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

Hello, everyone. This is Angel Al-Bassar from the Corporate Communications team of Aamal Company. I hope everyone is doing well today. I want to welcome you to Aamal Company's 2025 Year-end Financial Results Investors Call. On this call, we have Mr. Mohammad Arif, the Corporate Financial Controller; 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, then an Arabic report will follow, followed by a Q&A session answered by Mr. Arif and Mr. Zaid. Mr. Zaid, please proceed.

Thank you, Angel. Much appreciated, much appreciated. Before we begin today's presentation, we would like to acknowledge the challenging events currently facing Qatar and extend our sincere compassion to all the individuals and communities in Qatar, which have been affected in these events. The well-being of our stakeholders is our primary concern. We encourage everyone to continue following the safety procedures and advice being issued by the official government sources. God bless Qatar, and we hope this conflict will resolve soon. [Foreign Language] Good afternoon, everyone, and welcome to this presentation of Aamal Company's results for the full year ended 31 December 2025. My name is Zaid Shelleh, Investor Relations Manager at Aamal, and I will be leading today's presentation, alongside Mr. Mohammad Arif, Aamal's Financial Controller. After this presentation, we will both be available to answer any questions you may have. Accompanying this call is a short presentation available for viewing and download from the Aamal's website. I will begin by summarizing the highlights of Aamal 2025 as set out in Slide 2 of this presentation. We delivered a solid overall performance in 2025, achieving a 2.5% increase in attributable net profit. Strong results from the Industrial Manufacturing and Managed Services proved center to this performance with good profit progression in those segments, helping to offset the slower growth in other areas of the portfolio. This once again highlights the benefits of Aamal diversified business model and the company's disciplined approach to navigating dynamic market conditions. Within this year, Aamal continued to deliver a significant strategic progress, further enhancing the company's future readiness and competitive positioning throughout prudent and wide-ranging initiatives. Key developments include the maturation of Aamal Energy business through multiple partnerships and commercial agreements. This have created a substantial opportunity pipeline centered on buoyant oil and gas sector, and Aamal Energy is now well positioned to begin capitalizing on high-growth market. Elsewhere, the acquisition of Golden Tower, now known as Aamal Tower, was major enhancement to Aamal's property portfolio, providing an exposure to attractive Onaiza district in Doha. Beyond this, the company remains tightly focused on disciplined financial execution, advanced operational efficiency and ongoing enhancement for product offering across our various businesses. The strong base strategic delivery has been enabled largely by positive market backdrop, and we continue to view the macroeconomic environment in Qatar and the wider region as highly supportive to our future growth. As such, we maintain positive outlook for 2026 and beyond as we look to expand into both new and existing markets. Turning to Slide 4, and our 2025 financial highlights. Despite the challenges posed by the evolving market dynamics, we are pleased to note that attributable net profit rose by 2.5% to QAR 443 million with gross profit flat year-on-year. Revenue did decline by 5% in the year, and this was largely a result of challenging market dynamics and competitive pressure experienced in the Trading and Distribution segment. Despite this, robust and profitable performances from Industrial Manufacturing and Managed Services alongside with the steady results from the Property segment allowed Aamal to deliver another year earnings per share growth. CapEx and gearing both increased in the period, and this was primarily due to the acquisition of Golden Tower and related facility loan alongside renovation work completed by City Center Doha. In light of the solid performance achieved in 2025 and the strength of the company's balance sheet, the Board is proposing a 2025 dividends of 5% to be approved by the General Assembly at the company's next AGM scheduled to take place in April 2026. Turning now into each of our segments. 2025 was a strong year for Industrial Manufacturing with the segment able to deliver a 5.1% increase in year-on-year revenue to reach QAR 198.7 million and a 23% increase in total net profit to reach QAR 76 million. This followed robust performances across several of the segment businesses, in particular for Senyar Industries, which benefited from the ongoing involvement in the North Field and Kahramaa projects. Doha Cables also achieved a significant growth in export, which increased 296% in the year and helped offset weaker domestic demand. This came alongside with the completion of the new CCV line, which will allow the Doha Cable to manufacture a 400-kilovolt cables to compete across the full transmission spectrum. Elsewhere, Frijns saw an increased profit despite supply chain challenges as investment in new fabrication process helped to increase throughput and reduce man hours. Aamal Cement also improved profitability off the back of raw material optimization initiatives and the position -- and its position to continue performing well after launching an interlocking paving range and signing new supplier agreements for several Ashghal projects. Looking ahead, the Industrial Manufacturing segment is strong positioned. Project momentum is building, recent strategic movements are paying off and the opportunity pipelines remain solid. In addition, maturation of Aamal Energy is even adding more strength, putting the segment in a greater place to meet rising demand in the oil and gas sector and unlock future attractive growth. Turning to Slide 7 in Trading and Distribution. Our Trading and Distribution recorded a subdued result in the period with year-on-year revenue and net profit declining 8.4% and 3.4%, respectively. This was mostly attributable to the challenging market dynamic impacted the segment medical businesses. Ebn Sina Medical faced tough pricing pressures as a result of the national shift towards non-brand generic medicines and delay in mandatory insurance rollout in the country. Meanwhile, Ebn Sina Pharmacy also experienced a step-up competition, particularly from the beauty and cosmetic stores opening in neighborhood retail outlet. Aamal Medical's performance was overall in line with 2024, and the business focused on actively bidding on new projects as a means to offset slow deliveries amongst repeat customers. Finally, Aamal Trading was able to record stable year-on-year revenue and net profit, winning new tenders across diverse sectors and completing upgrade of its warehouse racking system. Looking ahead, the Trading and Distribution segment maintains a positive outlook with businesses well positioned for continued recovery. Ebn Sina has strengthened this momentum by securing 17 new distribution arrangements and achieving approval on most of its 1,000-plus applications submitted in 2025. Combined with strong focus on meeting customer needs through highly quality product offering, the segment is well placed to capture future growth. Moving to Slide 8, and the performance of our Property segment. Aamal Property segment delivered a modest positive result in 2025 with revenue up 1.7% to reach QAR 334 million and total net profit growing 1% to reach QAR 253.1 million Strong leasing activity and consistently high occupancy rate continued to support solid cash generation across the portfolio. City Center Doha also performed well, benefiting from the recent 4,000 square meters expansion, which added 39 new shops and helped to lift footfall throughout broader and more attractive retail mix. Aamal Real Estate further strengthened its portfolio through strategic investments, including the acquisition of Golden Tower, adding 130 commercial and residential units in a high demand area, Onaiza area. With ongoing upgrades, enhancing asset quality and the talent experience, the outlook for the segment remains positive, supported by the increasingly competitive retail offering. Turning to Slide 9, and our final segment, Managed Services. Aamal Managed Services segment recorded a standout performance in 2025. Strong performance from all businesses units enabled a 5% increase in revenue to reach QAR 170 million alongside a 4.2% increase in net profit to reach QAR 20.8 million. Contract wins at Aamal Services and Maintenance Management Solutions were a key driver, supported by growing demand for fit out, retrofit and refurbishment work, including new offerings such as drone facade cleaning. The performance at Aamal Travel and the Family Entertainment Center also remained resilient and adopted well to competitive pressures, with the former continuing to grow its corporate customer base and expands its Visa assistance services. With rising inbound tourism and ongoing government development initiatives, the segment enters in near term with abundant opportunities and a strong momentum. To summarize, Aamal is pleased to be closing the year with strong momentum, reflecting both disciplined strategic and operational execution alongside the continued optimization of our portfolio. The group has strengthened its operational capabilities, expanded its export presence and deepened its alignment with fast-growing sector such as infrastructure and oil and gas. These efforts have reinforced the resilience and agility of our business model and ensure that we are well positioned to capture emerging opportunities. We have also continued to broaden our reach throughout strategic partnerships, the new joint venture with Mohammed Al Barwani Oil and Gas Services company marks an important step in expanding into oil and gas energy services. While our collaboration with the Germany's Niedax Group opens the door for attractive opportunities in cable management systems and industrial solutions across multiple markets. Alongside the robust pipeline supported by further contract wins and new product offerings, these initiatives underline our confidence in the region's long-term growth trajectory. Looking ahead, we remain positive in Qatar economic outlook throughout 2026 and beyond as the country continues to advance the nation development agenda. We see significant potential for Aamal to contribute to the next phase of growth with clear strategy, strong partnership and commitment to delivering sustainable services. Aamal is well placed to keep generating long-term benefits for all our stakeholders and continuing reserve -- and the communities we serve. This concludes our presentation. Mr. Mohammad Arif and we now welcome any questions you may have. I will start my Arabic presentation. [Foreign Language]

Thank you, Mr. Zaid. Thank you, everyone. [Operator Instructions] Okay. I think there are no further questions. Thank you, everyone. This concludes today's conference call. You may now disconnect.