Mezzan Holding: Principal Activities and Financial Performance Review

Mezzan Holding: Investment Banking Paper
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Introduction
Established in the 1940s and later reconstituted in 1999 within the existing holding framework, Mezzan Holding currently maintains a registered capital of KWD 31.13 million. Mezzan Holding has established a comprehensive operational presence across the Middle East region. Along with agency brands, notable legacy brands encompassing Al Wazzan, KITCO, Khazan, and KSPICO have garnered considerable brand recognition, fostered patronage, secured extensive market infiltration, and achieved broad market coverage. As a vertically integrated entity, Mezzan Holding engages in multifaceted business activities spanning manufacturing, distribution, retail, wholesale, and contract services. Underpinning its operations are two primary business divisions: the Food Business Line and the Healthcare & Consumer Business Line. Each division contributes to the company's overall revenue and net profit through a network of 30 vertically integrated enterprises.
Principal Activities
Engaging in various pivotal activities, Mezzan owns stakes and shares in Kuwaiti and non-Kuwaiti enterprises. It extends its involvement to encompass holdings in Kuwaiti or non-Kuwaiti limited liability entities, actively contributing to their establishment, management, and financial support. Additionally, Mezzan assumes the role of a guarantor for these entities. The company further extends financial assistance to entities holding shares and provides third-party guarantees when Mezzan's ownership stake exceeds 20% of the borrowing company's capital (Mezzan Holding Co., 2023a). Moreover, Mezzan's endeavors encompass the ownership of industrial assets, including patents, industrial trademarks, royalties, and related rights. These valuable assets are either franchised to other entities or utilized within and beyond Kuwait's borders. In alignment with legal parameters, Mezzan also owns real estate and movable assets to facilitate its operations.
Financial Performance Review
2021, Q3
The Q3 of 2021 witnessed a reduction of 4.8% in revenue, totaling KD 57.2 million; however, there was a commendable growth of 6.9% in net profit for parent company shareholders, amounting to KD 2.3 million. Over the year, revenue aggregated to KD 191.2 million, indicative of a 1.6% contraction. Alongside this, respective declines of 11.1% and 8.4% in operating profit and EBITDA. Noteworthy was the 7.2% decrease in net profit for parent company shareholders, settling at KD 9.5 million over the nine months (Market Screener, 2023). Despite industry-specific challenges, Mezzan Holding exhibited a remarkable capacity for adaptation and an unwavering commitment to enhancing well-recognized brands, yielding promising outcomes. These results, characterized by revenue exceeding 2019, underscore the strategic focus on long-term growth in tandem with addressing dynamic market conditions and elevating consumer experiences across diverse markets and business segments.
2022, Q2
Mezzan Holding, a prominent Gulf-based manufacturer and distributor of food, beverage, FMCG, and pharmaceutical products, has unveiled its H1 2022 financial results. The first half of...