Al Maha Petroleum Products Marketing Company SAOG (MHAS) Earnings Call Transcript & Summary

Hello, [Foreign Language]. Good afternoon. Maybe there is no one online. Okay. Let us discuss the financial results for the Q2 for Al Maha Marketing Petroleum Company. These results is representing the last 6 months of 2025. I will leave the discussion or the explanation to Mr. Hiriyanna, the CFO of the company. Would you please go ahead with the results.

Yes. [Foreign Language]. Good afternoon, everyone. Now -- yes, we have disclosed all the financial reports and definitely financial statements in the market. So I hope you've all gone through those reports, and so you have the full information. It's given in the Directors' report also. Now, just to brief you, take you into the first slide. We hope all of you are listening and can view the presentation. Basically, what we're talking about is the main macroeconomic factor. It's oil price, which is a decrease of around 10% compared to the average price -- oil price for the last -- 6 months of the last year to the 6 months of this price -- of this year. So while the domestic fuel prices remain the same. So that's one important factor. And coming to our financial highlights, our sales have gone down by 3%, mainly because of the decrease in the oil prices. So sales value have decreased. And correspondingly, the cost of sales also have gone down by 3%.

Both are the same.

Yes. So here, we discussed about -- we spoke about the oil price, which was $76.6 on average. It was around $82 in the first average price of last year, and it went down to $74, that's a decrease of 10%. As you can see, the domestic fuel prices have remained constant during both the periods. Now, we'll go to the next slide. And if you can see in the next slide, the financial highlights. Here, we can see the sales in rial Omani terms have gone down by 3%, mainly because of the decrease in the oil prices, where aviation and bunkering prices are subject to international prices. And cost of sales also has gone down by 3% proportionately. And our gross profit has gone up by 2%. Other income has gone down by 1%, and total expenses also has gone down -- reduced by 1%. So overall, because of the cost efficiency we achieved, net profit has gone up from OMR 3.090 million to OMR 3.363 million this year, so this half -- first half.

Which is 9%.

That's around 9% increase. That's around OMR 233,000. So this cost efficiency is clearly reflected in both the ratios, gross profit ratio, which has gone up from 5.4% to 5.6%, and net profit ratio also has gone up from 1.2% to 1.4%. These are brief highlights, and we'll go to the next slide, where you can see the growth by segments. Retail segment has achieved a 1% growth in sales volume, and commercial sales has gone up by 7%. Aviation segment volume growth has gone down by 22%. Lubricant segment has gone up by 2%. And NFR segment, which is part of other income, has also gone up by 3%. And all these are discussed clearly in the financial statements, which we represented, and the Board of Directors' report we submitted. So basically, this is your session. We invite you for any questions that you may have. And so the floor is open for you. If you have any questions, please -- we invite you to ask. And so we are very happy to answer your questions. Yes. Over to all of you.

And there is nobody there.

There are some -- few people. I hope if they have any questions they can ask.

These results are already published.

Yes. It's already published and presented.

Yes. [indiscernible] also.

I hope nobody has any questions. And if they have any questions, we welcome you to ask.

Of course, the company is growing up from the networks. We had until now more than about 6 fuel stations, which is including service centers in different governments, in Muscat, Dhofar, Batinah and other garments. Also, we are in -- or do a revamp for the network we have and continuous also rehabilitation for these fuel stations keep up to date to attend the services required from it. The company expanded also in the bunkering. We are really doing good. In lubricant, we are doing excellent, thanks for lubricant team. We are now not only in Oman, we are available also in Africa and also other parts of neighbor countries. Planning of the Al Maha to do business in lubricants, like establishing packaging systems for the Al Maha brand here in Muscat in Oman. And this is mainly for Omani local market and also for international exports. Our expansion in Saudi Arabia is going well. As maybe well announced before, we are doing their business as a franchise. And this network has increased. Now, we are -- already opened the first service center and fuel stations in North Riyadh, 17 under construction and will be ready soon. Also, there is a negotiation with the investors there to acquire 152 stations in north of Saudi Arabia and also mainly in the Sharqia region there. And we hope we are -- as you can see, the result will be very positively to the revenue of the company. We have other business, which is going on, nonfuel business, which is really growing up, as you can see from the results. [Technical Difficulty]

Hello. Good afternoon, everyone. We're sorry. We had some technical glitch up, and we'll start again, and we'll go to the...

Okay. Did you -- I mean, with us before the disconnection happening, if you are with us that time, so I think we already explained the results of Q2 for the Al Maha and also our business plan for the last 6 months and also the coming 6 months of this year -- or coming -- remaining of the year. So if you have any questions, please go ahead, and we are happy to answer it as much as we can.

And all the financial statements have been published in the website, and the Directors' report has also been published containing all the details. I hope you have all gone through that. So this is your forum. If you have any questions, please let us discuss, and we're happy to answer any of your questions. Please go ahead.

Hello. Do anyone hear us?

One of the issues that was raised a time back was the continuity of the domestic oil prices at the same level of last year. So how long do you think the government will keep the price fixed? Is there any indication of at least...

I think this will continue for up to the end of this year. We have -- there is nothing to indicate that it could be also continued for the 2026. But all the, I mean, indications we have, it could be also going on the same price for 2026. But from the government, officially, there is nothing. Yes.

And also on the oil prices, the effect on the oil prices, mainly I'm talking about the U.S. tariffs. So do you think directly or indirectly it affects -- is going to affect the oil prices?

Yes. Somehow, but these tariffs is not 100% applied everywhere as announced. But in the same times, we've seen there is a reduction in the consumption of the crude oil internationally. Although the OPEC yesterday, they increase -- they tried to increase and cover some of the shortage happening somewhere in the world, but still, the price is almost stable could be, as we have the indication internationally, and I read in the papers, some of the period of this Q or Q2, then the second Q of this year or third Q and fourth Q, there will be a reduction in the price of the crude. But that doesn't affect the permanent tariff or the fixed tariff now we are working in. It is affecting our international price used mainly for the aviation and lubricants and bunkering also. That could affect the business if the price drop in between and there is some storage somewhere, that could affect us positively or negatively. Same time, if the prices gone up suddenly, this also -- consumption could be affected because that's needed to be reacted and fastly. And the price, as per the plant we have, it's every 15 days changing. And this is -- yes, could affect our net -- bottom net. But it could not be that much. I'm not that worried to be here -- I mean, there's a big impact.

Will there be any impact of electric vehicles or other entrepreneurs, like energies in the...

Yes, there is a lot of strategy going on, and there is a lot of -- I mean -- but still a lot of talk for these projects, but this will not affect for the next 5 to 10 years, like the businesses still heavily depend on the refined fuel, even internationally. And that will continue. In Oman, this is not that effect because the growth of the vehicles or motor vehicles on the roads is also observing the growth in the green mobility. But maybe long term, yes, that's why we are establishing, as you know, Mr. [indiscernible], our business plan, there is an objectives of diversification, meaning diversification, trying to diversify in the revenue and not heavily dependent on the fuel products to protect the investors', of course, money and also to sustain the company in the future, especially the coming future. I believe we have -- as an oil product marketing company, we have to also do and diversify to other activities within the location we operate. And also within the mobility requirement, within the energy requirement is usually we have to enter to the green mobilities and that it is must. And I'm always sure this green mobility, meaning 100% green, is not just shifting the conceptions from the fuel station to the gas turbine to produce electricity and supply to our electric vehicle. No, we need to be 100% green. We have to utilize the -- for example, the roof. We have on the stations to produce electricity, charging these vehicles. Also, we are in line with the charging and time consumed there during the charging. There is other activities supposed to be available. And that's what we are working on it now. The new service centers we have in the fuel stations is equipped to do that. Very soon, we are launching this electric vehicle charging. We just only signed an agreement or an MoU with the green mobility company to do these services. And also, there is other talk to other manufacturer of these electric vehicles for other types of or models of vehicle. And soon, you will find Al Maha everywhere having this fuel and also charging station for electric vehicles. This is really maybe by the end of the year, we have more than 29 locations, which is having these types of charging systems available, [Foreign Language]. So this is all part of the diversity of -- we have approved it by the Board in the business plan. So this is what we have. We are also looking forward very much in the Saudi market. It is really very, very good market, and there is a high potential to do also good business there and maximize the benefit of the company and also introduce our good services here in Saudi Arabia. As I mentioned, we are already under construction now 17 stations in negotiation for rebranding 150 fuel stations, including our brand of AMPRO to be introduced there in the service center there in Saudi Arabia. The first station already in operation in North Riyadh and is doing very well really, and the consumption is very high. It's almost 1-plus million a month of consumptions. And this is all sourcing our financial income in Al Maha. There is also -- we are looking very positively to our lubricant sides of the business. Lubricant actually is one of the stressing it in Al Maha. We are really insisting to go ahead with these lubricants. We are planning now to do our own packaging system here in Oman to introduce Omani product to international and the succession of the existing plan we have is really results, and we are available in Africa. We are available in Saudi, in Yemen area, in neighbor countries also. And this has also hit positively our financial results. So that's what we have for the time being. There is a new business going on, and that will be really maybe good to announce it or to share it with you in the next Q results, which is related to the service centers, and also, Al Maha branded service centers will be available for inspections of the vehicles everywhere in the country [Foreign Language]. That's what we have, and I'm looking forward for your questions, if there is.

We didn't hear any questions from the audience. I hope all the audience is listening to us. And if you have any questions, please ask us. Otherwise, we may probably close the session. Somebody is asking -- Mr. Deepak Radhakrishnan is asking about our guidance for station addition in the next 2 years. So what's our plan? How many stations we're going to add in the next 2 years?

In the next 2 years, actually, Mr. Deepak, we are planning, as we have the business plan we have and also the new franchise we are going to in Saudi Arabia, there are 2 separate projects. One of them for Oman. We are planning 8 stations to be added and also about 14 stations to be revamped and changing to a service center, including also fueling and charging system. We have also in Saudi Arabia, as I mentioned, about 152 fuel stations will be [Foreign Language] for the next 2 years is ready and operated. Anything else? Our new stations, actually -- and it is very -- I mean, even the revamp one on the existing, it's very carefully, especially now because we are also focusing in nonfuel business within the area of fuel. Very carefully, when we choose the location, the study, the feasibility study, and we -- our, I mean, main focus, if you notice it, is the -- where is high population and business, what you call this, availabilities. Also, we have very heavy dealing with the commercial sides of the fueling, which is for the oil fields and also construction place. Fuel is doing very well. We have fuel truck and services, as you know, and this is really one of the main sources in the company income, and it's really a success story. Yes, there is many obstacles happening, but still the business is really serving very successfully to all these, especially construction projects, which is -- need to be supplied by fuel daily on the locations. We have now 3 branches. We have Muscat, Sohar, Salalah and also in Duqm. Actually, it's 4 branches, not 3. No, no, no. If there is nothing, I mean, we have to stop now. Thank you very much for your listening, and we'll see you, [Foreign Language], by the end of the year for the financial results of 2025. All the best, and thank you for your listening and participation.

Thank you. Thank you so much.