Al Mahhar Holding Company Q.P.S.C. ($MHAR)

[Foreign Language] Good afternoon, ladies and gentlemen. My name is Hamza, and I will be your host for today's investor conference call to discuss Al Mahhar Holding Q1 financial results. Thank you all for joining us. Let me introduce our speakers today, Mr. Enzo Dellesite, our Group CEO; and Mr. Girish Puranik, General Manager of Finance. In the end of the conference, we will open the floor for questions and discussions. Please feel free to ask any questions related to that topic. Now, Mr. Enzo will present Q1 financial results.

Thank you, Hamza, and good afternoon, ladies and gentlemen, and a very warm welcome -- very warm welcome to everybody for joining us today for the Al Mahhar Holding Company's earnings conference call. Thank you for joining us. My name is Enzo Dellesite, and I am the CEO of Al Mahhar Holding. Now over the next few minutes, I'll take you through the key highlights from the past quarter, including our financial results, operational progress and updates to our strategic road map. Then I'll hand it over to Girish Puranik, our General Manager of Finance, who will take you through the financial details. And as always, you can refer to the full investor presentation, which is now available on our website, www.almahharholding.com. Well, the first quarter of 2026 marked a resilient start for Al Mahhar Holding, with revenue broadly stable compared to the same period last year despite the regional disruptions that emerged late February. Operationally, the temporary restrictions to the access to certain industrial sites and the disruption to shipping through the Strait of Hormuz had an impact on the supply of equipment and materials. In response to this, management acted swiftly by activating alternative supply routes and working closely with clients and partners to maintain continuity of operations and service delivery. These measures enable us to maintain our commitments to our customers and preserve overall operational stability. And at the same time, the performance of our service and rental divisions helped to partially offset these impacts. Now despite the broadly stable revenue during that period, we saw solid uplift in the profitability this quarter. Net profit attributable to equity holders increased by 21%, reaching QAR 14.4 million, whilst overall net profit rose from QAR 12.8 million to QAR 15.1 million. And Girish will walk you through the financial details in more detail shortly. During the first quarter of 2026, we also completed the divestiture of our 49% stake in Al Mahhar Al Kuwaittiya for light and heavy equipment and machines, following the approval by the Extraordinary General Assembly in late December 2025. This transition forms part of our broader internal reorganization of our Kuwait operations under which our activities have been consolidated under Petrotec Kuwait. We will continue to maintain our presence in Kuwait through our 49% interest, and that will shall remain our platform for in-country going forward. Looking ahead, Qatar's energy sector continues to offer meaningful long-term opportunity for this group, supported by ongoing investments in major national projects such as the North Field Expansion and Ras Laffan Petrochemicals Complex. These developments are expected to drive sustained demand for specialized equipment, services and technical capabilities that Al Mahhar offers. Our 10-year strategic plan remains focused on expanding our services platform, strengthening our client relationships and pursuing opportunities aligned with our long-term objectives, including the emerging renewable energy space and data centers. We will continue to be guided by our long-term plans, building on that momentum we've achieved so far and strengthening our position in segments we serve across Qatar's energy and infrastructure sectors. With that, I'd like to thank you again for joining us and your continued interest. I'll now hand over to Girish, who will take you through our financial performance in more detail. Over to you.

Thank you, Enzo, and good afternoon, everyone. I'm Girish Puranik, GM, Finance at Al Mahhar Holding. And I'm pleased to take you through our financial performance for the first quarter of 2026. As shown on Page 5 of the investor presentation, revenue remained broadly stable at [ QAR 238.7 million ] compared to QAR 239.1 million in the same period last year. Despite the regional disruption highlighted earlier, the stability was supported by an increased contribution from our service and equipment rental divisions, which helped offset a decline in equipment and spare part sales. As a result, the contribution from equipment and spares decreased from 82% in Q1 2025 to 78% in Q1 2026. As we move to Page 6, you will see that despite a slight decline in revenue, gross profit increased marginally to QAR 40.6 million. This improvement was primarily driven by higher contribution from the rental and servicing divisions, which carry comparatively higher margins. As a result, gross margin improved further to 17% compared to 16.7% in the prior year period. We are also pleased to report a 21% increase in net profit attributable to equity holders, reaching QAR 14.4 million compared to QAR 11.9 million in the same period last year. This translates into earnings per share of QAR 0.07, up from QAR 0.06 in the prior year period. The increase in profitability was primarily driven by the improved revenue mix as highlighted earlier, along with enhanced internal efficiencies, which contributed to lower general and administrative expenses, as well as reduced finance costs during the period. Overall, our net profit margin improved to 6.3% in the first quarter of 2026 compared to 5.4% in the first quarter of 2025. On Page 10 of the investor presentation, you will see that our balance sheet remains solid. Between 31 December, 2025 and 31 March, 2026, total assets rose by 6.8% from QAR 651.9 million to QAR 696.1 million. This uptick was driven largely by current assets, trade receivables and prepayments, and cash balances saw notable increase. At the same time, total liabilities increased by 8.7% from QAR 280 million as of 31 December, 2025 to QAR 304.5 million as of 31 March, 2026. This is mainly due to the increase in trade payable and other liabilities, which as of 31 March, 2026 amounted to QAR 235.1 million, up from QAR 204.4 million, further demonstrating our strong and favorable supplier and vendor arrangements. Our liquidity remains strong with current assets of QAR 500.1 million and current liabilities of QAR 250.6 million. This results in a quick ratio of over 1.5x and a current ratio of 2x, reflecting the company's financial discipline and flexibility. Looking ahead, we intend to continue managing cost carefully, allocating capital with discipline and balancing growth with profitability. We also aim to sustain strong margins while investing in areas that supports long-term value, alongside maintaining a healthy cash position and a prudent approach to debt. Thank you for your time. And we will be happy to take any questions.

Thank you, Girish. Okay. So, I'd like to open the floor for questions. I understand we also have some questions through the Investor Relations.

Actually, we have received from our Investor Relations team some questions. I'll start with question number one. Why do you believe that a flat year-on-year revenue result is positive, where you state there are many projects that are helping you grow?

Okay. We are comfortable with the flat revenue because we are coming on the back of 3 successive growth years, and we are each time reaching record revenues for the group. So in 2026, our focus was to increase by about 2.5% year-on-year whilst focusing primarily on our GP and our costs. And I think that's been reflected in Q1 where our revenue is flat, but our net profit has increased by 21%. So, we will continue to not chase revenue for the sake of chasing revenue, but we're going to be building on those most profitable businesses, which is our service and rental business, and we'll continue to drive down costs, particularly in this particular period we have a little uncertainty with the regional tensions that we are unfortunately having to suffer. So, that's really our position on that.

Thank you, Enzo. The second question is with all this regional uncertainty, what you can say to where you will finish in the first half of the year?

Thank you. Okay. Well, we don't often give forward-looking advice, and they're certainly not going to be able to do that today. The only thing I can say to that is that in my speech, we highlighted some fantastic collaboration between our customers and our partners. We have been able to navigate the uncertainty. We've been able to switch ports. We've been able to break down packages to sizes that can be air freighted. So, we've maintained our position as to where we want to be by the end of Q2. And we also negotiated the holy month of Ramadan in Q1 on top of the uncertainties and the war in that period. So, we feel the uncertainty is not going to help us, but we have a process. I personally chair a daily meeting to oversee the services, the rental and the incoming products so that we can make immediate decisions and do everything we can to meet our forecasted results.

Thank you, Enzo. If anyone wants to ask any question, please state your name and your company before asking any question. Thank you all for your participation in the conference call. If you have any more questions, please feel free to contact us by e-mail or con call. You can find all contact details at Al Mahhar Holding website, Investor Relations section. Thank you once again, and have a nice day.

Thank you very much.