Saudi Arabia BUY. Result Update. Saudi International Petrochemical Company (SIPCHEM) CMP: SR18.2 (as on May 03, 2009) Highlights

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1 Result Update Saudi Arabia (SIPCHEM) Tickers: SIPCHEM AB (Bloomberg) 2310.SE (Reuters) Listing: Saudi Stock Exchange (Tadawul) CMP: SR18.2 (as on May 03, 2009) May, 2009 BUY Key Data CMP# (SR) 18.2 EPS* (SR) 0.9 BVPS* (SR) 16.3 P/E* 19.5 P/BV* M Avg.vol. 1,385, week Lo / Hi (SR) 13.3/46.0 Source: Global Research # As on May 03, 2009 * 2009 projected Highlights Saudi International Petrochemical Company (SIPCHEM) has reported after tax profit of SR536.8mn in 2008 against the previous year profit after tax of SR593.9mn in Moreover, the actual profitability of the Company is 12.2% lower than our initial forecast of SR611.2mn. It is worth mentioning that the Company has suffered a major decline in the bottom line during 4Q2008 to SR34.7mn as compared to preceding 3Q2008 PAT of SR136.8mn.The main reason of the lower profitability in 4Q2008 was (i) fall in average prices of crude oil by 51.7% to US$54.8 per barrel in 4Q2008 and (ii) slump in demand of petrochemicals and related products in the wake of global economic slowdown. In addition, the Company has also reported impairment loss of SR77.6mn in 2008, which has also dented the bottom line of the Company. Faisal Hasan, CFA Head of Research fhasan@global.com.kw Phone No:(965) Bikash Rout Senior Manager bcrout@global.com.kw Phone No:(965) Syed Taimure Akhtar Financial Analyst sakhtar@global.com.kw Phone No:(965) The fall in average crude oil prices in 4Q2008 and lower average crude oil prices in 1Q2009 has led us to revise down our average crude oil price range from our initial forecast of US$75- US$80 per barrel to US$60-US$65 per barrel. Moreover, we have also lower down the average capacity utilization rate to 55.0% in 2009, which is expected to increase gradually in coming years to 65% in 2009 and reach 77.5% in 2012, in the wake of economic recovery. Despite of the global economic slowdown and financial crisis, SIPCHEM has not intended to suspend or roll back its acetyl complex, however the status of olefin complex is still not cleared. Hence we have not accounted any material impact from this project. Our revised DCF base value of SIPCHEM is calculated at SR20.6. This implies that at present the updated fair value of stock is offering a potential upside of 13.1% over the market price of SR18.2 as on 3rd May We, therefore, maintain our BUY recommendation for the stock. 1

2 Financial Performance The financial performance of SIPCHEM remained prominent during the 9M2008, which was mainly due to higher prices and high demand in early However, the situation turned negative for the sector during 4Q2008, in the wake of global economic slowdown and financial crisis, which has massively reduced the prices of petrochemical products and slashed the demand of the product. This has led the Company s top and bottom line in 4Q2008 to record the decline of 50.2% and 74.6% respectively as compared to 3Q2008. Subsequently, the overall profitability of the Company has declined by 9.6% to SR536.8mn in 2008 from the profitability recorded in Acetyl Complexes Contrary to the international petrochemical players, the Company has shown its commitment towards the expansion plan and till now has not shown any delay in Acetyl Complexes. The project is expected to start generating the cash flow by 3Q2009. Moreover, Acetyl complexes comprise of three companies i.e. (i) International Acetyl Complex-IAC, from where SIPCHEM will get 400,000 tons of Acetate Acid-AA and 50,000 tons of Acetic Anhydride- Aan, (ii) International Vinyl Acetate Company-IVAC, which will produce 300,000 tons of Vinyl Acetate Monomer-VAM & consume 80% production of IAC and (iii) International Gas Companies-IGC to produce carbon monoxide-co. Furthermore, these complexes are very well integrated with each other and with methanol producing plant. This will result in an improvement in the gross margins (excluding depreciation) of the Company, going forward. Capacity, Production and Utilization Rate The global economic slowdown has caused a massive downfall in the demand of petrochemical products. Subsequently, we have lowered down the Company s capacity utilization rate to the average level of 60%-65% in However, we believe that the capacity utilization rate will start improving during the end of 2010 onwards will be averaged out in the range of 75%-80% in 2012 on the back of expected recovery in The downward revision in the utilization rate has led us to make downward revision in the Company s production in between the average range of 4%-5% during from our initial estimates. In addition, the major fall in the Company s production has made during 2009, which is mainly based on a sudden economic slump in 4Q2008. Chart 01: Production (tons) & Capacity Utilization 500, , , , , , , , ,000 1Q08E 2Q08E 3Q08E 4Q08E 1Q09E 2Q09F 3Q09F 4Q09F 1Q10F 2Q10F 3Q10F 4Q10F 1Q11F 2Q11F 3Q11F 4Q11F 1Q12F 2Q12F 3Q12F 4Q12F Source: Company Annual Reports & Global Research Production Capacity Utilization 105% 95% 85% 75% 65% 55% 45% 2

3 Feed Stock & Product Prices Natural gas is the main feedstock for fertilizer sector and crude oil prices are used as a benchmark to set gas prices in international markets. However, gas prices are highly subsidized in certain regions of the world Middle-East, Northern Africa, and South Asia to have pre-determined discounts and ranging between US$0.75 per mmbtu (in Saudi Arabia) to US$2.5 per mmbtu (North Africa and South Asia). Average gas prices, in international markets, have shot up by 79.5% from US$4.4 per mmbtu in 2001 to US$7.9 per mmbtu in 2008, which was mainly due to higher average crude oil prices YoY. However, the recent decline in crude oil prices has broken the upward rally in the gas prices and brought the average prices of gas from US$8.7 per mmbtu in 3Q2008 to US$5.7 per mmbtu in 4Q2008. Furthermore, we have changed our stance on future OPEC crude oil prices and reduce our forecasted prices from recently updated average price (please refer to Investment Update of SAFCO report) range of US$65-US$70 per barrel to the levels of US$60-US$65 per barrel during , which is based on the lower than expected average prices of US$42.9 per barrel in 1Q2009. However, the expected global recovery in late 2010 will lead to fuel the prices of crude oil to have better year end average prices from 2010 onwards. Consequently, the average gas prices are expected to remain in between the levels of US$ per mmbtu during The recovery in average prices of crude oil is mainly due to the forecasted recovery in global economy in Chart 02: Gas (US$ per mmbtu) & Crude Oil (US$ per barrel) Prices E 2010E 2011E 2012E Crude Oil (LHS) Gas (RHS) Source: EIA & Global Research Furthermore, we believe the lower average prices of crude oil during 2009 will lead to restrict the prices of naphtha in the average range of US$ per ton. Hence, the prices of petrochemical product will also remain under pressure. Sales Revenue Growth We have revised down our forecasted sales revenue at 4-years CAGR of 9.6% as compared to our initial forecast of 4 years CAGR of 12.5%. The downward revision in sales revenue growth is mainly associated with the (i) lower capacity utilization and (ii) 50%-65% lower prices from the initial estimates. Moreover, these factors also affected the Company s sales revenue growth in 2009 and registered a decline of 29.1%. However, with the improvement in utilization rate on the back of expected recovery in late 2010, increase in average prices and full year impact of Acetyl Complexes will lead the Company to show a remarkable growth of 55.5% in sales revenue during

4 Chart 03: Expected Sales Revenue (SR mn) & Growth 3, % 2, % 80.0% 2, , % 60.0% 40.0% 1, % 11.8% 14.4% 14.6% 20.0% 0.0% % 2006A 2007A 2008A 2009E 2010E 2011E 2012E Sales Revenue Growth -20.0% -40.0% Source: Company Annual Reports & Global Research Expected Gross & EBITDA Margins The Company is expected to show a gross profit of SR598.1mn, which depicts the gross margin of 49.4% in 2009 as compared to the gross margin of 59.4% in The lower gross margin in 2009 is mainly based on the higher depreciation cost due to the completion of Acetyl Complexes in 2Q2009. Furthermore, we expect the Company is expected to show EBITDA of SR885.4mn as compared to SR1.2bn in Hence, the EBITDA margin of the Company is expected to fall from 68.3% in 2008 to 73.1% in Moreover, based on incorporation of updated fundamental changes in the sector, the Company s updated gross profit margins are 20%-25% lower than the initial forecast, on average basis during Chart 04: Gross & EBITDA (SR mn) & GP Margins 2, , , % 62.4% 59.4% 59.0% 59.7% 60.4% 65.0% 60.0% 1, , % 1, % 2006A 2007A 2008A 2009E 2010E 2011E 2012E Gross Profit EBITDA Gross Margin 50.0% 45.0% 40.0% Source: Company Annual Accounts & Global Research Profitability Growth The Company has posted an after tax profit of SR536.6mn during 2008, which is lower that the PAT of SR593.9mn in 2007 and our initial estimate of SR611.2mn. The Company s profitability during 2008 was mainly hit during 4Q2008, which was mainly due to global economic slump and massive fall in crude oil prices. Moreover, the expectations of lower demand, capacity utilization and lower prices have led us to make an average downward revision of 25%-30% in the profitability of the Company, during , from our initial forecast. In addition, we expect the Company will report the after tax profit of SR335.9mn during 2009.Our updated ROAA and ROAE are expected to stay at an average level of 5.7% and 8.9% respectively. 4

5 Chart 05: Profitability (SR mn) & ROAA 1, % % 9.1% 5.8% 2.8% 5.5% 6.1% 6.7% 10.0% 8.0% 6.0% 4.0% 2.0% A 2007A 2008A 2009E 2010E 2011E 2012E Profitability ROAA Source: Annual Reports & Global Research 0.0% Chart 06: Profitability (SR mn) & ROAE 1, % % 17.3% 18.0% 16.0% % % 9.4% 10.0% 10.6% 12.0% 10.0% % % 6.0% 4.0% 2.0% A 2007A 2008A 2009E 2010E 2011E 2012E Profitability ROAE Source: Annual Reports & Global Research 0.0% Quarterly Performance - 1Q2009 SIPCHEM has posted after tax profit of SR29.2mn during 1Q2009 as compared to the after tax profit of SR231.6mn in corresponding period last year. The lower profitability during 1Q2009 was mainly due to lower demand and average prices. The Company has made the reversal of provision for project development cost during the quarter which has jacked up the bottom line of the Company and considered as non-recurring income. Furthermore, the Company s financial charges have dropped down by more than 50%, which is mainly due to fall in interest rates. Table 01: 1Q Income Statement SR mn 1Q2008 1Q2009 Net Sales Cost of Sales (193.0) (136.9) Gross Profit Selling, General & Administrative Expenses (14.1) (17.1) Operating Income Financial Charges (27.2) (13.8) Other Income 1.0 (0.6) Investment Income Reversal Of Provision For Project Developmental Cost Net Expenses Of Pre-Operating Expenses (0.6) (0.5) Minority Interest (118.7) 6.9 Net Profit Before Zakat Zakat (10.1) (0.9) Net Profit After Zakat Source: Company Quarterly Reports 5

6 The balance sheet size of the Company during 1Q2009 has increased by 26.7% from the reported size of SR8.7bn during 1Q2008, which is mainly due to remarkable growth in the asset base of the Company. The asset base of the Company has increased by SR2.0bn from SR5.9bn in 1Q2008, while the long-term debt has increased by SR2.4bn during 1Q2009. This indicates that the growth in the Company s asset is mainly backed by the long-term financing. Table 02: 1Q2009 Balance Sheet SR mn 1Q2008 1Q2009 Assets Total Current Assets 2, ,803.4 Total Fixed Assets 6, ,301.1 Other Assets - - Total Assets 8, ,104.7 Liabilities & Equity Total Current Liabilities Total Non-Current Liabilities 1, ,225.3 Provisions - - Total Liabilities & Provisions 2, ,201.2 Minority Interest Shareholders Equity Share Capital 3, ,333.3 Statutory Reserves General Reserves Fair Value Cash Flow Hedge - (180.3) Retained Earnings Total Shareholders Equity 5, ,013.9 Total Liabilities & Shareholders Equity 8, ,104.7 Source: Company Quarterly Reports Valuation and Recommendation We have used Discounted Cash Flows methodology to value the Company. Under this valuation we have used 4-year (FY2009-FY2012) explicit forecast period for the Free Cash Flows (FCF) of SIPCHEM. The terminal value is estimated by using a constant terminal growth rate for the Company. The forecasted cash flow and the terminal value is then discounted at the company Weighted Average Cost of Capital (WACC). In order to value the FCF of SIPCHEM, we have used the following assumptions: 1. Risk Free Rate (RFR) of 5.5%. 2. Equity risk premium of 5.5%. 3. Beta of A terminal growth rate of 3.0%. 5. A target cost of debt of 7%. Using the above assumptions, we have derived a cost of equity for the company at 12.4%, by using Capital Assets Pricing Model, and a WACC of 10.7%, resulting in the Company worth at SR20.6 per share. 6

7 Table 03: DCF Calculations (SR Mn) 2009 (E) 2010 (E) 2011 (E) 2012 (E) FCF Discounted Cash Flow Terminal Value 10,734.1 Primary Value 1,284.0 Terminal Value (discounted) 7,913.1 Total Enterprise Value 9,197.1 Debt (3,775.8) Add: Investments & cash equivalents 1,438.0 Total Equity Value 6,859.4 Shares Outstanding ( 000) 333,333 Fair Value Per Share 20.6 Source: Global Research Sensitivity Analysis We have carried out a sensitivity analysis, which shows the probable value given different growth rate assumption and WACC. The shaded area represents the most probable outcomes. Table 04: Sensitivity Analysis Terminal Growth Rates 1.50% 2.50% 3.00% 3.50% 4.50% 8.70% % % % % Source: Global Research WACC Our revised DCF base value of SIPCHEM is calculated at SR20.6. This implies that at present the updated fair value of stock is offering a potential upside of 13.1% over the market price of SR18.2 as on 3rd May We, therefore, maintain our BUY recommendation for the stock. 7

8 Balance Sheet Amount in SR E 2010E 2011E 2012E Assets Current Assets Cash and Equivalents 1,507,117 1,562,011 2,581,034 1,438,026 2,006,243 2,194,853 2,397,350 Inventories 59, , ,728 71, , , ,827 A/R, P.Payment & R/A 256, , , , , , ,768 Total Current Assets 1,824,069 1,994,750 2,848,656 1,770,002 2,486,281 2,875,357 3,176,945 Non-Current Assets Plant & Property-Net 3,199,860 5,416,418 7,654,567 8,206,815 8,726,340 9,292,622 9,909,869 Project Development Cost 40, , ,209 1,044, , , ,250 Intangible Assets 197, , , , , , ,836 Other Assets Total Non-Current Assets 3,438,135 5,755,300 7,984,700 9,406,348 9,334,458 9,891,423 10,497,955 Total Assets 5,262,204 7,750,050 10,833,356 11,176,351 11,820,739 12,766,780 13,674,900 Liabilities and Equities Current Liabilities Trade Creditors 476,606 1,112, , , ,297 1,219,067 1,393,266 Short term loans - 878, Current Portion of Long term loans 124, , , , , , ,484 Current Portion of Capital Lease - 32,108 42,811 43,828 39,445 35,500 31,950 Total Current Liabilities 601,236 2,163,553 1,009, ,081 1,063,050 1,408,761 1,571,701 Non-Current Liabilities Long-Term Debt 1,688,004 1,085,496 3,106,393 3,246,181 3,083,872 2,929,678 2,783,194 End-Of-Service Indemnities 12,957 19,807 33,531 33,531 33,531 33,531 33,531 Obligation Under Capital Lease - 486, , , , , ,553 Sub-Ordinate Loans From Minority Shareholders - 102, , , , , ,131 Total Non-Current Liabilities 1,700,961 1,694,328 3,719,217 3,809,291 3,607,537 3,417,843 3,239,409 Total Liabilities 2,302,197 3,857,881 4,728,590 4,700,372 4,670,587 4,826,604 4,811,109 Shareholders Equity Share Capital 1,500,000 2,000,000 3,333,333 3,333,333 3,333,333 3,333,333 3,333,333 Share Premium 666, , , , ,667 Statutory Reserves 117, , , , , , ,893 General Reserves - 275, , , , , ,000 Retained earnings 787, , , ,655 1,445,756 2,046,648 2,756,180 Total Equity 2,405,505 2,996,878 5,165,133 5,442,382 6,013,196 6,689,524 7,488,074 Minority Interest 554, , ,634 1,033,597 1,136,957 1,250,653 1,375,718 Total Shareholders Equity & Minority Interest 2,960,007 3,892,170 6,104,767 6,475,980 7,150,153 7,940,177 8,863,792 Total Liabilities, Shareholders Equity & Minority Interest 5,262,204 7,750,050 10,833,356 11,176,351 11,820,739 12,766,780 13,674,900 Source: Company Annual Accounts & Global Research 8

9 Income Statement Amount in SR E 2010E 2011E 2012E Sales 1,333,990 1,527,675 1,708,580 1,210,754 1,882,502 2,153,494 2,467,070 Cost of Sales (512,270) (574,984) (693,843) (612,674) (772,751) (868,370) (977,157) Gross Profit 821, ,691 1,014, ,080 1,109,751 1,285,124 1,489,913 General & Administration Expenses (48,494) (56,850) (70,600) (68,410) (75,300) (86,140) (98,683) Operating Income 773, , , ,670 1,034,451 1,198,984 1,391,231 Investment Income 49,118 69,000 62,716 50,696 70,547 75,080 79,909 Financial Charges (81,289) (100,186) (79,069) (127,112) (142,960) (135,372) (128,235) Net Expenses of Pre-Operating Activities (1,106) (857) 503 (3,217) (3,953) (4,309) (4,309) Provision of developmental cost (77,600) 25, Income Before Minority Interest & Zakat 739, , , , ,085 1,134,383 1,338,596 Minority Interest (220,808) (250,019) (283,526) (121,999) (287,425) (340,315) (401,579) Net Income Before Zakat 519, , , , , , ,017 Zakat (25,448) (19,807) (30,376) (17,094) (33,533) (39,703) (46,851) Net Income 493, , , , , , ,166 P&L Appropriation Account Opening Balance of Retained Earnings 343, , , , ,655 1,445,756 2,046,648 Net Income of the year 493, , , , , , ,166 Transfer to Stautory Reserves (49,369) (59,397) (20,685) (31,094) (63,713) (75,436) (89,017) Dividend - - (365,930) (31,094) (63,713) (75,436) (89,017) Bonus - (500,000) General Reserves - (275,000) Directors Remuneration - (2,600) (2,600) (2,600) (2,600) (2,600) (2,600) Ending Balance of Retained Earnings 787, , , ,655 1,445,756 2,046,648 2,756,181 Source: Company Annual Accounts & Global Research 9

10 Cash Flows Statement SR E 2009E 2010E 2010E 2010E Profit for the year 493, , , , , , ,166 Depriciation 147, , , , , , ,401 Amortization 34,594 41, Financial Cost 81, ,186 79, , , , ,235 Investment Income (54,055) (38,239) (52,722) (29,680) (30,422) (31,183) (31,962) Minority Interest 220, , , , , , ,579 Other Income 4,937 (30,761) (9,994) (21,016) (40,125) (43,897) (47,947) Net expenses of pre-operating expenses 1, (503) 3,217 3,953 4,309 4,309 Change in Working Capital 151, ,299 (114,077) (221,450) 36, ,304 75,109 Net Cash from operating activities 1,081,984 1,590, , ,143 1,396,351 1,711,187 1,853,890 INVESTING ACTIVITIES Purchase of Plant & Property (895,314) (2,410,675) (2,485,672) (878,265) (878,125) (960,883) (1,051,649) Pre-Operating Expenses (1,106) (857) 503 (3,217) (3,953) (4,309) (4,309) Investment in Securities 259, Other Non-Current Assets 63,252 69,000 62,716 50,696 70,547 75,080 79,909 Cash Flows from Investing Activities (573,584) (2,342,532) (2,422,453) (830,786) (811,531) (890,113) (976,049) FINANCING ACTIVITIES Long-Term Financing (165,571) (602,508) 2,020, ,788 (162,309) (154,194) (146,484) Short-Term Financing - 1,499,383 (877,279) (48,697) (43,828) (39,445) (35,500) Proceeds from Issuance of shares - - 1,333, Directors Remuneration - (2,600) (2,600) (2,600) (2,600) (2,600) (2,600) Share Premium , Dividend Paid - - (365,930) (31,094) (63,713) (75,436) (89,017) Other Financing Activities 705 (87,299) (303,219) (986,760) 255,846 (360,789) (401,743) Cash Flows from Financing Activities (164,866) 806,976 2,471,869 (929,364) (16,603) (632,464) (675,344) Increase/Decrease in Cash 343,534 54,894 1,019,023 (1,143,008) 568, , ,498 Cash Beginning Balance 1,163,583 1,507,117 1,562,011 2,581,034 1,438,026 2,006,243 2,194,853 Cash Ending Balance 1,507,117 1,562,011 2,581,034 1,438,026 2,006,243 2,194,853 2,397,350 Source: Company Annual Accounts & Global Research 10

11 Fact Sheet E 2010E 2011E 2012E Liquidity Ratios Current Ratio Cash Ratio Profitability Ratios Gross Margin 61.6% 62.4% 59.4% 49.4% 59.0% 59.7% 60.4% EBITDA Margin 73.1% 71.1% 68.3% 73.1% 75.6% 75.4% 75.3% EBIT Margin 62.0% 61.1% 53.8% 46.2% 56.6% 57.1% 57.7% Net Profit Margin 37.0% 38.9% 31.4% 25.7% 33.8% 35.0% 36.1% ROAE 18.6% 17.3% 10.7% 4.9% 9.4% 10.0% 10.6% ROAA 10.2% 9.1% 5.8% 2.8% 5.5% 6.1% 6.7% Leverage Ratios Debt to Equity Debt to Asset 32.1% 14.0% 28.7% 29.0% 26.1% 22.9% 20.4% Liabilities/Total Assets (x) Growth Rates Revenue Growth Rate 83.7% 14.5% 11.8% -29.1% 55.5% 14.4% 14.6% Net Income Growth Rate 51.9% 20.3% -9.6% -42.1% 104.9% 18.4% 18.0% Equity Growth Rate 25.8% 24.6% 72.4% 5.4% 10.5% 11.2% 11.9% Total Asset Growth Rate 18.8% 47.3% 39.8% 3.2% 5.8% 8.0% 7.1% Ratios Use for Valuation Number of Shares (mn) Par value per share (SR) BV per share (SR) EPS (SR)-Adjusted Market Price (SR) Market Cap in (SR Mn) 3, , , , , , ,066.7 EV (SR Mn) 8, , , , , , ,452.5 EV/EBITDA P/E Ratio P/BV Ratio Source: Company Annual Accounts & Global Research *Historical P/E & P/BV multiples pertain to respective year-end prices, while those for future years are based on closing prices on the Tadawul as of 03 May

12 The following is a comprehensive list of disclosures which may or may not apply to all our researches. Only the relevant disclosures which apply to this particular research has been mentioned in the table below under the heading of disclosure. Disclosure Checklist Company Saudi International Petrochemical Co. Recommendation Buy Ticker SIPCHEM AB (Bloomberg) 2310.SE (Reuters) Price SR18.2 Disclosure 1, did not receive and will not receive any compensation from the company or anyone else for the preparation of this report. 2. The company being researched holds more than 5% stake in. 3. makes a market in securities issued by this company. 4. acts as a corporate broker or sponsor to this company. 5. The author of or an individual who assisted in the preparation of this report (or a member of his/her household) has a direct ownership position in securities issued by this company. 6. An employee of serves on the board of directors of this company. 7. Within the past year, has managed or co-managed a public offering for this company, for which it received fees. 8. has received compensation from this company for the provision of investment banking or financial advisory services within the past year. 9. expects to receive or intends to seek compensation for investment banking services from this company in the next three month. 10. Please see special footnote below for other relevant disclosures. Global Research: Equity Ratings Definitions Global Rating Definition Buy Hold Reduce Sell Fair value of the stock is >10% from the current market price Fair value of the stock is between +10% and -10% from the current market price Fair value of the stock is between -10% and -20% from the current market price Fair value of the stock is < -20% from the current market price This material was produced by KSCC ( Global ),a firm regulated by the Central Bank of Kuwait. This document is not to be used or considered as an offer to sell or a solicitation of an offer to buy any securities. Global may, from time to time,to the extent permitted by law, participate or invest in other financing transactions with the issuers of the securities ( securities ), perform services for or solicit business from such issuer, and/or have a position or effect transactions in the securities or options thereof. Global may, to the extent permitted by applicable Kuwaiti law or other applicable laws or regulations, effect transactions in the securities before this material is published to recipients. Information and opinions contained herein have been compiled or arrived by Global from sources believed to be reliable, but Global has not independently verified the contents of this document. Accordingly, no representation or warranty, express or implied, is made as to and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information and opinions contained in this document. Global accepts no liability for any loss arising from the use of this document or its contents or otherwise arising in connection therewith. This document is not to be relied upon or used in substitution for the exercise of independent judgement. Global shall have no responsibility or liability whatsoever in respect of any inaccuracy in or ommission from this or any other document prepared by Global for, or sent by Global to any person and any such person shall be responsible for conducting his own investigation and analysis of the information contained or referred to in this document and of evaluating the merits and risks involved in the securities forming the subject matter of this or other such document. Opinions and estimates constitute our judgment and are subject to change without prior notice.past performance is not indicative of future results. This document does not constitute an offer or invitation to subscribe for or purchase any securities, and neither this document nor anything contained herein shall form the basis of any contract or commitment whatsoever. It is being furnished to you solely for your information and may not be reproduced or redistributed to any other person. Neither this report nor any copy hereof may be distributed in any jurisdiction outside Kuwait where its distribution may be restricted by law. Persons who receive this report should make themselves aware of and adhere to any such restrictions. By accepting this report you agree to be bound by the foregoing limitations. 12