Al Mahhar Holding Company Q.P.S.C. (MHAR) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. My name is Hamza, and I will be your host for today's investor call to discuss Al Mahhar Holding Q1 financial results. Thank you all for joining us. Let me introduce our speakers for today's call, Mr. Enzo Dellesite, our CEO; and Mr. Sunil Kumar, Director Finance and Corporate Affairs. In the end of the presentation, we will open the floor for questions and discussions. Please feel free to ask any questions related to the topic. Now Mr. Enzo will present Q1 financial results.

Thank you, Hamza. Good afternoon, everybody. Thank you very much. A very warm welcome to everybody joining us today for the conference call. We truly appreciate you taking time to be with us today. So thank you very much. My name, as Hamza said, is Enzo Dellesite. I am the CEO of Al Mahhar Holding. Now over the next few minutes, I'll take you through our key highlights from the past quarter, including our financial results, operational progress and updates on the strategic road map. Then I'll hand it over to Sunil Kumar, our Director of Finance and Corporate Affairs, who will take you through the financial details. And as always, you can refer to our full investor presentation, which is also now available on our website, which is www.almahharholding.com. I'd like to start by reconfirming the successful transfer of Al Mahhar Holding to the QSE stock market main market. So we transferred 2 months ago from the venture market to the main market. This really underscored company's financial strength, operational resilience and commitment to the long-term value creation, a significant milestone in the group's history. Now for some financial highlights. The first quarter of 2025 marked a strong start for the company, setting a new benchmark for performance. Revenue climbed 51% compared to the same period last year, reaching QAR 239.1 million. Revenue climbed -- sorry, excuse me, the Energy segment remains central to our continued success, accounting for QAR 85.4 million -- sorry, my apologies. I've just been put off. I'll start again. The first quarter of 2025 marked a strong start to the Al Mahhar Holding, setting a new benchmark for performance. Revenue climbed 51% compared to the same period last year, reaching QAR 239.1 million. The Energy segment remains central to our continued success, accounting for 85.4% of revenue for the quarter, slightly up from 84.4% in the previous year. This reaffirms our strategic direction and confidence in the energy sector's long-term value. My apologies for some of the commentary that's overshadowed the discussion. We also saw solid uplift in profitability this quarter. Net profit attributable to equity holders increased by 84%, reaching QAR 11.9 million, whilst overall, the net profit rose from QAR 6.2 million to QAR 12.8 million, representing a 108% increase. This resulted in an improved net margin -- profit margin of 5.4%, up from 3.9% in the same period last year. The Energy segment remains the primary driver behind this growth, reflected in the strong performance of Petrotec and its joint venture partners. Sunil will walk you through the financials in more detail shortly. Now beyond the numbers, the first quarter was also a period of real operational progress. We successfully inaugurated our Petrotec electrical and digital integration facility in Wukair. This was as a direct response to the growing demand from oil and gas and infrastructure sectors for locally made high-quality products. This facility helps strengthen Qatar's local supply chains, the in-country value and our own ability to serve local customers. The setup of this facility assists us to build on the new technologies and improve operational efficiency across the group. For any of you on this call today, if you'd like to better understand this, a visit to this magnificent facility will demonstrate to you our commitment to this industry. Looking ahead, Al Mahhar remains focused on its long-term growth priorities. Those major national development projects such as North Field expansion and Ras Laffan Petrochemicals continue to drive strong demand for engineered solutions, creating new opportunities across the energy landscape. These large-scale projects are expected to support sustained growth over the coming decade. As part of the ongoing strategy, we will continue expanding our service portfolio, strengthening our market presence and by levering its technologies to enhance efficiency, including solutions related to renewables, energy storage and electrification. So a mixture there of our traditional business with some new businesses in renewables, particularly energy storage. Our long-term plan will continue to shape how we grow, capitalize on the momentum we've built so far and reinforcing our leadership position in Qatar's energy sector. We remain committed to the strategic road map that guides us focus on expanding new capabilities, delivering service excellence and creating real and lasting value for our customers. That is our commitment. With that, I'd like to thank you all, and I would like to hand you over now to Sunil Kumar, who will take you through our financial performance in more detail.

Thank you, Enzo, and good afternoon, everyone. I'm Sunil Kumar, Director of Finance and Corporate Affairs at Al Mahhar Holding, and I'm pleased to take you through our financial performance for the first quarter of 2025. As you can see on Page 6 of our investor presentation, we delivered strong revenue growth this quarter reaching QAR 239 million (sic) QAR 239.1 million compared to QAR 157.9 million in the same period last year. This 51.3% growth was driven mainly by the subsidiary Petrotec's strong performance in the Energy segment, along with the good performance by Al Mahhar Kuwait. If you see on Page 7, you will see that the gross profit increased to QAR 40 million, up from QAR 31.1 million in the first quarter. Gross profit margin declined slightly driven by a higher proportion of sale of equipment as compared to services. We are pleased to report an 83.7% increase in net profit to equity holders reaching QAR 11.9 million compared to QAR 6.5 million last year. Looking at our net profit margin, it rose from 3.9% to 5.4% in the first quarter of 2025. This results in earnings per share of QAR 0.06 as compared to QAR 0.03 in the same period last year, almost doubling. As Enzo mentioned, this boost in profitability is not driven only by the growth in our Energy segment, but also driven by strong performance from our joint ventures and associates and our strategic shift away from infrastructure focused operations. On Page 11, if you look at the balance sheet, looks very strong. Between 31 December 2024 and 31 March 2025, the total assets rose by 16.1% from QAR 604.3 million to QAR 701.7 million. This uptick was driven largely by current assets, asset inventory, trade receivables and prepayments and cash and bank balances saw notable increases. At the same time, the total liabilities increased by 33.8% from QAR 251.1 million in December 2024 to QAR 335.9 million as of 31 March 2025. This is mainly due to increase in accounts payable and accruals and interest-bearing borrowings, which as of 31 March 2025 amounted to QAR 231.8 million and QAR 30.9 million respectively. Our liquidity remains robust with current assets of QAR 522.3 million and current liabilities of QAR 269.9 million. This results in a good liquid ratio of 1.5x and current ratio of over 1.9x demonstrating our financial discipline and positioning us well for future growth and investment opportunities. As we look ahead, we aim to maintain financial discipline and improve operational efficiency. As the business grows and new opportunities arise, we intend to continue managing costs carefully, optimize capital allocation and balance growth with profitability. We also aim to sustain strong margins while investing in areas that create long-term value alongside preserving a healthy cash position and following a prudent approach to debt. Thank you for your time, and we would be happy to take any questions.

Thank you, Sunil. Okay. I'd like to now open the floor up to any participants on the call to have any suggestions or any comments. Please introduce yourself and your company or institution you represent, and the floor is open. Can we go back to the first page to show the highlights. Are there any comments from anybody regarding results today? Okay. If there are no questions, I want to thank all of you for joining us today, and we look forward to welcoming you on our next earnings call where we'll share our first half results for 2025. Thank you very much.