Al Mahhar Holding Company, which is one of the leading service and specialised products providers to the energy and infrastructure sectors in Qatar, achieved robust revenue growth of 19.7%, reaching QR683.2mn in 2023, up from QR570.9mn in 2022.
This significant growth was primarily fuelled by Al Mahhar’s energy sector servicing subsidiary, Petrotec, and its portfolio companies, which accounted for approximately 88% of the 2023 revenue.
The infrastructure sector servicing segment, comprising QFAB, Koop Water Management, Al Mahhar Kuwait, and European Equipment Co., also made a meaningful contribution, accounting for 12% of the total revenue in 2023.
The strong revenue contribution of the energy sector servicing segment is underpinned by Al Mahhar’s strategy to capitalise on in-country value in Qatar, and its success in capturing emerging opportunities in the energy sector in the country.
The strong segmental performance was highly supported by the joint contribution of all its energy segment business units to the growth in products and services.
The positive performance of the energy sector was supported by various proactive business initiatives undertaken by Al Mahhar in 2023, including the launch of Petrotec’s explosion-proof products assembly facility in March 2023 in collaboration with R. STAHL Group, which paved the way for a 45% increase in bookings for locally made products.
The lower revenue contribution of the infrastructure segment was mainly attributable to an overall sector slowdown and accounts receivable challenges during the financial year 2023.
Al Mahhar said it has enacted strategic measures for a sustainable recovery in 2024, including scaling down infrastructure operations with refocus on selective, value-accretive opportunities in energy-related construction projects, as well as enhancing efficiencies to align with reduced revenue forecasts, anticipating breaking even and potentially achieving a modest segmental net profit during 2024.
Al Mahhar’s net profit to equity holders increased by 38.5% YoY to QR28.2mn (QR0.14 earnings per share) for 2023, from a net profit to equity holders of QR20.3 million in 2022.
Due to the improvement of operational efficiencies and increased profit attributed to non-controlling interests, this translated into a net profit margin growth from 3.6% in 2022 to 4.1% in 2023.
Due to the company’s prudent financial and risk management approach, Al Mahhar continues to be in a strong financial position, with its balance sheet showing a total equity of QR341.7mn.
Notably, the company has achieved a significant reduction in its bank debt, which now stands at QR27.7mn, marking a substantial decrease of 34.8% compared to 2022.
This strategic debt reduction, along with a strong generation of operating cash flows – witnessing a strong increase of 47.5% from QR21.5mn in 2022 to QR31.7mn in 2023 – firmly positions Al Mahhar on a path to sustainable growth.
Evaluating the evolving economic landscape in Qatar, Al Mahhar views the forthcoming significant developments and opportunities in the Qatari energy sector with optimism.
The North Field Expansion in Qatar, recognised as the world’s largest non-associated gas field, presents strong opportunities for additional growth.
This expansion is critical for the Qatari oil and gas industry and offers substantial avenues for companies that are well positioned to deliver specialised services to the energy sector, and management deems Al Mahhar to be well positioned.
Additionally, the anticipated Ras Laffan Petrochemicals Complex, set to commence operations by 2026 and projected to be among the Middle East’s largest facilities of its kind, provides additional opportunities for collaboration. These major undertakings present additional revenue potential, especially as Al Mahhar, through its subsidiary Petrotec and its portfolio companies, engages in active bids to deliver a spectrum of products and services, encompassing project initiation to long-term maintenance services.
Positioned strategically, Al Mahhar’s management expects and is working towards capitalising in-country value and to capture emerging opportunities in Qatar’s energy sector.
Alongside these two major projects, the company anticipates contributing to further in-country projects that Management deems value-accretive for the business, such as Qafco VII, the industry’s first world-scale blue ammonia project, expected to open opportunities in the renewables market, as well as Qapco’s planned PVC plant, the first of its kind in Qatar, creating more long-term product and service opportunities for Al Mahhar.
Moreover, Al Mahhar’s management is continuously assessing internal efficiencies and cost optimisation initiatives while at the same time diligently evaluating further strategic projects for Al Mahhar and its portfolio companies.
Based on the strong results achieved, Al Mahhar’s Board of Directors has decided to recommend to the annual general assembly an annual dividend to shareholders equivalent to 10% of Al Mahhar’s nominal share value amounting to QR20.7mn (QR0.1 per share).
Commenting on the company’s strong financial performance and its future trajectory, Fahad Alfardan, chairman of Al Mahhar Holding Company remarked, “This year, Al Mahhar delivered strong financial achievements that underscore its resilience and strategic approach. Al Mahhar’s forward-thinking strategy and foresight lay the foundation for seizing the emerging opportunities in the Qatari energy sector. In the midst of today’s evolving market dynamics, our core mission remains steadfast: to drive Al Mahhar’s expansion by focusing on high-value projects that enhance our business and increase shareholder value.
“We are committed to maintaining this momentum, leveraging our resources and expertise to navigate future challenges and capitalise on new opportunities.”
