Board of Directors Report
I would first like to thank all of you on behalf of the Board of Directors, the Executive Management of Oula Fuel Company, and myself. I am also pleased to present you with the thirteenth financial statement for the company’s performance and the major achievements and results accomplished for the fiscal year ending 31st December 2018.
I would like to start by stating about the company's performance concerning the development of its stations, both in terms of infrastructure and the addition or development of services. During 2018, Oula Fuel Company was able to complete the following:
- The full renovation of Salmiya Station “14” located on the Fourth Ring Road, thus reaching the number of 20 fully-renovated stations with licensed investment activities, namely: C-Stores, Carwash services (equipped with the latest high-quality equipment that conforms to International Standards based on the newest technologies of environmental preservation), car maintenance services and ATM machines.
- The development of the infrastructure by installing the second generation Vapor Recovery System (VRS 2) in three stations: Station “109” located South of the airport; Station “96” located in Al-Shuwaikh and Station “104” Al-Nahida (East Sulaibikhat).
- The establishment of C-Stores in 6 Stations and signing contracts for all locations where the opening of these stores was scheduled during the first quarter of 2019. These stations are: Salmiya Stations on the Fourth and the Fifth ring roads, Kabd Station, West Shuaiba Station, Ardiya Industrial Station and Bayan Station.
- The opening of a car-service facility in Kabd Station
- Renewal and re-opening of Carwash services in Stations “14” and “71”.
- The establishment of Auto-Wash carwash service in Station “17” Al-Qurain to be operated in 2019.
- Increase points of sale for non-fuel products, such as cleaning sprays and fuel injection system to reach 20 stations.
- The closing of Station “90” Al-Sulaibia at the end of 2018 for development and partial renovation.
It is worth mentioning that the development of our Carwash services where we are keen on using the best materials that adhere to the highest environmental standards, along with the speed and efficiency in the completion of this service had been contributing factors to the growth rate compared to the year 2017. We have also been able to increase the proportion of prepaid fuel card sales compared to 2017, especially with the opening of our new Sales Branch at Qortoba Station.
Furthermore, a cooperation agreement was signed with one of the major banks to host the bank's promotion campaigns at OULA FUEL stations in order to achieve more financial benefits from the stations.
In addition, we have established Ultra Logistics Company to cover all the needs of fuel transportation services of Oula Fuel Company. Thirty transport trucks, manufactured in the year 2019, were purchased from one of the leading companies with special specifications. This deal is considered the first of its kind in the Middle East for this type of trucks which are equipped with "Fleet Board" GPS-tracking system. Such system is developed with great capabilities to keep up with the work and needs of your esteemed company. We have obtained the traffic and fire licensing, and final approval of Kuwait National Petroleum Company (KNPC) in under process. We have worked on preparing and equipping Station “42” (Al-Shuwaikh) and Station “109” (Seventh Ring Road) to accommodate the trucks and to be the center of operations in the first phase, which will be operational during the first quarter of the 2019. Moreover, to complete the logistics services, Oula Fuel Company signed a deal of purchasing 30 tanks from one of the best German Companies.
Oula always looks forward through its sound future strategy to maximize shareholders’ value by promoting the company brand and status, increase asset base and continue development and expansion of investment infrastructure of stations, thus resulting into greater customer experience. All these measures would translate into added revenue streams resulting into higher revenues and profits for the company. We also continue to lead the implementation of the requirements of Corporate Governance because of its impact on the protection of the rights of small investors and its positive impact on the performance of the company and maintaining the lead.
In terms of Corporate Governance, Oula Fuel company continues to fulfill its obligations according to the best methods, and to work on forming development plans and investments, and supporting the pace of growth through the company's commitment to the latest laws and regulations applied in the public shareholding companies listed on the Kuwait Stock Exchange and the requirements of the Capital Markets Authority.
Oula Fuel Company is committed to its social responsibility through highlighting its role towards the society in general, contributing to supporting various activities and projects for different parties, providing all support to people with special needs, as well as maintaining the Kuwaitization percentage level whether in the head office or in the subsidiary stations, and its commitment to the laws of environmental protection.
During 2018, the total fuel income of the company amounted to KD 154.6 million, with an increase of 4.3% in comparison with 2017. The operating profit reduced by KD 519K due to increase in operating cost.
The company has achieved an increase of 15.8% in other income from ancillary activities in the year 2018 as compared with year 2017.
Oula's consolidated net profit amounted to KD 3. 8 million with an increase of 6.3% in comparison with 2017, mainly because of the increase in non-fuel income sources.
The company's total assets increased to KD 116 million registering an increase of 27% as compared with 2017.
Dear shareholders, in light of what we have shared with you, we request your approval for distributing Cash Dividends of 5% of the paid up capital (5 fils for each share) to the shareholders with a record date 15 days after the general assembly meeting.
Abdul Hussain Al-Sultan
Chairman of Board of Directors