December 12, 2023 – Ramallah, Palestine: Arab Palestinian Investment Company (APIC) Chairman and CEO Tarek Aggad announced that APIC achieved an EBITDA of USD 54.4 million by the third quarter of 2023. Net profits for the same period amounted to USD 17.4 million, a decline of 36.7% year on year. Net profits attributed to APIC shareholders reached USD 15.8 million, while total revenues grew by 6.2% year on year and amounted to USD 916.7 million by the third quarter of 2023. Total assets increased by 5.4% compared to 2022’s closing and reached USD 783 million, while net equity attributed to APIC shareholders increased by 2.5% compared to 2022’s closing and amounted to USD 190 million.
Aggad explained the main reasons for the decline in net profits by the third quarter of 2023 when compared to the same period of last year, the most prominent of which was the increase in the cost of debt as a result of inflation in the cost of financing due to the global rise in interest rates, noting that the average cost of debt on the group increased from 4.5% to 6.6% over the past two years. Additionally, there was an accounting impact related to the application of International Accounting Standard No. 29 on the results of Siniora’s Turkish subsidiary Polonez of about USD 2 million by the third quarter of 2023, since Turkey is classified as a hyperinflationary country, in addition to the sharp decline in the value of the shekel against the US dollar, where the main operational currency in Palestine is the shekel, while the main currency for purchases from outside Palestine, as well as the official currency for APIC’s financial statements, is the US dollar. Therefore, these factors combined led to lower net profits by the third quarter of 2023 compared to the same period in 2022.
With regards to the impact of the current conditions on the group’s performance in the fourth quarter of 2023, Aggad said that most Palestinian companies were negatively affected during these unprecedented circumstances of the war on Gaza, noting at the same time that the diversity of geographical locations and sectors in which APIC’s subsidiaries operate, including manufacturing, trade, distribution, and services, has reduced the severity of the expected impact on the APIC group, especially since 80% of the group’s revenues are derived from the trade and distribution sectors for basic needs of food and medicines. Aggad added that APIC provided support to Gaza through UNRWA and the Palestinian Red Crescent Society, totaling USD 450,000 since the beginning of the recent aggression, and is committed to providing more support to contribute to alleviating the suffering of our people in Gaza and meet their basic needs.
Aggad went on to affirm the company’s solid financial position and its achieved results despite the many challenges, noting that over the past five years, APIC has achieved strong growth in revenues as well as in EBITDA, with a compound annual growth rate of approximately 11%, in addition to achieving stable profit margins. Aggad also added that there are opportunities for growth and expansion in Palestine and abroad, going on to say that he is confident in the performance of APIC’s subsidiaries and their ability to achieve good results that meet shareholder expectations in the coming years.