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Makkah & Madinah Holdings (MAMP)

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Wednesday 30 September, 2015

Makkah & Madinah Holdings

Interim Results to 30 June 2015

CHAIRMAN’S INTERIM STATEMENT

MAKKAH & MADINAH HOLDINGS LIMITED

(“MMH” or the “Company”)

I am pleased to present MMH’s financial results for the first half of 2015. The condensed, consolidated interim financial information which follows is unaudited and has not been reviewed.

Financial Results

The results for the first half of the current year continue the positive trend seen previously. Comprehensive income for the six months’ period ended 30 June 2015 was USD 10.91 million (H1, 2014: USD 12.76 million) and the net profit was USD 9.61 million (H1, 2014: USD 9.34 million), giving rise to diluted earnings per share of 0.8 US cents (H1, 2014: 0.7 US cents). This profit derived mainly from a USD 9.53 million contribution attributable to MMH’s associate company, Makkah & Madinah Commercial Investment Company JSC (“MMCI”), of which the Company owns 34.12%. Other comprehensive income consisted of USD 1.30 million, which represented the Company’s share of fair value change in MMCI’s available for sale investment.

The increase in the value of MMH’s investment in MMCI by 2.5 percent to USD 497.62 million (H1, 2014: USD 485.39 million) resulted in net assets standing at the end of the period at USD 497.77 million (H1, 2014: USD 485.12 million); or US cents 39 per share (H1, 2014: US cents 38 per share).

There have been no significant post- balance sheet events to report and trading to date remains consistent with the Directors’ expectations.

Khaled Al-Husseini,
Chairman,
Dubai, 29 September 2015

Important: the Notes numbered 1 to 9 which appear after the condensed, consolidated statement of cash flows below are an integral part of the condensed, consolidated interim financial information, which should be read in the context of these Notes.

Condensed, consolidated statement of profit or loss and other comprehensive income
for the six months’ period ended 30 June 2015

Note Six months’
period ended
30 June 2015
(unaudited)
Six months’
period ended
30 June 2014
(unaudited)
Year ended 31 December
2014
(audited)
USD USD USD
Revenue 8 750,000 1,000,000 2,000,000
Employee costs (467,754) (534,441) (1,002,038)
Other operating expenses (79,450) (69,280) (138,474)
Legal and professional expenses (115,438) (220,414) (356,180)
Depreciation (3,882) (3,882) (7,829)
Operating profit 83,476 171,983 495,479
Share of profit from an associate 6 9,529,159 9,178,194 7,616,312
Finance expense (2,157) (13,895) (1,342)
Profit for the period 9,610,478 9,336,282 8,110,449
Other comprehensive income
Items that are or may be reclassified subsequently to the consolidated profit or loss
Share of fair value change in available for sale investment held by an associate 6
1,302,562

3,427,524

6,387,181
Total comprehensive income for the period 10,913,040 12,763,806 14,497,630

   

Earnings per share attributable to the equity holders of the parent during the period
Basic earnings per share for the period 5 0.008 0.007 0.0064
Diluted earnings per share for the period 5 0.008 0.007 0.0064

Condensed, consolidated statement of financial position
as at 30 June 2015

Note 30 June
2015
(unaudited)
30 June
2014
(unaudited)
31 December
2014
(audited)
USD USD USD
ASSETS
Non-current assets
Investment in an associate 6 497,623,559 485,394,063 486,791,838
Property and equipment 12,930 20,759 16,812
497,636,489 485,414,822 486,808,650
Current assets
Trade receivables 8 677,255 428,100 521,284
Prepayments, advances and other receivables
760,950

798,558

767,841
Cash and cash equivalents 69,507 62,631 268,945
1,507,712 1,289,289 1,558,070
Total assets 499,144,201 486,704,111 488,366,720
EQUITY
Share capital 7 10,226,655 10,226,655 10,226,655
Share premium 7 395,146,685 395,146,685 395,146,685
Available for sale fair valuation reserve 25,256,483 20,994,264 23,953,921
Retained earnings 67,142,647 58,758,002 57,532,169
497,772,470 485,125,606 486,859,430
LIABILITIES
Non-current liabilities
Provision for employees’ end of service benefits
129,010

128,208

118,573
129,010 128,208 118,573
Current liabilities
Trade and other payables 1,242,721 1,450,297 1,388,717
1,242,721 1,450,297 1,388,717
Total liabilities 1,371,731 1,578,505 1,507,290
Total equity and liabilities 499,144,201 486,704,111 488,366,720

Condensed, consolidated statement of changes in equity
for the six months’ period ended 30 June 2015



Share
capital


Share premium

Reverse acquisition reserve
Available for sale fair valuation reserve

Retained
earnings



Total
USD USD USD USD USD USD
At 1 January 2014 (audited) 10,226,655 395,146,685 1,636,894 17,566,740 47,784,826 472,361,800
Total comprehensive income for the period
Profit for the period - - - - 9,336,282 9,336,282
Other comprehensive income for the period - - - 3,427,524 - 3,427,524
Other movement
Transferred to retained earnings - - (1,636,894) - 1,636,894 -
Balance at 30 June 2014 (unaudited) 10,226,655 395,146,685 - 20,994,264 58,758,002 485,125,606
At 1 January 2015 (audited) 10,226,655 395,146,685 - 23,953,921 57,532,169 486,859,430
Total comprehensive income for the period
Profit for the period - - - - 9,610,478 9,610,478
Other comprehensive income for the period - - - 1,302,562 - 1,302,562
Balance at 30 June 2015 (unaudited) 10,226,655 395,146,685 - 25,256,483 67,142,647 497,772,470

Condensed, consolidated statement of cash flows
for the six months’ period ended 30 June 2015

Six months’ period ended 30 June 2015 (unaudited) Six months’ period ended
30 June 2014 (unaudited)
Year ended
31 December 2014
(audited)
USD USD USD
Operating activities
Profit for the period 9,610,478 9,336,282 8,110,449
Adjustments for:
Share of profit from an associate (9,529,159) (9,178,194) (7,616,312)
Depreciation 3,882 3,882 7,829
Provision for employees’ end of service benefits
10,437


20,749
Working capital changes:
Trade and other receivables (149,080) (231,561) (294,028)
Trade and other payables (145,996) (207,912) (297,252)
Employees’ end of service benefits paid - - (2,624)
Net cash used in operating activities (199,438) (277,503) (71,189)
Net decrease in cash and cash equivalents (199,438) (277,503) (71,189)
Cash and cash equivalents at beginning of the period
268,945

340,134

340,134
Cash and cash equivalents at end of the period
69,507

62,631

268,945

Notes to the condensed, consolidated interim financial information
for the six months’ period ended 30 June 2015

1.      Legal status and activity

Makkah & Madinah Holdings Limited (“the Company”) was incorporated on 29 May 2007 under the International Business Companies Act, 2000, in the Commonwealth of the Bahamas under registration number 148728 (B).

The registered office address of the Company is Ocean Centre, East Bay Street, P.O. Box SS19084, Nassau, Bahamas.

The condensed, consolidated interim financial information of the Company for the period ended 30 June 2015 comprises the Company and its subsidiaries (collectively referred to as “the Group”). There has been no change in the Group structure since the date of most recent annual consolidated financial statements for the year ended 31 December 2014.

The principal activities of the Group are property and real estate investments, development and advisory services for projects related to the real estate and infrastructure sectors.

2.      Basis of preparation

The condensed, consolidated interim financial information for the six months ended 30 June 2015 has been prepared in accordance with IAS 34, ‘Interim Financial Reporting’. The condensed, consolidated interim financial information should be read in conjunction with the annual consolidated financial statements for the year ended 31 December 2014, which have been prepared in accordance with International Financial Reporting Standards.

3.      Estimates and assumptions

The preparation of condensed, consolidated interim financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

In preparing the condensed, consolidated interim financial information, the significant judgements made by the management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that were applied to the consolidated financial statements for the year ended 31 December 2014.

4.      Significant accounting policies

The accounting policies adopted in the preparation of the condensed, consolidated interim financial information are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended 31 December 2014.

5.      Earnings per share

a)     Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the parent by the weighted average number of ordinary shares in issue during the period.

30 June
2015
30 June
2014
31 December
2014
(unaudited) (unaudited) (audited)
Profit attributable to equity holders of the parent  (USD)
9,610,478

9,336,282

8,110,449
Weighted average number of ordinary shares in issue (No.)
1,268,049,125

1,268,049,125

1,268,049,125

b)   Diluted earnings per share

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding by the estimated conversion of all dilutive instruments. The Company has two categories of potentially dilutive instruments: share warrants and share options. For the share warrants and share options, a calculation is performed to determine the estimated number of shares that could have been acquired at a pre-determined price. The number of shares calculated as above, is compared with the number of share that would have been issued assuming the exercise of the share warrants and share options.

30 June
2015
30 June
2014
31 December
2014
(unaudited) (unaudited) (audited)
Profit attributable to equity holders of the parent  (USD)
9,610,478

9,336,282

8,110,449
Weighted average number of ordinary shares in issue (No.)
1,268,049,125

1,268,049,125

1,268,049,125
Adjustments for:
Assumed conversion of share warrants (refer note (i) below)


Weighted average number of ordinary shares for diluted earnings per share
1,268,049,125

1,268,049,125

1,268,049,125

(i)   All share warrants outstanding at the reporting date are excluded from the diluted weighted average number of ordinary shares calculation because their effect would have been anti-dilutive.

6.     Investment in an associate

Name Country of     incorporation Proportion of voting
rights held at
30 June
 2015
31 December
2014
Makkah & Madinah Commercial Investment Company (MMCI) Kingdom of
Saudi Arabia

34.121 %

34.121 %

The Group’s investment in associate accounted for on the equity basis is summarised as follows:

30 June 31 December
2015 2014
USD
(unaudited)
USD
(audited)
Opening balance 486,791,838 472,788,345
Share of profit from an associate 9,529,159 7,616,312
Share of fair value change of associate’s available for sale investment (refer note (i) below)
1,302,562

6,387,181
Closing balance 497,623,559 486,791,838

(i)    The Company’s associate has invested in the equity of an entity, which has been classified as available for sale. Share of fair value change of associate’s available for sale investment represents change in fair value of this investment as at 30 June 2015.

7.   Share capital and share premium

Movement in share capital during the period:

The share capital of the Company has been allotted and issued of the following classes of shares:

Number of
shares
Ordinary
shares
Share
premium
Total
USD USD USD

At 1 January 2014 (audited)

1,268,049,125

10,226,655

395,146,685

405,373,340
Additional capital issued - - - -
At 31 December 2014 (audited)
1,268,049,125

10,226,655

395,146,685

405,373,340
At 30 June 2015 (unaudited) 1,268,049,125 10,226,655 395,146,685 405,373,340

The nominal value per share is GBP 0.005.

Share warrants

No share warrants were exercised by the share warrant holders and no new share warrants were issued by the Group during the period ended 30 June 2015.

8.   Related party transactions and balance

The Group enters into transactions in the normal course of business with related parties at market rates and terms agreed between the parties.

During the period, the Group entered into the following transactions with related parties:

30 June
2015
30 June
2014
(unaudited) (unaudited)
USD USD
Real estate advisory and consultancy fee 750,000 1,000,000

       Key management compensation                      

30 June
2015
30 June
2014
(unaudited) (unaudited)
USD USD
Salaries and other short-term benefits 352,500 352,500

Included in the statement of financial position are the following balances with related parties:

30 June
2015
31 December
2014
(unaudited) (audited)
USD USD
Prepayments, advances and other receivables 717,748 687,624
Trade receivables 677,255 521,284
Trade and other payables 302,480 304,701

9.   Comparative figures

The comparative information for the previous period has been reclassified, where necessary, in order to conform to the current period’s presentation. Such reclassifications do not affect the previously reported profit, net assets or equity of the Group.

This announcement has been made after due and careful enquiry; the directors of MMH accept responsibility for its content.

Enquiries:

Makkah & Madinah Holdings Ltd:
Reena Sebastian, Legal Manager: tel: +971 (0)4 423 9033; e-mail:[email protected]; further information on Makkah & Madinah Holdings Ltd. is available from the Company’s website: www.mm-holdings.com 

Keith, Bayley, Rogers & Co. Limited:
Graham Atthill-Beck: tel: +44 (0)20 7464 4092; mobile: +971 (0)50 856 9408/+44 (0)750 643 4107; e-mail:[email protected]
Hugh Oram: tel: +44 (0)20 7464 4096; e-mail:[email protected]


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