#Arab Palestinian Investment Company #Tarek Aggad #Palestine #Ramallah #Gaza conflict

Arab Palestinian Investment Company's Financial Results for 2024

The Arab Palestinian Investment Company (APIC) recently published its preliminary (unaudited) financial outcomes for the year 2024, revealing a challenging year influenced by significant economic hurdles. Despite facing a net profit of USD 9 million attributed to its shareholders—a decrease of 49% from the previous year—the chairman and CEO, Tarek Aggad, expressed optimism regarding the company's performance amidst adversity.

Financial Overview

APIC reported total revenues of USD 1.12 billion which represents a 6% decrease compared to 2023. EBITDA also witnessed a similar decline, standing at USD 68.4 million. While total assets increased to USD 842 million (a 5.5% rise), net equity attributed to shareholders grew slightly by 2.4% to USD 189 million.

Aggad attributed the profit decline primarily to the negative impacts of the conflict in Gaza and the resulting restrictions on commercial activities. Closures in West Bank cities, along with limitations on mobility for goods and people, significantly hampered operations.

Many of APIC’s subsidiaries experienced heightened costs due to delays in equipment clearance, which, compounded with rising storage charges, affected profitability across various sectors. The company's performance particularly suffered from the Palestinian Authority (PNA)'s financial struggles, which left it unable to meet its fiscal responsibilities, directly impacting subsidiaries like Medical Supplies and Services Company (MSS).

Sector Challenges

In 2024, the Palestinian economic landscape faced additional hurdles. The construction industry saw a staggering 60% decline, while demand for vehicles plummeted by around 60%, severely influencing sales for the Palestine Automobile Company. Furthermore, the purchasing power of consumers diminished as many began opting for lower-cost alternatives due to reduced incomes.

Additionally, sales for Unipal General Trading Company dropped due to a boycott on numerous foreign goods, while advertising revenues for Sky Advertising and Promotion were negatively impacted as businesses cut down on promotional spending amid the economic downturn.

The rise in logistical challenges also contributed to significant supply shortages among several subsidiaries, exacerbated by global supply chain pressures, including surging costs in raw materials and shipping. Aggad noted that increased financing costs of about USD 4 million, attributed to climbing global interest rates, further compounded these issues.

Moreover, accounting changes due to International Accounting Standard No. 29 on the results of its Turkish subsidiary, Polonez, added USD 5 million in complications due to hyperinflation in Turkey, reinforcing the company's difficulties in achieving prior profitability levels.

Commitment to Social Responsibility

Despite these challenges, APIC remains devoted to its role within the community. The company allocated approximately USD 1.6 million towards social responsibility initiatives in 2024, focusing on support for orphans, healthcare, education, and various charitable institutions, showcasing its resilience and commitment to making positive contributions amid adversity.

Founded as a public shareholding investment firm listed on the Palestine Exchange (PEX APIC), APIC has established itself in various sectors through its extensive network of subsidiaries including Siniora Food Industries Company and National Aluminum and Profiles Company (NAPCO). Employing over 3200 individuals, the company continues to strive for impactful contributions to the economy despite recent setbacks.

For more detailed information on their operations, visit APIC's official website.