Americana’s third-quarter profit was US$37.5m, up more than a third on the same period last year, on the back of turnover of $749m, up 5% year-on-year. Over the first nine months of the year, the company saw profits rise 15%, reaching US$143.5m, with turnover up 6.9%, compared with the first three quarters of last year.
Costs down, restaurants up
In a filing to the Kuwait Stock Exchange, Americana – formally known as Kuwait Food Co – attributed the increase in profits to an increase in revenues and a fall in expenses, without providing any additional details. Given the relatively small increase in sales, it may be the growth in profit is largely down to cost-cutting within the firm.
Americana also revealed it made US$309.7m, or 41.4% of its sales, from the sale of food products in Q3, compared to US$439m, or 58.6% of sales, from its restaurant chains. This represents a shift away from its food business from the same time last year, when its food products business brought in 44.3% of revenues, with its restaurant business on 55.7%.
The firm’s share price remained flat following the quarterly results announcement, having dropped in price when a ban on trading was lifted earlier this month. Americana’s share price fell to KWD2.98 when trading resumed, before falling again to reach KWD2.78 at the end of this week, well down from a mid-August high of KWD3.26 – and also in line with a general slump in Kuwaiti stocks since the summer.
Americana had asked for its shares to be suspended from trading in September, when it formally acknowledged it was the subject of takeover talks. The firm’s majority owner, Kuwait’s Al Kharafi family, has been looking to sell its stake since April, when it retained investment bank Rothschild to negotiate the sale, according to media reports.
Since then a range of bidders have emerged, including Saudi Arabia’s Savola Group, CVC Capital Partners, KKR & Co, TPG Capital, and Advent International Corp. Last month Brazilian food producer BRF was forced to formally deny it was in the running to buy a stake in Americana, following a report by Bloomberg it was working with KKR & Co and CVC Capital Partners.
Americana is one of the GCC’s largest food and restaurant firms, selling its products through retail food brands including California Garden and Farm Frites, as well as the Americana brand. Among its 23 restaurant franchises, it operates KFC, Pizza Hut and TGI Fridays.