Arab Palestinian Investment Company Reports Financial Results
Arab Palestinian Investment Company (NASDAQ: APIC) has recently shared its preliminary financial results for the year. The company's net profits attributed to its shareholders reached USD 9 million, despite the tumultuous circumstances throughout the year.
Overview of Financial Performance
The company announced that total revenues for the year amounted to USD 1.12 billion, reflecting a 6% decline compared to the previous year. EBITDA stood at USD 68.4 million, also marking a downturn of 6%. The net profits for the entire group fell to USD 8 million, revealing a significant reduction of 57% from earlier profits. This decline in earnings per share was also observed, dropping to USD 0.073, indicating a 49% reduction on a year-on-year basis.
Asset Growth Amidst Challenges
Despite the declines in profits and revenues, total assets experienced a positive growth trajectory, increasing to USD 842 million, which is a 5.5% rise over the prior year. Furthermore, net equity attributed to shareholders saw a rise of 2.4%, totaling USD 189 million.
Reasons Behind Declining Profits
Chairman and CEO Tarek Aggad shared that 2024 posed numerous challenges for the company. The repercussions from the regional conflicts and restrictions on commercial activity significantly impacted business operations. Closures in various cities and limited movement of goods and people contributed to the downtrend. The company faced unexpected delays in clearing essential equipment and goods, ultimately increasing operational costs.
Impact on Subsidiaries and Operations
In his statement, Aggad noted that the Palestinian Authority's mounting debts to company subsidiaries reached about USD 107 million. This overwhelming debt particularly strained Medical Supplies and Services Company (MSS) as they struggled to meet tenders, particularly those intended for the Gaza region. Additionally, National Aluminum and Profiles Company (NAPCO) saw a devastating 60% decrease in business activity. Demand for vehicles also experienced a significant slump, dropping similarly by nearly 60% in 2024, negatively affecting sales at Palestine Automobile Company.
Community Support and Commitment
Aggad emphasized the company's commitment to its community despite the challenges faced. In 2024, Arab Palestinian Investment Company allocated USD 1.6 million towards social responsibility initiatives, supporting various organizations that assist orphans, individuals with special needs, and promote mental health and education.
Looking Ahead
The financial landscape poses significant hurdles, but the company remains optimistic about the future. Aggad highlighted that the group continues to navigate the difficulties presented by increasing financing costs, which saw an additional USD 4 million expenditure due to rising global interest rates. Moreover, the company faced accounting adjustments related to hyperinflation in Turkey, which impacted financial reporting by approximately USD 5 million.
Frequently Asked Questions
What was the profit reported by Arab Palestinian Investment Company in 2024?
The net profit attributed to shareholders reached USD 9 million in 2024.
How did total revenues change compared to the previous year?
In 2024, total revenues fell by 6% to USD 1.12 billion compared to 2023.
What factors contributed to the declining profits?
The decline in profits was primarily due to regional conflicts, restrictions on movement, and increasing operational costs.
How much did the company allocate towards social responsibility?
The company dedicated USD 1.6 million to various social responsibility initiatives in 2024.
What challenges did the subsidiaries face during the year?
Subsidiaries were affected by increased debt, reduced demand in key sectors, and delays in government tenders, particularly in the medical sector.
