Dear Shareholders,
On behalf of the Board of Directors, I am pleased to present the annual report for the financial year ending December 31 st , 2023. UOP delivered a strong performance in 2023, achieving key successes and demonstrating financial resilience despite a challenging economic environment.
Overcoming Challenges
The global and domestic economic environment in 2023 presented significant challenges for Kuwait's oil sector, under the influence of geopolitical instability, production quota cuts, oil price volatility, a global economic slowdown, and fiscal pressures. However, these challenges were met by UOP with unwavering determination and effective strategies, thereby mitigating its impact. Further, the company has identified opportunities for growth in the related upstream and downstream oil & gas sectors, in addition to specific prospects for the renewable energy sector and new markets for the chemical division.
Despite the economic headwinds, UOP achieved several key successes in 2023 that position us for continued development.
UOP's Year of Success
United Precision Drilling Company (UPDC) delivered a strong performance, spudding 4 rigs and finalizing preparations for 2 more new rigs in the upcoming year. This brings their total active rigs count in Kuwait to 10 nos. for 2024.
United Qmax Drilling Fluids Company (UQDF) maintained its success by providing mud services to Deep and Development drilling projects.
Strategic Investment: Expanded our investment portfolio by through a 20% equity stake in Jassim Transport & Stevedoring Company K.S.C.P. (JTC).
Chemical Division: The UOP's resin manufacturing division successfully regained key customers in the export market. This achievement reinforces their strong foothold within the GCC.
Financial Strength and Growth
UOP maintained its positive financial trajectory throughout 2023, demonstrating resilience in the face of economic challenges. We are confident in our ability to continue this steady expansion in the years to come.
Increased Profitability: UOP's net Profit for the fiscal year ending 2023 rose to KD 2.60 million, which marks an increase of 20% compared to the previous year.
Strong Equity and Assets: Shareholders' equity increased by 6% to KD 30.34 million, and total assets rose by 6% to KD 32.10 million, indicating growth in retained earnings resulted from strong performance in 2023 despite dividend payouts.
Commitment to Shareholders
In line with UOP's dedication to maximizing shareholder value, the Board recommends a cash dividend distribution of 15% of the company's paid-up capital, equivalent to 15 fils per share. This recommendation is subject to approval by the general assembly and relevant authorities.
UOP remains steadfast in its commitment to delivering long-term value for our shareholders. By actively pursuing key strategic initiatives, UOP is confident in delivering sustainable growth and maximizing shareholder value in the coming years.
Gratitude and Appreciation
I extend my sincere gratitude to our shareholders, customers, and partners for their continued trust and support. I also commend the Executive Management team for their exceptional efforts in transforming challenges into opportunities and achieving positive results. Their dedication and commitment are critical to UOP's ongoing success. My appreciation is further extended to the Board of Directors for their unwavering support in achieving our vision for a brighter future. Finally, I acknowledge with gratitude the relevant Government Regulatory authorities for their contribution and support to the Industrial Sector and Oil Services, especially during this challenging year.
Sincerely
Sabah Mohammad Al Sabah
Chairman
