To the Shareholders
I am pleased for myself and on behalf of my fellow members of the Board to welcome you at our 29th Annual General Meeting to discuss the annual report of United Industries Co. for the financial year ended on 31st December 2007, to highlight the most significant features of this period. It is also an opportunity to review the most notable developments witnessed by the Company during the year, in addition to having a look at the results and achievements made during the year.
Initially, I would like to announce that UIC’s performance during the year was a record and unprecedented one, when compared to all the results achieved by the Company during the last 29 years since its inception in 1979.
2007 was certainly a year of qualitative transformation in the Company’s performance in terms of the structural change witnessed in the composition of subsidiary companies comprised in UIC and the positive development witnessed by the Company’s internal departments. This is a reflection of the Company’s ability to set down its investment plans and programmes and consequently developing the necessary policies for realizing the objectives of such plans and monitoring their implementation.
Constant and Continuous Growth
Structural Changes
The management’s efforts, which began two years ago to boost the restructuring of its investments and to access new investment sectors that are in line with its business strategy, culminated in successfully completing a business deal by all investment standards. The Company sold off its 40% equity in United Fisheries of Kuwait during the first quarter of 2007, making a net profit of KD18,727,985.
• In a bid to strengthen UIC’s portfolio, the management acquired a controlling equity in Saudi Dairy and Foodstuff Co. (SADAFCO) which when added to its previous equity raised UIC’s shareholding in SADAFCO’s capital to 40.13% by the end of 2007.
• The Company acquired a 25% stake in Al Khurayef Commercial Company, whose main activities are concentrated in the business of sale, maintenance and repair of oil equipment. It is a market leader and is a member of Al Khurayef Group of Saudi Arabia.
• The company successfully acquired a 15% equity in Al-Qurain Petrochemical Co., a leading firm engaged in the petrochemical industry in Kuwait.
Strategy: Five-year Three Dimensional Plan
During 2007, the management completed a comprehensive strategic plan designed to define its business directions and policies during the next five years. The new plan stems from focusing the Company’s investment base upon three key sectors using three specific directions, with a view to achieving the ultimate result of tripling the Company’s profits upon the completion of the new plan implementation.
Excellent Financial Results:
For the 2007 financial results, I am pleased to announce to you that the Company achieved a net profit of KD27.94 million, with earning per share soaring to 120.65 Fils, or a 310% growth compared with 2006 results.
During the year, UIC made significant operating profits totaling KD8.25 million that are added to the exceptional net profit realized from the sale of investments in subsidiaries led by United Fisheries Kuwait for a sum of KD20.36 million.
Directors’ Recommendation and Distributions:
In view of the financial results achieved in 2007, the Board of Directors is pleased to recommend to your General Meeting the distribution of bonus shares at the rate of 5%, or 5 shares for each 100 shares in addition to the payment of dividends at the rate of 35% of the paid-up capital, or 35 fils per share for the shareholders registered in the company’s records on the date of the General Meeting, subject to the approval of the concerned authorities and the Company’s General Meeting.
It should be noted that in spite of the substantial profits achieved during the year, the management looks forward to utilizing the cash surplus for providing the liquidity needed for implementing a number of ambitious investment projects during the next few years. This initiative will represent a qualitative transformation in the Company’s history and will seek to enrich its investment portfolio in order to optimize the shareholders’ returns as much as possible. For this purpose, the Company has sought to strike a balance between the annual distributions to its shareholders and making available the cash liquidity required to finance the strategic plan.
Appreciation:
Once again, we would like to express our gratitude to our Shareholders for their continuous confidence and support for our plans designed to achieve the best possible results, hoping for further success in the future. We have every confidence that we will continue our positive contribution to the country’s economic development and growth.
We look forward to further achievements for the good of our country and the Company and we are determined to achieve all your objectives in the future.
Sheikh Khalifa Abdulla Al Jaber Al Sabah
Chairman
