,852,400
45,442,857
83,894,505 157,651,758
EPS (QR)
0.67
0.55
PE
19.27
43.59
BVS (QR)
11.03
11.68
PBV
1.18
2.06
Gross DPS (QR)
0.00
0.50
YPS (%)
0.00
2.08
81.90
3.86
1.11
nm: not meaningful Sources: Doha Insurance Company; MEED Exchange rate: $1=QR 3.64
23
Qatar IG Services pages 24-32 9/9/03 9:36 am Page 24
SERVICES
1999
2000
2001
2,976,632
2,572,449
1,231,032
525,531
-52.15
Pre-operating expenses
993,125
741,009
900,367
724,355
28.25
Net founding expenses
0
0
0
0
0.00
1,983,507
1,831,440
280,665
-198,824
-84.68
46,365,551 23,789,664 38,843,509 16,664,735
63.28
Interest income
■ Industrial sector: services
■ Tel: (974) 4872510
■ Fax: (974) 4869543
Chairman
Mohamed Ali al-Harami
Vice-chairman
Khalifa Ahmad al-Jaber
Member
Sheikh Mohamed bin Jabor al-Thani
Member
Abdul Rahman al-Muftah
Member
Hamad Mohamed al-Mana
Member
Abdullah al-Sada
Member
Hussain Sofan al-Hubabi
Member
Adnan Abdul Rahman al-Mannai
■ Managing director: Salim Rashid al-Mohannadi
■ Project co-ordinator: Jamal Saleh Hammad
Net profit
2002 % change
Balance sheet (QR)
Assets
Accounts receivable
Interest income receivable
Other amounts receivable
3,092
3,087
0
7,719
nm
94,958
67,626
41,945
138,256
-37.98
21,335
12,405
30,590
11,000
146.59
46,484,936 23,872,782 38,916,044 16,821,710
Furniture and equipment, net
167,172
Cost of establishing hospital
2,713,401
102,429
62,920
-38.57
8,044,765 13,535,086 19,769,780
68.25
Prepayments to contractors
0 18,857,796 25,784,769
Work in progress
0
Land
1
Total fixed assets
Total assets
63.01
51,287
7,071,329
36.73
8,208,347 37,470,203 137,740,643
356.49
1
0.00
2,880,574 35,213,338 76,852,979 164,633,040
1
1
118.25
49,365,510 59,086,120 115,769,023 181,454,750
95.93
0
6,648,761
Background
Al-Ahli Hospital Company was established on 30 December 1996 with the
goal of setting up a specialised hospital and outpatient clinics. The company
hopes to attract patients from both inside and outside Qatar by providing
state-of-the-art medical facilities on a par with those found in top hospitals
in Europe and the US.
The contractors began work in June 2000 after a delay due to finalising
financing arrangements. The company secured a syndicated loan to cover the
project’s costs and equity for which Qatar National Bank acted as lead financier. Work on the building phase of the project was completed in June 2003.
The aim is to open the hospital sometime in the autumn of 2003.
Al-Ahli Hospital will have 250 beds, making it one of the biggest private
hospitals in the Gulf. In addition to the main building, there will be a
110-room nurses’ accommodation block and a 40-bed intermediate care
department. The complex will also include a two-level car park and support
buildings, including general stores and a mosque. The 40,000-square-metre
site is located on Ahmed Bin Ali Street. The Qatari government has granted
an additional 7,000 square metres of land for the project, bringing the total
area close to 47,000 square metres. The company is due soon to make a decision about the international firm that will have the contract to run the hospital.
Al-Ahli Hospital Company is setting up a health insurance scheme. Patients
will be able to pay for treatment either through the scheme or through oneoff payments for the treatment received. The company plans to offer both
individual health insurance and corporate health cover.
The company had 100 founder shareholders and, following an initial public
offering (IPO) in March-May 1996, the number of shareholders was increased
to about 2,600. In 1999, the company increased the amount of paid-up capital to 86 per cent of the authorised capital from 75 per cent the year before.
The final instalment was called up in the final quarter of 2001.
Short-term debt payable
Amounts due
83,269
587,053
96,019
99,736
-83.64
Founders’ deposits
-19.10
Performance
In the year ending December 2000, Al-Ahli Hospital Company recorded interest income of QR 2.6 million ($714,290) and a net profit of QR 1.8 million
($495,000). In 2001, the company reported net income of QR 1.2 million
($330,000), all due to interest income. The fall in income reflected the fact
that liquid financial resources have been invested in the project.
In 2002, investment income declined as the amounts invested in the project grew. The company recorded a net loss of almost QR 200,000 ($55,000).
No dividend was paid. Nevertheless, the share price rose dramatically in
2003 to close at QR 38 ($10) on 30 July. This was almost 130 per cent above
the level at the end of 2002. The price at this date was equivalent to almost
four times Al-Ahli Hospital’s book value.
Net profit (QR)
9,778,054 36,868,749
35,443
33,317
33,317
26,672
Excess amounts received from founders
0
0
0
0
0.00
Insurance premiums paid
0
738,751
4,354,532 10,114,289
489.45
Short-term call on shareholders
0
118,712
Bank loan
Total liabilities
Share capital
Additional paid-up capital
Excess income after expenses
2,474,877
66.62
8,007,882 14,261,922 49,584,323
0
0
78.10
0
0 43,710,000 72,830,000
nm
118,712
8,007,882 57,971,922 122,414,323
623.94
42,216,150 48,407,852 54,846,050 56,288,200
13.30
6,191,702
0
0
0
0.00
271,785
1,920,081
2,172,679
1,973,855
13.16
567,161
750,305
778,372
at the end of period
Legal reserve
778,372
3.74
49,246,798 51,078,238 57,797,101 59,040,427
13.15
95.93
4.70
3.78
0.51
-0.35
-86.47
4.03
3.59
0.49
-0.34
-86.46
1999
2000
2001
2002 31-Aug-03
Share price (QR)
5.30
5.40
14.00
5,628,820
5,628,820
5,628,820
5,628,820 5,628,820
29,832,746
30,395,628
78,803,480
93,438,412 245,416,552
8,195,809
8,350,447 21,649,308 25,669,893 67,422,130
EPS (QR)
16.60
0.35
0.33
0.05
15.04
16.60
280.77
nm
BVS (QR)
8.75
9.07
10.27
10.49
PBV
0.61
0.60
1.36
1.58
PE
160,000
1,200,000
120,000
400,000
80,000
0
40,000
1998
24
1999
2000
2001
4.16
Outlook
Investors in the Doha Securities Market (DSM) are showing great enthusiasm
for the company based on the recognition that it will be the best-equipped
hospital in the region. The challenge now is to ensure that it is managed
effectively and quickly earns a reputation for high-quality healthcare services
in a market where the public health system is well-established, high-quality
and free at point of use to Qatari nationals.
1,600,000
-400,000
nm
nm: not meaningful Sources: Al-Ahli Hospital Company; MEED Exchange rate: $1=QR 3.64
200,000
800,000
43.60
-0.04
Total assets (QR)
2,000,000
47.07
1999
2000
2001
2002
SERVICES
■ Address: C-Ring Road, PO Box 1970, Doha
■ Tel: (974) 4671620
■ Fax: (974) 4671511
Chairman and
Abdullah Naama
managing director
Vice-chairman
Ahmed bin Nasir Obeidan
Managing director
Mohammed Ismail Mamdani
Member
Dr Yousif al-Naama
Member
Khalid al-Bakir
Member
Ahmed Fakhroo
Member
Ali Ishaq
Member
Khalil el-Mulla
Member
Saoud al-Jufairi
■ General manager: Abdul Rahman Mohsen el-Mokadem
■ Auditors: PricewaterhouseCoopers
Background
Qatar Cinema & Film Distribution Company, the sole cinema operator in
Qatar, was established as a shareholding company in 1970. Its shareholders
are Qatari individuals, banks and companies. Since March 2000, the
company has allowed GCC investors collectively to acquire up to 25 per cent
of equity.
The company’s assets comprise the Doha & Gulf Cinema which occupies a
site in Doha. The Doha cinema is geared up to meet the needs of Asian expatriates, while the Gulf cinema caters for those interested in American films.
The company also owns the emiri cinema, which shows Indian films and
operates three-cinema cineplexes in the Landmark Mall and at The Mall,
both in Doha. In August 2001, the company opened a 500-seat cinema in
Salwa to show Tamil and Indian films. In total, it has almost 3,000 cinema
seats. In addition to operating cinemas, the company allows its Doha & Gulf
Cinema to double as a theatre and music hall. The company operates as an
advertising agent, claims rent from some real estate interests it has, currently
operates cafes adjoining its cinemas and harbours plans to open an entertainment and restaurant area next to its Doha & Gulf Cinema.
Qatar Cinema has benefited from the increasing popularity of the cinema,
which general manager Abdul Rahman Mohsen el-Mokadem attributes to
social changes, with young Qataris preferring to go out for entertainment
rather than staying at home. The strict implementation of video copyright
laws since 1996, more sophisticated marketing techniques and an increased
awareness among Qataris of international film releases due to cable television have all contributed to the growth in cinema attendance.
Qatar Cinema intends to continue to expand its operations in order to keep
up with growing demand. The company was due to open in the summer of
2003 a new cinema in the Royal Plaza Mall in Doha which will have three
screens and a total of 500 seats. An eight-screen cinema is due to be opened
in the Hyatt Plaza in March 2004.
The biggest new project calls for the existing Doha & Gulf Cinema complex
to be replaced with a five-storey building including a six-screen multiplex.
The multiplex will be able to screen European/North American, Arabic and
Indian films. Demolition of the existing complex is due to start this autumn.
The QR 65 million ($18 million) project is due to be completed in 2005.
1999
Income
8,011,607
Operating expenses
5,194,394
Operating profit
2,817,213
Other income
3,206,723
4,242,803
Assets
10,873,309
Short-term investments
1,195,970
473,542
Spare parts and inventories
133,136
Other amounts receivable
854,993
13,530,950
Investments in buildings for rent
5,763,050
Long-term investments
804,959
Total fixed assets
16,967,991
Other assets
18,623
23,554,623
Total assets
37,085,573
Current portion of long-term loan
200,040
Accounts payable
330,514
Accrued expenses and other balances 1,441,974
346,565
Proposed dividend
0
2,319,093
Long-term real estate loan
0
Total liabilities
2,319,093
Share capital
15,543,000
Legal reserve
9,784,125
General reserve
2,665,154
Compensation reserve
2,236,778
Retained earnings
3,896,238
Fair value reserve
0
Other reserve
0
34,125,295
Instalments on long-term loan
641,185
Profit margin
35.16
Return on capital
27.30
12.43
1999
Share price (QR)
35.20
1,554,300
54,711,360
15,030,593
EPS (QR)
2.73
PE
12.90
BVS (QR)
21.96
PBV
1.60
Gross DPS (QR)
2.30
YPS (%)
6.53
2000
8,753,022
5,936,622
2,816,400
3,021,866
2,024,055
3,814,211
2001
9,999,071
6,062,446
3,936,625
3,031,914
3,464,966
3,503,573
2002 % change
12,972,886
29.74
9,077,474
49.73
3,895,412
-1.05
3,646,933
20.28
3,780,773
9.11
3,761,572
7.36
9,401,226
0
1,001,670
151,821
674,445
11,229,162
9,062,484
2,000,928
14,848,800
50,304
25,962,516
37,191,678
6,385,890
0
1,052,041
195,162
715,331
8,348,424
8,858,701
3,891,314
15,788,378
725,169
29,263,562
37,611,986
7,204,606
0
1,533,524
175,151
1,062,205
9,975,486
8,621,807
5,504,884
14,259,348
501,451
28,887,490
38,862,975
12.82
0.00
45.77
-10.25
48.49
19.49
-2.67
41.47
-9.68
-30.85
-1.29
3.33
200,040
343,830
1,842,047
303,706
0
2,689,623
0
2,689,623
15,543,000
9,784,125
2,665,154
2,236,778
3,831,853
0
0
34,060,910
441,145
37,191,678
200,040
273,435
2,545,595
0
0
3,019,070
0
3,019,070
15,543,000
9,784,125
2,665,154
2,236,778
3,108,604
634,860
379,290
34,351,811
241,105
37,611,986
200,040
251,626
2,772,371
0
0
3,224,037
0
3,224,037
15,543,000
9,784,125
2,665,154
2,236,778
3,419,460
1,416,396
422,960
35,487,873
151,065
38,862,975
0.00
-7.98
8.91
0.00
0.00
6.79
0.00
6.79
0.00
0.00
0.00
0.00
10.00
123.10
11.51
3.31
-37.34
3.33
32.18
39.37
30.03
-23.73
24.54
22.54
24.20
7.36
11.20
10.20
10.60
3.93
2000
2001
2002 31-Aug-03
29.00
27.00
32.50
40.00
1,554,300 1,554,301 1,554,301 1,554,301
45,074,700 41,966,127 50,514,783 62,172,040
12,383,159 11,529,156 13,877,688 17,080,231
2.45
2.25
2.42
11.82
11.98
13.43
16.53
21.91
22.10
22.83
1.32
1.22
1.42
1.75
2.30
2.30
0.00
7.93
8.52
0.00
0.00
na: not available Sources: Qatar Cinema & Film Distribution Company; MEED Exchange rate: $1=QR 3.64
Performance
Qatar Cinema is recording steadily expanding sales in a small market where
it has an effective monopoly. Responding to changing tastes, the company
has taken important initiatives in opening smaller, more flexible cinemas in
shopping centres. In 2001, income rose by 13 per cent to QR 9.9 million
($2.7 million), but the rise in revenue was offset by a substantial increase in
the cost of film. The balance sheet was barely changed year-on-year. In 2002,
total income rose by 30 per cent to QR 13 million ($3.6 million). Operating
expenses rose by 50 per cent in the year. Consequently, net profit rose by a
modest 7.4 per cent to QR 3.8 million ($1 million).
The price of Qatar Cinema shares rose by 20 per cent in 2002. They closed
at QR 40 ($11) on 30 July, a further 23 per cent up. This gave the shares a
trailing price-earnings (PE) ratio of 16.5. The price-to-book-value (PBV) ratio
at that date was under 2.
Outlook
Qatar Cinema is demonstrating genuine ambition in its plans for the future.
The decision to replace the existing complex on the C-Ring road with a major
new centre is by far the most important investment decision in the company’s history. The move will also have an impact on earnings for the period of
construction. Nevertheless, the active programme of opening new cinemas in
other parts of Doha provides comfort that earning levels will be maintained.
Population and earnings growth coupled with the influx of Westerners due to
the rapid growth of the economy suggests that the company’s investments
will be justified. For the moment, Qatar Cinema’s monopoly is intact. The
investment programme probably reduces the chances that it will face competition soon. The real test will come with the opening in less than two years of
the new complex.
Net profit (QR)
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
1999
2000
2001
2002
25
SERVICES
■ Industrial sector: electricity and water
■ Tel: (974) 4858585
■ Fax: (974) 4831426
Chairman
Abdulla bin Hamad al-Attiyah
Vice-chairman
Hamza Mohammad al-Kuwari
Member
Sheikh Hamad bin Jassim bin Mohammed al-Thani
Member
Nasser Khalil al-Jeedah
Member
Saud Jassem al-Jufairi
Member
Saeed Abdullah al-Misnad
Member
Tareq Marzook al-Shamlan
Member
Adel Ali bin Ali
Member
Khalid Mohamed Abdullah al-Attiya
Member
Hitmi Ali Khalifa al-Hitmi
Member
Ali Husain al-Sada
■ General manager: Fahad Hamad al-Mohannadi
■ Paid-in capital: QR 1,000 million ($274.7 million)
■ Auditors: PricewaterhouseCoopers
Background
Qatar Electricity & Water Company (QEWC) was established by emiri decree
number 89 in 1990 to operate and maintain electricity generation and water
desalination plants. The company is 42.74 per cent owned by the government. The remaining shares are held by individual and institutional Qatari
investors. Until the creation of the Saudi Electricity Company, QEWC was the
largest private power and water company in the Middle East.
QEWC has now taken over all the power and water assets previously owned
and operated by the Qatar Electricity & Water Corporation (Kahramaa), the
government department regulating the utilities sector. The company’s assets
now comprise:
■ the Ras Abu Fontas A power and water plant.
■ the Ras Abu Fontas B power and water plant. This includes the Ras Abu
Fontas B1 expansion project which was completed on 1 July 2002.
■ the Al-Sailiya, Al-Wajba and Doha South power stations.
■ the Dukhan desalination plant. This was transferred to QEWC on
1 January 2003.
This gave QEWC the capacity to produce the total of 2,105 MW of power
and 105 million gallons a day (g/d) of water. The company also has an agreement with Kahramaa for operating the Ras Abu Aboud station for one year.
The plant is small and old with an official capacity of more than 200 MW.
QEWC has invested in the Ras Laffan power and desalination plant. This
has a total capacity of 750 MW of power and 40 million g/d of water. The project is to be completed in 2004. QEWC has a 25 per cent stake in the capital
of the Ras Laffan Power Company and a 30 per cent stake in the AES Ras
Laffan Operation Company which will manage and operate the plant.
Performance
QEWC is heavily capitalised and enjoys a reliable flow of income from its offtaker Kahramaa, the sole power and water provider in the Qatari system. As
more capacity comes on stream by expansion of acquisition, the trend is for
revenue to rise steadily in line with Qatar power and water demand. This is
projected to grow by 7 per cent in volume terms for the indefinite future.
The company reported a rise in sales of less than 1 per cent in 2001 to
QR 702.7 million ($193 million). Because of a fall in financial income, net
income fell by 1.7 per cent to QR 26,867 million ($7,381 million).
In 2002, total electricity and water production sales revenue rose to
QR 773 million ($212 million) from QR 702 million ($193 million) in the previous 12 months. Investment and other revenues including the revenues
accrued from managing and operating Kahramaa stations. The sharp increase
in operational costs in the year reflected the addition of Ras Abu Fontas B1,
an expansion of the Ras Abu Fontas B plant, plus labour costs associated
with the plant. QEWC also paid liquidated damages for delays in the start of
operations at Ras Abu Fontas B1. Net profit for the year rose by just over
2 per cent to QR 272 million ($75 million).
The price of QEWC shares rose by 33 per cent in 2002 to QR 30.60 ($8) at
the end of the year. They closed on 30 July at QR 47.80 ($13), giving them a
trailing price-earnings (PE) ratio of 17.5 on that date. The price-to-book-value
(PBV) ratio at that date was more than 3. A cash dividend of 6.5 per cent was
declared for the year, giving the stock a trailing dividend yield at the end of
July 2003 of not much more than 1 per cent.
Outlook
QEWC is now the largest private power and water producer in the Gulf. As
such, it is providing a model for other countries in the region privatising their
utilities to improve efficiency and cut costs. The company has a complete
monopoly of power and water generation in Qatar, but its activities are care26
1999
2000
2001
Sales
494,864
697,059
702,733
773,480
10.07
Cost of sales
242,697
309,572
323,876
365,530
12.86
Gross profit
252,167
387,487
378,857
407,950
7.68
45,341
19,815
7,035
7,437
5.71
4,752
13,849
23,156
27,469
18.63
292,756
393,453
362,736
387,918
6.94
0
0
0
-6,600
nm
135,123
177,050
159,026
152,532
-4.08
Financial income
57,857
57,011
44,593
23,907
-46.39
Deferred income
0
0
19,630
19,630
0.00
Miscellaneous income
0
0
739
96
-87.01
Other income
Operating profit
Liquidated damages to Kahramaa
Finance costs
Share of results of associates
2002 % change
0
0
0
-433
nm
215,490
273,414
268,672
271,986
1.23
20,457
100,000
110,000
60,000
-45.45
Impact of applying IAS-10 (revised)
60,000
0
0
0
0.00
Restated retained earnings
80,457
0
0
0
0.00
295,947
373,414
378,672
331,986
-12.33
Net profit
Appropriations
Appropriable profit
21,549
27,341
26,867
27,199
1.24
112,798
134,073
118,855
111,837
-5.90
1,600
2,000
2,950
2,950
0.00
0
0
110,000
60,000
-45.45
60,000
100,000
60,000
65,000
8.33
100,000
110,000
60,000
65,000
8.33
Prior year’s dividend
Proposed dividend
Assets
Property plant and equipment
2,899,874 2,790,314 3,020,928 3,015,676
Investment in affiliated company
0
0
15,921
-0.17
66,949
320.51
1,772,279 1,400,848 1,033,136 1,245,750
20.58
Total assets
4,672,153 4,191,162 4,069,985 4,328,375
6.35
Current liabilities
na 2,268,013 2,341,905 2,310,618
1,103,675
Total liabilities
Share capital
477,782
186,991
332,632
-1.34
77.89
na 2,745,795 2,528,896 2,643,250
4.52
1,000,000 1,000,000 1,000,000 1,000,000
0.00
Statutory reserve
61,155
88,496
115,363
142,562
23.58
General reserve
112,798
246,871
365,726
477,563
30.58
Retained earnings
100,000
110,000
60,000
65,000
8.33
1,273,953 1,445,367 1,541,089 1,685,125
9.35
6.35
Profit margin
50.96
55.59
53.91
52.74
21.55
27.34
26.87
27.20
-2.17
1.23
16.92
18.92
17.43
16.14
-7.42
1999
2000
2001
2002 31-Aug-03
Share price (QR)
11.00
12.40
23.00
30.60
53.90
100,000
100,000
100,000
100,000
100,000
1,100,000 1,240,000 2,300,000 3,060,000
5,390,000
302,198
340,659
631,868
840,659
2.15
2.73
2.69
2.72
EPS (QR)
EPS based on present number of shares (QR) 2.15
2.73
2.69
2.72
PE
5.10
4.54
8.56
11.25
12.74
14.45
15.41
16.85
16.85
BVS (QR)
14.45
15.41
PBV
0.86
0.86
1.49
1.82
Gross DPS (QR)
0.60
1.00
0.60
0.65
Gross DPS adjusted to present share level (QR)
0.60
1.00
0.60
0.65
YPS (%)
9.09
8.06
2.61
2.12
1,480,769
20.06
3.50
1.11
nm: not meaningful na: not available Sources: Qatar Electricity & Water Company; MEED Exchange rate: $1=QR 3.64
fully regulated. The experience of 2002 shows that monopolies can have
occasional problems. Earnings rose modestly in the year. Nevertheless, the
company has a guaranteed long-term market and its cash-flow position is
excellent. The next challenge is bringing the Ras Laffan power station into
operation. Beyond that, questions will be raised about whether QEWC
should be allowed to maintain its monopoly or whether a wholly-independent competitor should be allowed.
SERVICES
Qatar Navigation
■ Tel: (974) 4468666
■ Fax: (974) 4468777
Honorary chairman
Ali bin Khalifa al-Hitmi
Chairman
Saleh Mubarak al-Kholeifi
Vice-chairman
Sheikh Abdullah Mohammad Jabor al-Thani
Member
Sheikh Jassim bin Hamad bin Jabor al-Thani
Member
Haider Suleiman Haider
Member
Saad al-Mana
Member
Mohammad Hamad al-Mana
Member
Adel Ali bin Ali
Member
Mohammad Marzouq al-Shamlan
Member
Ali Hussain Ali al-Sada
Member
Hitmi bin Ali al-Hitmi
■ Chief executive: Khalifa Saqr al-Hitmi
■ Assistant chief executive, finance/investment affairs: Mohammad al-Sulaiti
■ Assistant chief executive, administration/personnel: Moayied al-Banai
■ Assistant chief executive, shipping and transport: Khalifa bin Ali al-Hitmi
■ Auditors: Andersen
Background
Qatar Navigation, known until the summer of 2003 as Qatar National Navigation
& Transport Company, was founded in 1957. Since 1963 it has held the sole concession to undertake the operations of shipping agencies and coastal sea transport in Qatar.
In 1974, the company began to diversify its activities in order to reduce its
dependence on agency operations and it has since introduced operations ranging
from ship repair and steel fabrication to dredging, bunkering services and offshore
construction and maintenance.
The shipping agency department remains at the core of Qatar Navigation’s operations. It now represents more than 50 ship owners. Among the agencies represented are Maersk Line and P&O Containers. Until April 2001, the company was
the sole shipping agent in Qatar. Since then, the market has been opened to competition and there are now about 20 shipping companies registered as shipping
agencies. As a result of this change, 16 lines left Qatar Navigation’s agencies. The
company also provides equipment and manpower to companies involved in oil
and gas projects in Qatar, including Ras Laffan Liquefied Natural Gas Company
(RasGas) and Maersk Oil.
Qatar Navigation operates through three ports: Doha Port, Qatar’s main commercial port; Mesaieed Port, an industrial port which also has three commercial
berths; and Ras Laffan Port, which is mainly designed for vessels loading liquefied
natural gas (LNG) and which also has commercial berths to handle heavy project
cargo, construction materials and containers.
The company’s activities fall into five main categories:
■ Shipping agencies and cargo handling The number of vessels calling at
Qatari ports and the volume of goods handled are rising. The number of vessels
calling at Qatari ports increased by 17 per cent to 1,020 in 2002. Imported goods
unloaded in Qatari ports by Qatar Navigation rose sharply to 5 million tonnes.
The company still represents the bulk of major enterprises in Qatar. Since 1997,
the company has supplied equipment and manpower to third parties. It has
recently concluded contracts with RasGas and Qatar Petroleum (QP).
■ Marine transport A total of 14 marine units are operated. They comprise fullycellularised vessels, open-top barges, towing tugs and harbour tugs. Two new vessels of 500 twenty-foot-equivalent-unit (TEU) capacity were due to be delivered by
the summer of 2003. These are to be used on services for Qatar Chemical
Company (Q-Chem).
■ Navigation freight services This department covers freight forwarding and
logistics. Assets comprise a fleet of flat trailers and 11 hydraulic cranes. In 2002,
the company signed an exclusive agency agreement with Eagle Global Logistics of
Houston.
■ International land transport The division has a fleet of 146 flat/box trailers.
■ Dubai branch The office provides shipping services for company vessels and
other owners, freight forwarding and land transport and warehousing.
■ Commercial activity In this area, the company runs a ship maintenance and
repair facility in a dry dock in Doha port. It also entails representation of shipping
agencies and the Qatar Air Sea Travel office providing services to travellers.
■ Offshore services vessels Qatar Navigation operates a fleet of offshore oil field
vessels working on contracts for QP and others.
■ Shiprepair and steel fabrication Qatar Navigation has a 3,300-tonne-capacity
floating dock and other facilities. In 2002, a total of 37 vessels used the dock. In
addition, the department provides steel fabrication services and other competencies in the non-marine field.
■ Fleet and technical This unit is responsible for supervising, maintaining and
running all vessels owned or managed by Qatar Navigation.
Qatar Navigation
Consolidated profit and loss (QR)
1999
Operating income
284,318,649
Operating expenses
213,471,081
Gross profit
70,847,568
Other income
70,340,435
Profit on sale of vessels,
0
plant and equipment
Total profit
141,188,003
General and administrative costs 22,025,201
Financial charges
6,103,922
Net profit before minority interest 113,058,880
Provision for doubtful debts
0
Provision for slow-moving inventory
0
Minority interest, net
51,373
Provision for social and
3,000,000
charitable activities
110,110,253
Balance sheet (QR)
Assets
390,777,865
Accounts receivable and accruals 149,431,130
Inventories
32,959,895
Due from related parties
0
Investments held for trading
72,441,043
645,609,933
0
Investments held until maturity
0
Investments in associates
0
Investments in lands and building, net
0
Investments
205,756,839
Notes receivable, long-term
5,411,095
Dry docking costs, net
5,463,011
Fixed assets, net
304,691,872
521,322,817
1,166,933
Net current assets
490,031,759
Net assets
950,272,944
Accounts payable and accruals 67,143,500
Current portion of long-term loans 88,434,674
Obligations under finance lease
0
Current liabilities
155,578,174
Minority interest, net
575,105
Notes payable, long-term
0
Term loan
44,770,803
Employees’ terminal benefits
15,735,724
61,081,632
Total liabilities
216,659,806
Share capital
200,000,000
Proposed issue of bonus shares
0
Legal reserve
121,547,149
General reserve
516,549,228
Proposed dividends
80,000,000
Fair value reserve
0
Retained earnings
47,912,246
966,008,623
1,182,668
shareholders’ equity (‘000)
Profit margin
24.92
Return on capital
55.06
11.40
1999
Share price (QR)
62.20
20,000
1,244,000
341,758
EPS (QR)
5.51
PE
11.30
BVS (QR)
48.30
PBV
1.29
Gross DPS (QR)
4.00
Gross DPS adjusted to present number of shares (QR) 0.00
YPS (%)
6.43
2000
2001
2002 % change
300,314,532 293,886,090 226,616,113
-22.89
227,604,448 227,882,447 170,317,243
-25.26
72,710,084 66,003,643 56,298,870
-14.70
73,750,595 85,565,141 115,721,963
35.24
0
0
0
0.00
146,460,679 151,568,784 172,020,833
20,278,422 27,146,314 28,493,826
8,065,962
3,952,030
981,960
118,116,295 120,470,440 130,088,554
0
3,000,000 8,520,604
0
0 3,935,889
173,784
-138,304
317,721
3,000,000
3,000,000 3,000,000
13.49
4.96
-75.15
7.98
184.02
nm
-329.73
0.00
115,290,079 117,332,136 127,406,275
8.59
367,163,511
136,839,520
28,244,594
143,076
55,075,137
587,465,838
261,620,083
8,852,553
15,000,000
32,124,454
0
2,543,628
4,975,256
274,639,874
599,755,848
1,187,222
474,491,556
997,748,703
306,361,546 243,579,209
130,669,343 85,706,884
21,104,921 21,600,001
5,527,929 2,533,432
40,077,004 84,121,338
503,740,743 437,540,864
572,068,656 748,162,707
14,966,565 19,405,650
52,005,000 72,921,725
95,998,324 119,609,584
0
0
2,661,523 1,728,528
3,085,519 1,966,663
166,841,490 186,453,338
907,627,0771,150,248,195
1,411,368 1,587,789
439,817,031 366,014,886
1,283,565,433 1,426,041,095
-20.49
-34.41
2.35
-54.17
109.90
-13.14
30.78
29.66
40.22
24.60
0.00
-35.05
-36.26
11.75
26.73
12.50
-16.78
11.10
68,668,118 51,524,292 53,818,224
44,306,164 12,399,420 17,707,754
0
0
0
112,974,282 63,923,712 71,525,978
401,321
359,625
41,904
0
17,520
136,440
46,893,162 32,715,013 60,279,756
29,204,218 30,786,517 29,763,886
76,498,701 63,878,675 90,221,986
189,472,983 127,802,387 161,747,964
200,000,000 200,000,000 200,000,000
0
0
0
133,076,157 144,809,371 157,549,998
569,672,545 591,721,467 611,787,115
80,000,000 80,000,000 90,000,000
0 252,034,595 351,703,982
15,000,000 15,000,000 15,000,000
997,748,7021,283,565,4331,426,041,095
1,187,222
1,411,368 1,587,789
4.45
42.81
0.00
0.00
-88.35
678.77
84.26
-3.32
41.24
26.56
0.00
0.00
8.80
3.39
12.50
39.55
0.00
11.10
12.50
24.21
57.65
11.56
2000
55.50
20,000
1,110,000
304,945
5.76
5.76
9.63
49.89
49.89
1.11
4.00
0.00
7.21
22.46
58.67
9.14
2001
66.20
20,000
1,324,000
363,736
5.87
5.87
11.28
64.18
64.18
1.03
4.00
0.00
6.04
24.84
10.62
63.70
8.59
8.93
-2.26
2002 31-Aug-03
95.00
123.00
20,000
20,000
1,900,000 2,460,000
521,978 675,824
6.37
6.37
14.91
19.31
71.30
71.30
1.33
1.73
4.50
0.00
4.74
3.85
nm: not meaningful Sources: Qatar Navigation; MEED Exchange rate: $1=QR 3.64
27
SERVICES
■ Tel: (974) 4364440
■ Fax: (974) 4364450
Chairman
Shaikh Khalid bin Thani al-Thani
Acting
managing director Abdul Basi Ahmad al-Shaibei
Assistant
managing director Abdullah Ahmad al-Suwaidi
Member
Nasser Rashid Sraiya al-Kaabi
Member
Dr Yousef Ahmad al-Naama
■ General manager: Mohammad bin Misnad al-Misnad
Background
Qatar Real Estate Investment Company (QREIC) was established as a shareholding company in January 1996. Its main activities are establishing and
developing housing projects and complexes and buying and selling land. Its
development work centres on building housing complexes for major Qatari
oil and gas companies in Ras Laffan, the terminal for North Field gas in the
north of the country; Dukhan, the largest oil and gas operations centre on
the west coast; and Mesaieed, the industrial city south of Doha in the southeast.
The company’s main project to date is a housing complex for Qatar
Liquefied Gas Company (Qatargas) for which construction work has been
completed. The scheme entailed building 823 homes plus associated amenities and utilities on a total area of 160,000 square metres. The second major
project is the Ras Laffan Liquefied Natural Gas Company (RasGas) housing
project between Al-Khor and Dakhira. It entails building a total of 214 villas
and 482 apartments plus all support facilities. The final phases of the project
were completed in 2003.
QREIC has worked on a series of housing projects for Qatar Petroleum
(QP), the national oil company. The first QP project was a QR 70 million
($19.2 million) housing development involving the construction of 200 flats
divided into 50 units at Dukhan. This was completed in July 1999 and the second phase in January 2000. A third QP housing project, worth
QR 50 million ($13.7 million), got under way in 2002 and QREIC is in preliminary discussions with QP with phases four and five.
During 2000, QREIC started work on a housing complex for 2,000 workers in
Mesaieed. Work on the QR 19 million ($5.2 million) scheme was completed
in early 2002 and rented out during the year. QREIC completed work on its
QR 40 million ($11 million) commercial complex in the city. Further major
work is in prospect in Mesaieed. One of the biggest new projects is a medical
centre in Mesaieed which was getting under way in the autumn of 2002. A
clinic was completed there in July 2003.
New work includes a contract to design and build 1,2080 apartments in
Dukhan for QP. A contract was due to be awarded in August 2003 for 1,100
villas and apartments in Mesaieed for QP. The second phase of the labour
camp in the city is to be put out to tender in September 2003. In Dukhan, a
mixed shopping and apartment centre is to be built.
QREIC operates by securing loans to finance construction work and generates income through long-term leases to QP, RasGas and other blue-chip
Qatari customers. Work on the RasGas project was partly financed through a
QR 100 million ($27.5 million) loan from the Jeddah-based Islamic
Development Bank. Qatar International Islamic Bank financed the balance in
a QR 23 million ($6.3 million) loan. The company has authorised capital of
QR 250 million ($69 million), of which 87.5 per cent is paid-up.
Performance
QREIC’s financial performance has been impressive. In 2001, the company
reported turnover of QR 70.5 million ($19.4 million), 13 per cent up on the
previous 12 months. Profits in the year rose by 8 per cent to QR 46.2 million
($12.7 million). The balance sheet is strong with its paid-in capital of
QR 250 million ($69 million). QREIC declared a cash dividend of 8 per cent of
par value for 2001, 60 per cent higher than the figure for 2000.
Net profits rose by 3 per cent to QR 45.4 million ($12.5 million) in 2002.
The cash dividend was lifted to 12 per cent for the year. The price of QREIC
shares rose by 73 per cent to QR 29 ($8) in 2002. They closed at QR 42.50
($11.70) on 30 July, almost 50 per cent up on the end-2002 level. This gave
the shares a trailing price-earnings (PE ) ratio at that date of 23.4 and a trailing dividend yield of 2.8 per cent.
Outlook
QREIC is well-positioned to continue to produce solid results. It has a long
pipeline of projects and is the developer of choice for major housing and
commercial schemes in Mesaieed, Dukhan and Ras Laffan.
28
1999
Income
50,181
General and administrative costs
3,973
13,877
Net profit
32,331
Appropriation of profit
Retained earnings at the start of the year 7,188
Total appropriable profit
39,519
3,233
Dividends
31,250
Bonus shares
0
550
Other transfers
0
Retained earnings at the end of the year 4,488
Assets
0
Investment property
0
Deferred financing changes
0
Net book value of fixed assets
298,303
Projects under development
93,282
Investments
1,000
392,585
Appliances
404
Accounts receivable and repayments
3,784
20,992
25,180
Total assets
417,765
Creditors
59,841
Due to banks
9,083
Accounts payable and accruals
0
68,924
Long-term liabilities
118,025
Total liabilities
186,949
Paid-in capital
218,750
Statutory reserve
6,554
General reserve
1,025
Investments in fair value
0
Proposed dividend
0
Reserve for foreign currency fluctuations
0
Directors
Retained profits
4,488
230,817
Total liabilities and shareholders’ equity 417,765
14.78
14.01
1999
Share price at end period (QR)
13.60
21,875
297,500
81,731
EPS (QR)
1.48
EPS adjusted to present number of issued shares (QR) 1.29
PE
9.20
BVS (QR)
10.55
PBV
1.29
Gross DPS (QR)
1.43
Gross DPS adjusted to the present
1.25
YPS (%)
10.50
2000
62,443
3,740
15,904
42,799
2001
70,474
8,033
18,386
44,055
2002 % change
79,966
13.47
16,994
111.55
17,622
-4.16
45,350
2.94
4,488
47,287
4,280
10,937
31,250
550
0
270
6,111
50,166
4,618
20,000
0
900
0
24,648
24,648
69,998
4,535
30,000
0
1,115
0
34,348
303.34
39.53
-1.80
50.00
0.00
23.89
0.00
39.35
582
444,258
0
0
0
1,000
445,840
445
701
17,125
18,271
464,111
116,405
391,380
12,881
0
0
1,000
521,666
574
705
19,310
20,562
542,228
36,640
597,815
21,630
0
0
1,840
657,925
452
10,996
20,142
31,590
689,515
-68.52
52.75
67.92
0.00
0.00
84.00
26.12
-21.25
1,459.72
4.31
53.63
27.16
0
21,007
57,134
78,141
118,000
196,141
250,000
10,834
1,025
0
0
5,841
270
267,970
464,111
0
33,178
54,753
87,931
142,272
230,203
250,000
15,452
1,025
0
20,000
0
900
24,648
312,025
542,228
0
45,675
46,732
92,407
260,265
352,672
250,000
19,987
1,025
368
30,000
0
1,115
34,348
336,843
689,515
0.00
37.67
-14.65
5.09
82.93
53.20
0.00
29.35
0.00
nm
50.00
0.00
23.89
39.35
7.95
27.16
17.12
15.97
2000
14.50
21,875
317,188
87,139
1.96
1.71
7.41
12.25
10.72
1.18
0.50
0.44
17.62
14.12
2001
16.80
25,000
420,000
115,385
1.76
1.76
9.53
12.48
12.48
1.35
0.80
0.80
18.14
2.94
13.46
-4.64
2002 31-Aug-03
29.00
45.00
25,000
25,000
725,000 1,125,000
199,176
309,066
1.81
1.81
15.99
24.81
13.47
13.47
2.15
3.34
1.20
1.20
3.45
4.76
4.14
nm: not meaningful Sources: Qatar Real Estate Investment Company; MEED Exchange rate: $1=QR 3.64
50,000
40,000
30,000
20,000
10,000
0
1999
2000
2001
2002
2.67
SERVICES
1999
2000
2001
Operating income
101,988
247,063
243,613
262,123
7.60
Operating expenses
108,533
167,833
146,953
213,310
45.16
■ Address: 3rd Floor, HSBC Building, 810 Abdulla Bin Jassim Street, PO Box
22180, Doha
■ Tel: (974) 4315500
■ Fax: (974) 4315595
■ Website: www.qship.com
Chairman
Salem Butti al-Naimi
Vice-chairman Mohammad Khalifa al-Sada
Member
Ali Sultan al-Ali al-Madeed
Member
Ali Hussein Ali al-Sada
Member
Sheikh Nasser bin Ahmed al-Thani
(representing Qatar Steel Company)
Member
Mohamed Ismail Mandani
Member
Mogbil Ali Khalifa al-Hitmi
Member
Khalifa Ali al-Hitmi
(representing Qatar Navigation)
Member
Jamal Ahmed Ismail (representing Qatar Petroleum)
Member
Mohamed Ibrahim al-Sulaiti
Member and
Nasser Saeed al-Romaihi
general manager
■ Number of issued paid-up QR 10 shares: 75,000,000
Operating profit
-6,545
79,230
96,660
48,813
-49.50
5,267
6,826
7,689
10,604
37.91
-11,812
72,404
88,971
38,209
-57.05
Finance costs
0
-24,280
-22,446
-20,383
-9.19
Interest income
0
21,013
21,317
24,967
17.12
217.33
Background
Qatar Shipping Company (QShip) was incorporated as a shareholding company
in December 1992 to own, operate and manage tankers and bulk carriers involved
in transporting oil, oil products and dry bulk commodities. The firm started operating in February 1994. QShip is 16 per cent owned by Qatar Navigation and
15 per cent by Qatar Petroleum (QP). At the end of 2002, the company owned and
operated a deep-sea fleet including seven vessels with an aggregate tonnage of
711,153 tonnes. These are four QP crude oil tankers, one clean petroleum product
tanker and two combination carriers. In 2002, it took a 25 per cent stake in three
liquefied natural gas (LNG) vessels. These are due to be delivered in January and
May 2004 and have been chartered out to RasGas II for 25 years. A further three
LNG vessels in which QShip has a stake are due to be delivered over the next 12
months. As part of an LNG development programme, QShip plans to set up a
separate LNG vessel management business.
QShip has two joint ventures. These are:
■ Qatar Mobil Tanker Company This is a 50:50 joint venture with ExxonMobil,
QP’s most important partner in oil and gas developments. The company owns
two newly-built Aframax crude oil tankers, the Ras Laffan and the Valiant. The Ras
Laffan was contracted out in a six-year deal for services in the North Sea.
■ Halul Offshore Services Company This is a 50:50 joint venture between
QShip and Qatar Navigation. It offers offshore support services and has capital of
QR 50 million ($13.7 million). In 2002, the company generated QR 20 million
($5.5 million) in profits to QShip.
Future developments include:
■ Tankers QShip is planning to place an order for two FMX oil tankers with
capacity of more than 100,000 dwt.
■ Qatar Hot Briquetted Iron Company (Qabico) QShip has an 11 per cent
stake in the firm, which handles the import of about 3 million tonnes of iron ore
into Qatar and about 1.4 million tonnes of hot briquetted iron exports. Plans for
the company are being reviewed.
■ Product carriers In January 2003, QShip took delivery of MT Alnoman, the first
in a series of three 37,000 dwt clean product/chemical tankers. The second was
delivered in April 2003. The third vessel was due to have been delivered in June
2003. In January 2002, a five-year time-charter for a liquefied petroleum gas
(LPG)/ammonia vessel was agreed with Qatar Fertiliser Company (Qafco). In May
2002, the company signed a building contract with STX Shipyard of South Korea
for an ammonia/LPG vessel to be supplied in the Qafco contract. A second carrier
to be used for spot market business is to be delivered at the end of 2004.
Investments
Performance
QShip is engaged in a process of substantially expanding its capacities in a massive investment programme. In 2001, performance was enhanced by the high rate
at which its fleet was used. The two tankers built in joint venture with ExxonMobil
generated QR 18.4 million ($5 million) in revenue in 2001. In total, vessels controlled by QShip performed a total of 126 voyages carrying 9 million tonnes of
cargo. QShip vessels also carried 8.4 million tonnes of crude oil and fuel cargoes
in the year. However, the fall in shipping rates in the second half of 2001
affected revenue and the company reported a 1.4 per cent fall in operating
income to QR 244 million ($67 million). Due to falling costs, operating profit
rose by 21 per cent. The company benefited from a strong rise in investment
income. The result was a 43 per cent rise in profits to QR 43 million
($11.8 million). The cash dividend was raised to QR 0.50 ($0.137).
In 2002, operating income rose by 7.6 per cent, but net operating profit fell by
Profit from operations
Investment income
2002 % change
0
-1,061
10,147
32,199
Bank interest received
26,103
0
0
0
0.00
Finance costs
18,593
0
0
0
0.00
Other income
1,007
4,074
5,142
5,877
14.29
Profit for the year
-3,295
72,150
103,131
80,869
-21.59
Appropriation of profit
Retained earnings at the start of the year
0
-3,295
14,860
22,433
50.96
-3,295
68,855
117,991
103,302
-12.45
Transfer to reserves
0
7,215
45,558
28,087
-38.35
0
1,780
0
3,120
nm
Proposed dividend
0
45,000
50,000
70,000
40.00
Retained earnings at the end of the year -3,295
14,860
22,433
2,095
-90.66
Appropriable profit
Assets
Current assets
236,892
301,705
431,376
843,060
95.44
Security deposits
128,695
119,708
114,605
126,600
10.47
Deferred charges
335
0
0
0
0.00
0
25,900
24,362
23,404
-3.93
Investment property
4,818
0
0
0
0.00
Property, vessels and equipment
554,819
569,837
654,945
764,082
16.66
Total assets
925,559 1,017,150 1,225,288
1,757,146
43.41
Current liabilities
126,866
64,727
189,407
108,777
-42.57
66,581
159,211
209,490
279,398
33.37
0
556
1,001
1,564
56.24
Secured notes payable
109,107
107,437
103,712
99,734
-3.84
Obligations under finance lease
109,107
109,487
105,245
116,657
10.84
Long-term liabilities
284,795
376,691
419,448
497,353
18.57
Total liabilities
411,661
441,418
608,855
606,130
-0.45
Share capital
500,000
500,000
500,000
750,000
50.00
Legal reserve
452.69
Term loan
Employees’ end of service benefit
8,657
15,872
61,430
339,517
Fair value reserve
0
0
7,570
14,404
90.28
Proposed final dividend
0
45,000
25,000
45,000
80.00
Retained earnings
-3,295
14,860
22,433
2,095
-90.66
505,362
575,732
616,433
1,151,016
86.72
Total liabilities and shareholders’ equity 917,023 1,017,150 1,225,288
1,757,146
43.41
Profit margin
-6.42
32.07
39.68
18.62
-53.07
-0.66
14.43
20.63
10.78
-47.72
-0.65
12.53
16.73
7.03
-58.01
1999
2000
2001
2002 31-Aug-03
Share price (QR)*
3.50
4.40
24.00
22.70
85.50
100,000
100,000
50,000
75,000
75,000
350,000
440,000 1,200,000
1,702,500
6,412,500
96,154
120,879
329,670
467,719
1,761,676
-0.03
0.72
2.06
1.08
EPS (QR)
PE
nm
6.10
11.64
21.05
BVS (QR)
5.05
5.76
12.33
15.35
PBV
0.69
0.76
1.95
1.48
Gross cash DPS (QR)
0.00
0.45
1.00
0.93
YPS (%)
0.00
10.23
4.17
4.11
79.29
5.57
1.09
* The shares became 100 per cent paid-up in April 2001
na: not available nm: not meaningful Sources: Qatar Shipping Company; MEED Exchange rate: $1=QR 3.64
50 per cent due to lower freight rates. Net profit for the year fell as a result by
22 per cent to QR 81 million ($22.2 million). A rights issue was completed in 2002
to raise paid-in capital to QR 75 million ($21 million). This plus borrowings are
being used to finance the expansion. As a result of these activities, the company’s
balance sheet expanded by 43 per cent in 2002.
Despite the fall in net income in 2003, confidence in QShip is high. Net profit in
the first three months of 2003 rose to QR 39.7 million ($11 million), almost three
times the level recorded in the same period of 2002. The price of QShip shares
rose to QR 85.50 ($23.50) at the end of July, almost 400 per cent above the level
recorded at the end of 2002. This gave the stock a trailing price-earnings (PE) ratio
on that date of about 50.
29
SERVICES
Qatar Telecom
■ Industrial sector: telecommunications
■ Tel: (974) 4400640
■ Fax: (974) 4830641
■ Website: www.qtel.com.qa
Chairman
Sheikh Abdulla bin Mohammad al-Thani
Vice-chairman
Sheikh Mohammed bin Suhaim al-Thani
Member
Sheikh Hamad bin Thamer al-Thani
Member
Ali bin Saad al-Kuwari
Member
Hamad bin Abdullah al-Shamsi
Member
Dr Ali bin Futais al-Merri
Member
Ali bin Sharif al-Emadi
Member
Mohamed bin Abdulla al-Qubaisi
Member
Harab bin Masaoud al-Darmaki
Member
Mohammad Isa al-Mouhanadi
■ General manager: Dr Nasser Marafih
■ Paid-in capital: QR 1,000 million ($274.7 million)
■ Auditors: Ernst & Young
Background
Qatar Telecom (Q-Tel) was established on 25 November 1998, under law
number 13 of 1987, as a joint stock company from the former Qatar Public
Telecommunications Corporation. The company has exclusive rights to provide telecommunications services in Qatar, including domestic and international fixed-line and mobile telecommunications services. It has the right to
own, operate and develop the country’s public telecommunications network
and is the most valuable company quoted on the Doha Securities Market
(DSM).
The first payphone was commissioned in 1991. Complete digitalisation of
the Qatar telephone system was completed in 1992. In 1993, Q-Tel launched
Qatar Cablevision (QCV), the national monopoly for cable television services.
The GSM mobile telephony system was opened in 1994. Internet services
were introduced in 1996. Pre-paid GSM services were launched in the summer of 2000. QCV has recently launched a new network supplying 60 television channels. Other developments have included the creation of a joint venture with Commerce One. This will open the door to the development of a
new range of services with a regional perspective. Q-Tel is a 10 per cent
shareholder in Abu Dhabi-based Thuraya Satellite Telecommunications
Company. Other investments include stakes in Sudan Telecom Company
(Sudatel), Egypt’s Orascom, Intelsat, Inmarsat and Arabsat. Q-Tel has invested $19 million in ICO Global Communications. In addition to providing services, Q-Tel is the regulatory body in telecommunications and cable. It is generally understood that eventually regulation will be split out from the firm.
The creation of Q-Tel as a joint stock firm and the sale of shares to the general public in December 1995 was followed in 1999 by the listing of Q-Tel
global depositary receipts (GDRs) on the London Stock Exchange.
The company has 11 divisions. The key revenue generators are:
■ International services In 2002, this accounted for 42 per cent of Q-Tel’s
turnover.
■ Mobile services The number of mobile subscribers increased by 50 per
cent to 266,703 in 2002.
■ National telephony There was a 5.4 per cent increase in lines to 176,519 in
the year.
■ Data services Data and internet services customers grew 43 per cent in
number in 2002.
■ Qatar Cable Vision (QCV). This comprises two systems: MMDS, which has
32 channels, and MVDS, which has 60 channels and 20 radio channels.
Q-Tel is continuing to maintain a rapid pace of product innovation. In 2002,
the company launched a range of new services including World Cup SMS,
director SMS, the new pre-paid mobile service Hala Plus and SMS for prepaid mobiles. In the course of 2002, the company invested a total of more
than QR 23.7 million ($6.5 million) in new plant and equipment.
Performance
Q-Tel is the most successful business in Qatar’s history and continues to set the
pace for the rest in its race to extend services. Total revenue rose by 12 per cent
in 2002 to a new record of QR 1,720 million ($473 million). Net profit boomed by
11 per cent to QR 956.2 million ($263 million) and Q-Tel is set to be the first
company in Qatar to reach annual profit of QR 1,000 million ($274 million). The
cash dividend for the year was lifted to 66 per cent from 60 per cent for 2001.
Q-Tel shares rose a modest 21 per cent in 2002. They closed at QR 147.50
($41) on 30 July, a third up on the year so far. This gave them a trailing priceearnings (PE) ratio at that date of 15.4. The trailing dividend yield was a substantial 4.5 per cent. The price-to-book-value (PBV) ratio was then 6.4. All
these figures suggest the price appreciation on present performance may
have reached an end.
30
Qatar Telecom
1999
International traffic revenue
672,472
National telephone system revenue
151,550
GSM services
190,281
Other services
267,036
Total revenue
1,281,339
Staff expenses
171,187
Outpayments to other international carriers 197,624
Depreciation
132,624
Operating and maintenance expense
63,487
General and administrative expense
35,940
Cost of equipment sold and other services 48,287
Total expenses
649,149
Operating profit for the year
632,190
Provision for impairment of investments
0
Provision for bad and doubtful debts
29,364
Other income
39,222
Net profit before exceptional item
642,048
Exceptional item
-18,590
Net profit
623,458
Appropriations
Retained earnings at the start of the year
0
Appropriable profit
623,458
62,346
Proposed directors’ remuneration
3,100
Proposed dividend
460,000
Distribution to the State of Qatar
0
Retained earnings at the end of the year 98,012
Assets
Property, plant and equipment
928,399
Investment securities
327,729
Current assets
979,453
Total assets
2,235,581
Net current assets
370,460
Net assets
1,605,098
Current liabilities
608,993
21,490
Total liabilities
630,483
Share capital
1,000,000
Legal reserve
62,346
Proposed dividend
460,000
Retained earnings
98,012
0
1,620,358
Profit margin
48.66
62.35
38.48
1999
100,000
5,700,000
1,565,934
EPS (QR)
6.23
PE
9.14
BVS (QR)
16.20
PBV
3.52
Gross DPS (QR)
4.60
YPS (%)
8.07
2000
666,430
160,437
255,414
241,631
1,323,912
172,695
169,595
146,538
63,763
47,327
43,113
643,031
680,881
18,207
0
61,848
724,522
0
724,522
98,012
822,534
72,452
3,100
510,000
0
236,982
2001
2002 % change
700,839 713,781
1.85
394,591 534,615
35.49
177,251 186,488
5.21
263,881 285,033
8.02
1,536,562 1,719,917
11.93
226,274 232,827
2.90
161,764 161,589
-0.11
140,714 144,000
2.34
72,014
83,450
15.88
61,759
97,031
57.11
45,380
57,901
27.59
707,905 776,798
9.73
828,657 943,119
13.81
37,180
36,901
-0.75
0
0
0.00
71,645
49,991
-30.22
863,122 956,209
10.78
0
0
0.00
863,122 956,209
10.78
236,982 409,692
1,100,104 1,365,901
86,312
95,621
4,100
4,700
600,000 660,000
0
0
409,692 605,580
72.88
24.16
10.79
14.63
10.00
0.00
47.81
916,677
357,455
1,257,137
2,531,269
629,052
1,881,780
966,259
339,109
1,626,675
2,932,043
780,098
1,998,837
1,078,254
315,899
1,968,178
3,362,331
1,043,079
2,338,551
11.59
-6.84
20.99
14.68
33.71
17.00
628,085
21,404
649,489
1,000,000
134,798
510,000
236,982
0
1,881,780
846,577 925,099
86,629
98,681
933,206 1,023,780
1,000,000 1,000,000
221,110 316,731
345,000 380,000
409,692 605,580
23,035
36,240
1,998,837 2,338,551
9.28
13.91
9.71
0.00
43.25
10.14
47.81
57.33
17.00
54.73
72.45
38.50
2000
100,000
6,000,000
1,648,352
7.25
8.28
18.82
3.19
5.10
8.50
56.17
55.60
-1.03
86.31
95.62
10.78
43.18
40.89
-5.31
2001
2002 31-Aug-03
100,000 100,000 100,000
9,000,000 10,860,000 15,540,000
2,472,527 2,983,516 4,269,231
8.63
9.56
10.43
11.36
18.00
19.99
23.39
4.50
4.64
7.77
6.00
6.60
6.67
6.08
4.25
nm: not meaningful Sources: Qatar Telecom; MEED Exchange rate: $1=QR 3.64
Outlook
Q-Tel is a dynamic and ambitious company making the most of its local monopoly and responding actively to soaring demand for mobile phone and internet
and data services. The issue that may soon face the country is that the local market will be saturated. With this in mind, Q-Tel is beginning to contemplate regional and international markets. If this strategy is adopted, it will present a new challenge to a company that has enjoyed explosive and profitable growth. For the
moment, however, it is building up its systems and services to ensure it is wellplaced to deal with possible competition which could transform the Qatari market
later this decade. All told, the company’s shares will continue to be a firm
favourite on the Doha Securities Market (DSM).
SERVICES
■ Address: 8th Floor, Salam Tower, PO Box 15224, Doha
■ Tel: (974) 4833542
■ Fax: (974) 4833576
■ Website: www.salam-int-invest.com
■ Palestinian branch address: Greentower Building, Nozha Street, PO Box
1884, Ramallah. Tel: (9702) 298 7690. Fax: (9702) 2987606.
Chairman and chief
Issa Abdel Salam Mohamed Abu Issa
executive
Vice-chairman
Hussam Abdel Salam Mohamed Abu Issa
Member
Dr Hamad Abdul Aziz al-Kuwari
Member
Khaled bin Naser Bin Abdullah al-Misnad
Member
Jamal Abdul Salam Mohammed Abu Issa
Member
Hani Abdul Qader al-Qady (representing the
Palestine Investment Bank)
Member
Mustafa Khalil Abdul Rahim Miqdady
Member
Shayif Hassan bin Sultan al-Thani
Member
Mohammed Sami Kamal Mohammed el-Shafai
Member
Nazih Ahmed Asad Ghanem
■ General manager: Dr Adnan Ali Hamed Steitieh
■ Secretary to the board: Fahmi Nimer Mohammed Ghazal
■ Number of issued shares: 24.3 million
■ Auditors: Ernst & Young
■ Subsidiaries and affiliates:
Qatar Alu Nasa, PO Box 22120, Doha. Omnix Qatar, PO Box 22119, Doha.
Salam Industries, PO Box 22120, Doha. International Trading & Contracting,
PO Box 15224, Doha. Stream Industrial, PO Box 22119, Doha. Gulf Industries,
PO Box 22028, Doha. Q Gardens, PO Box 15224, Doha. Salam Petroleum
Services, PO Box 22084, Doha. Salam Technical Services, PO Box 22119,
Doha.
UAE Atelier 21, PO Box 50797, Dubai. Salam Enterprises, PO Box 28326,
Dubai. Salam Technical Services, PO Box 91908, Dubai. Modern Decoration
Company, PO Box 10497, Dubai. Middle East Marketing, PO Box 6970, Dubai.
Background
The creation of Salam International Investment (SII) was announced by
Warren Christopher, then US secretary of state, Yasser Arafat, chairman of the
PLO, and Sheikh Hamad bin Jassem bin Jabor al-Thani, the Qatari foreign
affairs minister, at the Middle East & North Africa (MENA) conference held in
Jordan in 1995. The company was duly established in May 1998 with capital
of $50 million. Twenty per cent of the capital was initially paid-up and this
sum was later increased to 40 per cent.
The capital was then reduced to $20 million, all of it paid-up, to permit the
company’s listing on the Doha Securities Market (DSM) which stipulates that
listed companies must have at least 50 per cent of their capital paid-up. The
capital reduction was also undertaken to enable the company to carry out
capital increases when it wished. Shares in SII began trading on the DSM on
14 June 2000. SII was the first Qatari company open to foreign investors
beyond GCC countries and for that reason its shares were initially listed in
US dollars.
SII aims to be a diversified investment company. The original plan called
for it to concentrate on Palestine. Plans for activity in areas coming under
Palestinian self-government have been shattered by the collapse of the security situation in the region since September 2000. As a result, SII suspended
its activities in Palestine and is now focussing on opportunities in the Gulf.
Work has been halted on the Gaza hotel project and Salam’s stake in Aswar
Media was sold in December 2000. SII’s general manager Adnan Steitieh
moved to Doha in 2001. During Israeli incursions into self-governing
Palestinian areas and the effective re-occupation of the West Bank in 2002,
serious damage was done to the Bethlehem hotel which is not operating.
On 30 June 2002, shareholders voted for a radical change in direction for
the company. This involved merging 15 independent service and light manufacturing companies in Qatar and the UAE into SII. The capital of the company was increased to QR 243 million ($67 million) and the unit of accounting
changed to Qatari riyals. The meeting was told that capital would eventually
be raised to QR 500 million ($137 million).
The major development of 2003 was the purchase of the 17-floor Salam
Tower on the Doha corniche in a deal approved by shareholders in April. The
tower, which has been SII’s head office for several years. was valued at
QR 85 million ($23 million). SII has taken a QR 55 million ($15 million) equity stake in the building.
SII reported a net profit of QR 19.9 million ($5.5 million), giving the shares
a trailing price-earnings (PE) ratio of just over 14 on 30 July 2003.
Profit and loss (QR) 31/5/1998 - 31/12/1999
Operating income
0
Operating costs
0
Operating profits
0
Interest income from banks
3,262,073
Profits from selling shares
2,576,869
Other income
395,225
Total income
6,234,167
Provision for fall in share price
478,306
Company’s share in losses of
421,100
Aswar Media Production Company
Depreciation
0
Amortisation
0
Financing costs
791,715
Commission income
0
Other income
0
Profit before general manager’s
1,952,664
profit sharing
General manager’s profit sharing
0
1,952,664
Appropriations
Appropriable profit
na
na
Net establishment fees transferred to
na
retained earnings
Net increase in establishment fees
na
Retained earnings carried forward 1,757,398
Balance sheet (QR)
Assets
37,475,218
Due from associate companies
76,610
Other amounts due
812,018
Tradable investments
0
Accounts receivable and prepayments
0
Short-term project retentions
0
Work in progress
0
Inventories
0
Held-for-trading investments
0
38,363,846
Net fixed assets
107,298
Payments on projects
na
Held-to-maturity investments
na
na
Intangible assets
na
Available-for-sale investments
na
Long-term project retentions
na
37,445,318
Total assets
75,809,164
Liabilities
Due to banks
na
Accounts payable and accruals
na
Short-term project retentions payable
na
Advances received from customers
na
3,811,410
Long-term project retentions
na
Employee end of service benefits
na
Total liabilities
3,811,410
Paid-in capital
68,824,765
Legal reserves
195,266
Net surplus from expenses
1,220,325
allocated to establishment of company
Fair value adjustment
0
Retained earnings
1,757,398
Proposed dividends
0
Total shareholders’ equity
71,997,754
Return on end-period assets
2.58
Return on end-period shareholders’ equity 2.71
Equity/total assets
94.97
1999
Share price (QR)
na
20,000,000
na
na
EPS (QR)
0.10
PE
na
BVS (QR)
3.60
PBV
na
2000
0
0
0
2,215,391
976,294
664,578
3,856,263
546,494
0
2001
2002 % change
0 277,538,718
nm
0 216,867,328
nm
0 60,671,390
nm
0
0
0.00
0
0
0.00
0
0
0.00
0 60,671,390
nm
0
0
0.00
0
0
0.00
1,561,716 1,467,485 44,569,425
2,937.13
0
52,842 4,187,175 7,823.95
0
0 2,521,534
nm
0
6,534
881,458 13,390.33
0
0 6,910,439
nm
0 2,834,148 6,339,577
123.69
1,748,053 1,307,287 21,761,814 1,564.65
0
0 2,208,838
1,748,053 1,307,287 19,552,976
nm
1,395.69
1,757,398 1,108,519 2,304,697
3,505,451 2,415,806 21,857,673
174,805
130,729 1,955,298
na
19,620
4,896
107.91
804.78
1,395.69
-75.05
na
0
0
1,108,519 2,304,697 19,907,271
0.00
763.77
36,924,445
0
828,758
2,723,330
0
0
0
0
0
40,476,533
45,768
na
na
na
na
na
na
35,590,522
76,067,055
31,976,798 26,869,252
0
0
0
0
0
0
97,276 123,632,606
0 7,128,384
0 2,090,425
0 25,149,842
1,228,000 3,260,305
33,302,074 188,130,814
92,319 8,807,434
10,249,345 10,327,505
365,000
365,000
12,078,814 19,574,078
0 113,040,879
16,841,979 13,840,178
0 6,611,068
39,627,457 172,566,142
72,929,531 360,696,956
-15.97
0.00
0.00
0.00
nm
nm
nm
nm
165.50
464.92
nm
0.76
0.00
62.05
nm
-17.82
nm
335.47
394.58
na
0 11,963,885
na
766,519 66,161,965
na
0 5,092,362
na
0 13,806,524
1,033,209
766,519 97,024,736
na
0 1,559,597
na
0 1,644,095
1,033,209
766,519 100,228,428
70,052,625 70,155,555 241,905,000
370,071
500,800 2,456,098
0
0
0
nm
8,531.48
nm
nm
nm
nm
nm
nm
0.15
35.33
0.00
0 -798,040 -3,799,841
1,108,519 2,304,697 19,907,271
3,502,631
0
0
75,033,846 72,163,012 260,468,528
76,067,055 72,929,531 360,696,956
376.15
763.77
0.00
260.94
394.58
2.30
1.79
6.03
236.58
2.33
1.81
8.35
-22.24
98.64
98.95
72.21
0.31
2000
2001
2002 31-Aug03
2.18
0.60
12.00
11.40
20,000,000 20,000,000 24,300,000 24,300,000
43,680,000 12,000,000 291,600,000 277,020,000
12,000,000 3,296,703 80,109,890 76,104,396
0.09
0.07
0.80
24.99
9.18
14.91
14.17
3.75
3.61
10.72
0.58
0.17
1.12
1.06
nm: not meaningful na: not available Sources: Salam International Investment MEED
31
NEW LISTINGS
Industries Qatar
Chairman
HE Abdullah bin Hamad al-Attiyah, Minister of Energy
Member
HE Yousef Hussain Kamal, Minister of Finance
Member
Abdullah Hussain Salatt, chairman, Qatar Fertiliser Company (Qafco)
Member
Dr Ibrahim al-Ibrahim, vice-chairman, RasGas
Member
Faisal Mohammed al-Suwaidi, managing director and vice-chairman, Qatargas
Member
Hamad Rashid al-Mohannadi, general manager, Qatar Petrochemical Company (Qapco)
Member
Fahad Hamad al-Mohannadi, general manager, Qatar Electricity & Water Company
■ Paid-in capital: QR 5,000 million ($1,374 million)
■ Number of issued QR 10 shares: 500 million
Industries Qatar (IQ) was listed on the Doha Securities Market (DSM) on 3 August 2003. The company was established on 19 April 2003 with a paid-in capital of
QR 5,000 million ($1,374 million). It comprises major manufacturing industries previously owned by the state. These are Qatar Petrochemical Company (Qapco),
Qatar Fertiliser Company (Qafco), Qatar Fuel Additives Company (Qafac) and Qatar Steel Company (QSC).
A total of 150 million shares with a par value of QR 10 ($2.70) were offered in an initial public offering (IPO) at a price of QR 16 ($4.40) a share. The IPO closed
on 8 June and was heavily oversubscribed. The enthusiasm for the stock was justified in initial trading on the DSM and shares in IQ closed at more than QR 74
($20) on 6 August. The profits of the companies that make up IQ recorded a combined net profit of QR 434 million ($119 million), giving the stock a trailing
price-earnings (PE) ratio on that date of more than 80.
Qatar Fuel Company
■ Address: Alkhlafat Aljadeda, PO Box 7777, Doha
■ Tel: (974) 4491410
■ Fax: (974) 4491294
Chairman
HE Abdullah bin Hamad al-Attiyah
Vice-chairman
Mohammed Turki al-Sobai
Member
Hussain Mohammed al-Esshag
Member
Nasser Mubarak al-Ali
Member
Mohammed Abdulwahed al-Hammadi
Member
Adbulhadi al-Shahwani
Member
Sheikh Ali bin Nasser al-Ahmmad al-Thani
Background
Qatar Fuel Company (Woqod) was established on 10 February 2002 as a public shareholding company with capital of QR 300 million ($82.4 million). Qatar
Petroleum (QP) owns 40 per cent of the company's stock. It has various activities including marketing and selling oil, gas and petroleum derivatives and trading
in gas cylinders and other fuel products.
■
■
■
■
■
■
Market capitalisation on 31 August 2003: QR 383 million ($105 million)
Chairman: Sheikh Mohamed bin Fahad al-Thani
Managing director: Hassan Ali bin Ali
Paid-in capital: QR 40 million ($11 million)
Number of issued QR 10 shares: 4,000,000
Share price on 31 August 2003: QR 95.80
Background
Qatar Technical Inspection Company (QTIC) was founded in 1997 and listed on the Doha Securities Market (DSM) on 7 June 2003 following a successful initial public
offering (IPO) of 22 million shares, equivalent to 55 per cent of its capital. The company has a 10-year monopoly over technical inspection of vehicles in Qatar. The
company has quickly announced plans to extend services. The inspection of cars and light vehicles was launched at the City Centre shopping complex in June. QTIC
plans to offer, in the near future, similar testing facilities at other major commercial complexes. New testing centres for heavy vehicles are also being planned.
■
■
■
■
■
■
■
■
■
Market capitalisation on 31 August 2003: QR 1,570 million ($431 million)
Address: PO Box 7256, Doha
Tel: (9714) 4361542
Fax: (9714) 4355219
Chief executive: Hussain al-Fardan
Paid-in capital: QR 500 million ($137 million)
Number of issued QR 10 shares: 50,000,000
Share price on 31 August 2003: QR 31.40
Background
United Development Company (UDC) was founded in 1999 and listed on the Doha Securities Market (DSM) in June 2003. It specialises in activities in power, water, manufacturing, refined product derivatives, real estate and trading. Its first project will be the development of a world-scale 500,000-tonne-a-year aluminium plant in Qatar.
32

QNB Investor 2003

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