Aamal Company Q.P.S.C. (AHCS.QA) Earnings Call Transcript & Summary

Hello, everyone. This is Laura from the Corporate Communications Department of Aamal Company. I hope everyone is doing well today. I would like to start by welcoming you to Aamal Company's 2025 6 Months Financial Results Investors Call. On this call, we have Mr. Arif, the Accounts Manager of Aamal Company; and Mr. Zaid Shelleh, the Investor Relations Manager at Aamal Company. We will conduct this call with first, Mr. Zaid presenting the company's results on behalf of the management in English and Arabic and Arabic report will follow -- subsequently followed by a question-and-answer session, which will be answered by Mr. Mohammad Arif. Mr. Zaid, please proceed.

Thank you, Laura. I hope everyone can hear me well. I would like to start with the English presentation first, then we will have an A presentation as well. Good afternoon, everyone, and thank you for joining us for Aamal Company's results presentation for the 6 months ended 30 June 2025. My name is Zaid Shelleh, Investor Relations Managers at Aamal, and I am joined today by our Accounts Manager, Mr. Mohammad Arif. We will be walking you through the key highlights and financial performance for the first half of the year, and we will be happy to take your questions at the end of this presentation. You can follow along using the slide deck available on Aamal website, which also available for download. Allow me to begin with the highlights on Slide 2. The first half of 2025 saw continued strong performance across the board with net profit up 18.1% year-on-year. We saw revenue growth across all business segments with particularly -- with strong contribution from property and industrial manufacturing, both of which benefited from the recent strategic initiatives. Our Trading and Distribution segment continued to play a vital role in supporting Qatar's health care system by introducing new product to the market. We also secured new contract wins, pushing our order backlog beyond QAR 3 billion. A key milestone was the announcement of Aamal to establish a new Saudi Arabia entity, which enhances our regional exposure and diversifies our revenue stream, well aligned with the opportunities emerging from the Qatar's Third National Development strategy. Turning to Slide 4, financial summary. Our performance was underpinned by a strong showing in industrial manufacturing, driven by increased construction activity and participation in major infrastructure projects. Overall, revenues rose by 2.4% to reach QAR 1.07 billion compared to the same period of last year, while attributable net profit increased by 17.5%, rising from QAR 188.4 million in 2024 to QAR 221.3 million in 2025. The Property segment also delivered robust results with high leasing and occupancy rate contributing to revenue and net growth -- net profit growth, I'm sorry. Turning to Slide 6. Revenue in this segment grew 3.2% year-on-year, reaching QAR 92.1 million. The growth was largely driven by Aamal Readymix and Aamal Cement, both of which benefited from the new projects and improved gross profit margins. Aamal Maritime also saw improved profitability following the elimination of vessel operations cost. Frijns contributed positively, and the segment continued to benefit from the involvement in major energy and infrastructure projects. A highlight was the QAR 1 billion at El Sewedy Cables project with Kahramaa, which significantly contributed to our QAR 3 billion projects backlog. Senyar Industries also saw strong volume growth, supported by its involvement in Kahramaa and North Field projects. Senyar Industries also saw strong volume growth, supported by its involvement in Kahramaa and North Field projects. Looking ahead, the segment, the planned Saudi Arabia business is expected to open up new growth opportunities. Turning to Slide 7, Trading and Distribution. This segment delivered a flat overall performance with revenue up just 1% to reach QAR 756.8 million. The subdued performance was primarily due to Aamal Medical, which faced a drop in demand from key sectors. However, Ebn Sina Medical performed well, achieving organic revenue growth and strengthening its competitive position through its new supply and partnership agreements. We continue to support the development of the Qatar health care system by introducing advanced health care and pharmaceutical products. Aamal Trading and Distribution also performed well, driven by successful promotion and market share gains. We will see further growth potential here in this sector, thanks to our customer-centric approach and strong market positioning. Turning to Slide 8, please, and the Property segment. The Property segment was the standout performer in the H1 2025, showing a 7.7% increase in revenue to reach QAR 170 million. The segment delivered an impressive performance marked by notable growth in both revenue and net profit. This reflects the strength of our diversified property portfolio. Occupancy and leasing levels remain robust across all assets, underpinning the continued demand for our high-quality spaces, Aamal Real Estate reported a marginal dip in revenue and net profit, primarily due to ongoing renovation works at selected residential properties and investment expected to enhance long-term value. City Center Doha maintained its strong leasing momentum, supported by recent upgrades that have significantly improved the customer and tenant experience. The mall also benefited from the additional -- the addition of new tenants following a 4,000 square meter expansion and targeted initiatives aimed to boosting its appeal to both shoppers and retailers. Looking ahead, the segment is well positioned to capitalize on competitive rental offerings in prime locations, ensuring continued growth and resilience in dynamic market. Turning to Slide 9, the Managed Services. The Managed Services segment delivered year-on-year revenue growth and modest increase in net profit. Despite ongoing market challenges, revenue was up a modest 2% to reach QAR 80.7 million during the half year. There was a downward pressure on profitability at Aamal Services, MMS and ECCO Gulf due to severe price competition and nonrecurring orders. Maintenance Management Solutions, MMS, faced with difficult comparables rising from completion of several ad hoc projects completed in the first half of 2024. There was a strong performance at Family Entertainment Center as effective marketing campaigns and facilities improvements allowed the business to capture higher demand during Eid and the school vacation periods. Turning to Slide 11 and the summary and outlook. Strong first half year reinforced confidence in Aamal value creation strategy and its resilience diversified structure. Demand supported revenue growth across all segments and substantial growth potentials presented by the Qatar National Vision 2030. Significant new contract wins supplemented an impressive projects backlog. Aamal remain resolute in pursuit of organic and nonorganic growth while strengthening our competitive positioning and gaining enhanced exposure to attractive regional markets. There are many dynamic new opportunities related to creating a new Saudi Arabia business. We remain committed to improving operational efficiency and implementing innovation throughout the portfolio. We are well positioned to maintain H1 momentum over the rest of the year and committed to generating sustainable value for all our stakeholders and committees. This concludes our presentation, and we now welcome any questions you may have after we finish the Arabic presentation. Laura, could you please present the Arabic presentation? Thank you. Okay. If you can go to Slide 2 right away, I would appreciate it. Thank you. [Foreign Language]

Thank you, Mr. Zaid. Thank you everyone. [Operator Instructions] Yes Mr. Zohaib, please go ahead.

So recently, you have acquired a tower in Onaiza. Could you tell us how are you planning on financing this deal? And when do you think will be -- this will be finalized? That's my first question. The second question is on the industrial manufacturing. So it seems that the main bottom line growth is coming from your associates. And correct me if I'm wrong, this is due to the cables project and the metal business. So could you give us some idea if this is more of a recurring business or this is a contract which is maturing and that's why we're seeing significant growth in your JV business?

[indiscernible].

I am sorry, I did not hear anything.

Can you hear me now?

Yes, now I can hear you.