Dear Shareholders,

On behalf of my fellow Directors, I am pleased to present the annual report for the financial year ending 31st December 2022, outlining the Company’s operational results and achievements. In terms of the economy, 2022 was a year of contrasts.

The Russian-Ukrainian conflict erupted at a time when economies were beginning to recover from the COVID-19 pandemic slowdown, disrupting the economic cycle with legislative delays, supply-chain disruptions, and higher costs across the board, especially in the materials and labor segments. However, positive signs of economic recovery emerged by the end of 2022. United Oil Projects’s (UOP) well diversified portfolio delivered healthy positive performance during the year.

The established investments in the Oil & Gas sector showed some upswings in Client activities, particularly in the fourth quarter of 2022. Performance of new investments & portfolios activities was subdued due to the prevailing inflationary prices and delays in benefiting from spillover of new projects in the upstream sector. Despite the threat of recession looming over the global economy, UOP’s portfolio of companies has high hopes for 2023, hopefully presuming limited effect in the Middle east economies.

BUSINESS HIGHLIGHTS OF THE YEAR
United Precision Drilling Company secured 6 new contracts with Kuwait Oil Company, which included renewal of 4 contracts with its existing rigs and 2 contracts for newly built rigs. United Qmax Drilling Fluids continued its successful journey as the best performer, among all the other players, for the Development Contract. The Chemical division was largely affected by the subdued activity in the sector, due to high material costs in the initial quarters, but started to pick up in the last quarters due to easing of the material prices. UOP intends to pursue investment opportunities in new sectors, which can financially improve its performance and diversification of its business.

FINANCIAL OUTCOME
UOP has maintained its positive momentum throughout 2022, as evidenced by the Company’s financial performance, despite the challenges it encountered during the year under review. We are confident that we will continue our steady expansion in the years to come.

UOP’s net income for the fiscal year ending in 2022 rose to KD 2.17 million from KD 2.03 million in the previous financial year. The Net shareholders’ equity increased by 1.6% in 2022 to reach KD 28.64 million, mainly from profits earned during the year; despite paying out 2021 dividends and the drop in market prices of our portfolio shares. The total assets have also increased by 2% to reach KD 30.4 million as compared to KD 29.8 million in 2021.

In view of the above and in line with UOP’s commitment to maximize its shareholders interests, I am pleased to announce the board recommendation, to distribute cash dividends of 12 per cent of the company’s paid-up capital, equivalent to 12 fils per share, subject to the approval of the general assembly and the related authorities.

I take this opportunity to express my appreciation to our shareholders, customers, and partners for their constant trust. I also thank the Executive Management for transforming the challenges of current year into opportunities and achieve positive results through their dedication and constant efforts to enhance UOP’s position and achieve its goals in spite of the existing business challenges. I also extend my gratitude to the Board of Directors for their support to our vision aimed at achieving a better future for the Company.

In addition, I also acknowledge with gratitude the relevant Government Regulatory authorities who have contributed and supported the Industrial Sector and Oil Services and maintained their distinguished position during this challenging year.

Sincerely

Sabah Mohamed Al-Sabah
Chairman