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

Hello, everyone. This is Zaid Nassar from the Corporate Communications team of Aamal Company. I hope everyone is doing well today. I want to welcome you to Aamal Company's 2026 6 Months Financial Results Investors Call. On this call, we have Mr. Mohammad Arif, the Financial Controller of Aamal Group; and Mr. Zaid Shelleh, the Investor Relations Manager. 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. Subsequently followed by a question-and-answer session, which will be answered by Mr. Mohammad Arif. Mr. Zaid, please proceed.

Good afternoon, everyone, and thank you for joining us for the Aamal company results presentation for the 6 months ended 30 June 2026. My name is Zaid Shelleh, Investor Relations Manager at Aamal, and I'm joined today with you -- I'm joined today by our Corporate Financial Controller, 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 the presentation. You can follow along using the slide deck available on Aamal website, which also available to download. Let's begin with the highlights on Slide 2. The first half of 2026 was marked by more challenging operation environment. Group revenue declined by 1.9% year-on-year and net profit decreased by 12.9%. Nonetheless, gross profit remained broadly stable, demonstrating the resilience of Aamal diversified portfolio. Within Trading and Distribution, performance was affected by evolving health care procurement policies and the continued shift towards generic medicines. However, underlying demand for medicines and medical supplies remains strong. Industrial and Manufacturing was impacted by lower project deliverables at Senyar Industries. This was partly offset by encouraging progress at Advanced Pipes and Casts, where the operational turnaround continued to gain momentum. The Property segment also delivered a revenue growth supported by additions of Aamal Tower and continued investments across the portfolio. Looking ahead, we remain focused on potential improvements, disciplined execution and the long-term development of the portfolio. Turning now to the financials on Slide 4. Revenue declined by 1.9% to reach QAR 1.05 billion, while gross profits remained stable at QAR 262.1 million. Net profit attributable to Aamal shareholders decreased by 12.9% to reach QAR 192.7 million. Revenue growth across industrial manufacturing, property and managed services, partly offset softly by softer performance in the trading and distribution. However, the net profit was negatively impacted by reduced project deliverables at -- deliveries at Senyar Industries. Within the period, gearing increased to 9.77%, primarily due to the acquisition of Aamal Tower, while higher capital expenditure reflected renovations and maintenance works across the property portfolio. Turning to Slide 6. Revenue in Industrial Manufacturing segment increased by 2.6% year-on-year to reach QAR 94.5 million, while net profit declined by 23.3% to reach QAR 25.3 million, with the decline in profitability driven primarily by the delays in project deliveries at Senyar Industries. Aamal ReadyMix and Aamal Cement both achieved revenue growth following the mobilization of new construction projects. Aamal Cement also delivered a strong improvement in profitability, supported by changes in raw material specifications and suppliers rebate, while Aamal ReadyMix was affected by the pressure on gross margins. The turnaround at Advanced Pipes and Casts continued to gain momentum with substantial revenue growth and stronger contribution from the Saudi Arabian business. Frijns also delivered an improved contribution following project wins secured during the second quarter of -- the second half of 2025. Looking ahead, the outlook remains encouraging with continued focus on operational improvements, efficiency gains and successful delivery of project pipelines across Qatar and the wider region. Turning to Slide 7. Revenue in Trading and Distribution segment declined by 3.9% year-on-year to reach QAR 727.4 million, while net profit decreased by 7.5% to reach QAR 49.6 million. Performance was mainly affected by the health care sector's continued shift towards generic medicines. Despite lower revenue, Ebn Sina Medical maintained a stable gross profit performance. The business also commenced its negotiations regarding a potential acquisition to expand Aamal's exposure to domestic pharmaceutical manufacturing. Aamal Medical delivered strong growth in both revenues and profitability, supported by increased demand for medical equipment from government and private sector customers. Looking ahead, stronger -- strong underlying demand for medicine and medical supplies, together with continued growth at Aamal Medical should support the segment's future performance. Turning to Slide 8. Revenue in Property segment increased by 3.5% year-on-year to reach QAR 176 million, while net profit declined by 6.9% to reach QAR 129.2 million. Revenue growth was supported by the addition for Aamal Tower, while profitability reflected by softer contribution from City Center Doha and interest costs associated with the financing of the acquisition of Aamal Tower. Aamal Real Estate delivered strong revenue growth, benefiting from the contribution of Aamal Tower and the continued strength of the wider portfolio. City Center maintained a resilient performance despite a slight reduction in occupancy rate and delays to several contract renewals. Ongoing investments at the mall also promises to further enhance its attractiveness to both retailers and visitors and support sustainable long-term performance. Looking ahead, stronger leasing activity is expected during the second half of the year, supporting rent retail income and further growth across the segment. Turning to Slide 9. Revenue in the Managed Services segment increased by 6% year-on-year to reach QAR 85.5 million, while net profit declined by 6.7% to reach QAR 9 million. Revenue growth was driven by strong performance at Maintenance Management Solutions, MMS, although profitability was affected by softer contribution from Family Entertainment Center. Maintenance Management Solutions, MMS, delivered strong growth in both revenue and profitability following new contract wins during the period. Aamal Services also remained resilient despite challenging market conditions with improved gross margin supporting higher profitability. Family Entertainment Center recorded softer performance, reflecting lower footfall and higher depreciation costs. Looking ahead, continued momentum at Maintenance Management solutions and Aamal Services should support the segment future performance. Turning to Slide 11 and to conclude, the first half demonstrated the resilience of Aamal's diversified model despite a more demanding operating environment. The group continued to deliver solid underlying performance supported by disciplined execution and the strength of its position across broader range of sectors. We remain mindful of potential near-term macroeconomic and market challenges. However, the diversity of our portfolio, together with our focus on operational improvement and cost controls leaves Aamal well equipped to respond to changing market conditions. Over the long term, we remain confident in the Qatar economic prospects and the opportunities emerging across health care, infrastructure and energy. We will continue to pursue growth in a disciplined manner both in Qatar and across the wider region while maintaining our commitment to create sustainable value for shareholders and the communities in which we operate. This concludes our presentation in English. I will start the Arabic presentation. [Foreign Language]

Thank you, Mr. Zaid. Thank you, everyone. [Operator Instructions]

If anybody would like to unmute themselves and ask the questions, we will also open -- we welcome your questions. [Audio Gap]

Okay, everyone. Since there are no questions, you can end the call.

Okay. Thank you, everyone. This concludes today's conference call. You may now disconnect.