‘We expect core companies to rebound once people get accustomed to new circumstances’ says company’s Vice Chairman
KIPCO – the Kuwait Projects Company (Holding) – has announced a net profit of KD 11 million (US$ 35.7 million) for the first six months of 2020, a drop of 19 per cent compared to the KD 13.58 million (US$ 44 million) originally reported for the same period last year.
The company’s 2019 financials were restated due to a change in the classification of OSN after an increase in ownership.
The impact of the COVID-19 pandemic on the Group’s core businesses was evident during the second quarter, due to the effect of the lockdown on operations. KIPCO reported a loss of KD 17.8 million (US$ 57.8 million) in the second quarter (the three months ended June 30, 2020), as a consequence of the situation that the local and international business communities are facing.
The company’s consolidated assets stood at KD 10.3 billion (US$ 33.5 billion), which is equal to the reported balance at year-end 2019.
Stock markets around the world suffered from the negative impact of the pandemic, together with the sharp drop in oil prices due to lack of demand and high levels of uncertainty. With lockdown procedures and stay at home rules, the supply chain was hit hard by low consumption levels. COVID-19 heavily affected sectors like hospitality, real estate and banking. Other Group companies operating in the insurance, food and media sectors showed more resilience to the pandemic.
Mr Faisal Al Ayyar, KIPCO’s Vice Chairman (Executive), said:
“Nobody could have foreseen the circumstances we witnessed during the past six months. We continue to assess the impact of the COVID-19 pandemic on our different business sectors and how this will reflect on our operations for the remainder of the year and beyond. We expect our core companies to rebound once people get accustomed to the new circumstances. However, we remain cautious given market volatility, lack of clarity regarding regulatory directives, restrictions on travel and mobility and the fluctuating price of oil.”