ACICO sees a 12% increase in gross profit from, and net operating profit up 35% to KD 7.0mln in 2024
Kuwait: ACICO Group today announced its financial results for the fiscal year ended December 31, 2024, demonstrating resilient operational performance amidst ongoing strategic financial restructuring aimed at enhancing long-term profitability and sustainable growth.
The Group maintained strong operational results, with gross profit from operations reaching KD 20.9 million in 2024, compared to KD 18.7 million in 2023, excluding the effect of changes in the fair value of investment properties. This represents a 12% year-on-year growth in gross profit, despite a decline in operating revenue, highlighting improved operational efficiency.
Net operating profit reached KD 7.0 million in 2024, up from KD 5.2 million in 2023, excluding the effect of changes in the fair value of investment properties, representing a 35% year-on-year growth.
By the end of the year, ACICO reported a net loss of KD 11 million for 2024, compared to a net loss of KD 6 million in 2023, primarily due to a goodwill impairment of KD 4.5 million.
Commenting on the results, Group Chairman Mr. Emad Abdullah Al-Issa stated:
'ACICO Group continues its journey toward sustainable growth and stronger positioning in its sectors of operations in both local and regional markets. This is made possible by a clear restructuring strategy and significant improvements in operational efficiency. The efforts initiated by the Board of Directors in early 2023 have already resulted in notable gains, enabling the company to meet its obligations, explore new markets and expand into new sectors.
'We are now focused on product and service innovation, serving individuals, companies and government entities, while investing in our integrated construction and industrial solutions to support national development projects.'
Al-Issa reaffirmed the Group's commitment to working closely with financial institutions to complete the remaining phases of the financial restructuring plan, after successfully settling several major debts during 2024. These efforts enhance the company's flexibility in debt servicing, strengthen its financial stability, and align with its vision of long-term profitability and stakeholder value protection.
He added: 'ACICO's success in improving operating profitability and increasing market share places it in a strong competitive position. We remain committed to delivering on the promises made to our shareholders and safeguarding ACICO's legacy as a leader in the building materials sector across Kuwait and the wider GCC region. These achievements form a solid foundation for continued growth and expansion.'
Debt Settlements and Financial Restructuring
As part of the Group's financial restructuring strategy, key agreements were concluded and finalized in 2024:
Debt Settlement #1: An agreement with a creditor bank to settle all outstanding debt by paying 65% of the total amount (principal, interest and fees), equivalent to KD 3.7 million, while being released from the remaining 35%.
Debt Settlement #2: An agreement to settle outstanding debt KD 35.8 million in full through the sale of a company-owned asset, generating a profit of KD 2.4 million.
These settlements reinforce the success of the Group's restructuring strategy and its commitment to stakeholder value creation.
Strengthening Financial Position
Total assets amounted to KD 315 million as of December 31, 2024, compared to KD 358 million in 2023. The decline in total assets reflects a strategic realignment of assets and prudent capital management, including the exit of certain assets and debt settlements as part of the ongoing debt restructuring program.
Total equity declined to KD 27.8 million in 2024 from KD 38.5 million in 2023, impacted by the year's net loss including impairment of Goodwill but still ensuring financial stability and flexibility.
Operational Performance Highlights
The Group executed supply, installation, and construction work across multiple major development projects that advanced into execution during the year. ACICO also signed new contracts for turnkey home construction in Kuwait, particularly in emerging residential areas, highlighting its robust capabilities and market leadership.
Construction and Industrial Projects
Gross profit improved by 12% in the Industrial and Construction sectors with a successful implementation of cost optimization strategies.
Industrial sales remained solid at KD 66.6 million, compared to KD 68.2 million in 2023, despite challenging market conditions.
Cost of goods sold in the Industrial sector decreased to KD 54.3 million from KD 57.2 million in the prior year, underscoring ongoing improvements in operational efficiency.
Real Estate Sector
The Group's real estate sector demonstrated strong performance, increasing net profit to KD 8.5 million in 2024 from KD 7.7 million in 2023. This growth reflects sustained demand and strategic management within the sector.
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