Kuwait March 29, 2017: Kuwait-based supermarket chain The Sultan Center (TSC) announced today the launch of a major transformation strategy on the back of its earnings announcement. The company reported today an EBITDA of KD7.0 million for 2016, slightly up from last year by 0.8% and an underlying net profit of KD1.2 million, making 2016 TSC’s fourth consecutive year of profitability at operational and underlying levels.
The strategy is being implemented by a new management team with proven retail experience and a track record of delivery, governed by a new Board of Directors with extensive local and international experience in turn-around plans, restructuring, financial matters, and governance.
TSC Chairman Doctor Abdel Aziz Sultan said, “TSC is a business that was a pioneer in the retail consumer market and thrived under the leadership of my predecessors over a 40 year period. It is a business that has consistently elevated the household shopping experience in Kuwait while becoming a respected and trusted brand. During the invasion of the country in 1990, TSC remained open and continued to serve the needs of its customers under the most challenging circumstances imaginable. In recent years our business model has evolved to include activities that are not core to our retail mission and this diversification has negatively impacted our relationships with our suppliers, shareholders, and other stakeholders who are our most valuable assets. We intend to strengthen these relationships by refocusing TSC on its core retail mission. In view of the above, the board and management have approved a wide ranging transformation plan “Kuwait Retail First” that aims to restore TSC’s market leadership.”
The execution of the TSC Kuwait Retail First strategy will take from 12 to 24 months. To ensure its progress and success and to preserve a fair, orderly, and informed market that safeguards the interests of our shareholders, and avoids abnormal speculation in the share price, the company has taken the following voluntary steps:
- The company has voluntarily requested from the Capital Markets Authority (CMA) the suspension of trading of its stock to shield investors from fluctuations that may arise from unfounded rumors and speculation during the first phase of this transformation. The company strongly believes this is in the best interest of all our shareholders, especially minority shareholders, and will avoid abnormal fluctuation in the share price that could result from the asset restructuring component of strategy.
- The company has taken voluntary provisions and impairments totaling 3 million, reflected in the company’s 2016 financial statements and contributing to the company. Financial performance results are positive at operational level.
2016 Financial Results Highlights:
- Operating Revenue: KD275.5 million, down 3.1% 2015
- EBITDA: 0 million, up 0.8% from 2015
- Underlying Net Profit*: KD1.2 million
- Net loss: KD 24 million
*Underlying net profit excludes one-off restructuring provisions and impairments of KD25.3 million. The negative earnings are a result of certain provisions which reflect prudent and conservative approach that the new board and the new management is adopting.