Al Meera Consumer Goods Company Q.P.S.C. (MERS) Earnings Call Transcript & Summary

Hello, and welcome to the Al Meera Earnings Conference Call. I would like to advise all participants this call is being recorded. Thank you. I'd now like to welcome Phibion Makuwerere to begin the conference. Phibion, over to you.

Thank you, Gavin. Good afternoon to you all, and welcome to the Al Meera Consumer Goods Company's First Quarter of 2024 Earnings Conference Call. My name is Phibion, I'm from QNB Financial Services. On today's call, we have from Al Meera's management team Razan Rauff, the Finance Director; Indranil Goswami, the Organization & Business Development Director; Quennie Trajano, Manager Budgeting and Reporting & IR Officer; and we've got Jaylene Vibar, the Finance Manager. As usual, they will go with the performance, and we have a Q&A session immediately afterwards. I'll now turn over the call to Quennie to give an overview. Please go ahead.

Thank you, Phibion. Hello, everyone. Welcome to Al Meera's conference call for first quarter of 2024. We will be starting off with an overview of Al Meera's results for the period ended 31st March 2024 to be followed by updates on Al Meera's projects, then we will proceed to question and answer. The following are the financial highlights of the group for the first quarter of 2024. Al Meera recorded consolidated sales of QAR 789.8 million for the first quarter of 2024, an increase of 7.2% compared to the same period in 2023. Gross profit amounted to QAR 141.9 million. Gross profit margin was up 18% compared to 18.3% for the same period in 2023. Rental income is at QAR 21.6 million in 2024. Other income is at QAR 23.8 million compared to QAR 10.8 million for the same period in 2023. Operating expenditures is at QAR 102.7 million, and the overall Al Meera's net profit is at QAR 50.7 million and earnings per share is at QAR 0.25 for the 3-month period ended March 31, 2024. I will now give you an update on the group's operation. Al Meera's retail store expansion plans in Qatar and Oman are progressing as planned and are expected to be operational in 2024. The corporate and e-commerce sales segments are also being expanded based on market demand. I will now open the floor to question and answer.

[Operator Instructions] And your first question comes from the line of Ali Afifi from Arqaam Capital.

Just a quick question regarding the possible application of taxes. Have you heard anything regarding the potential application of corporate taxes in 2025? And how this would be -- or how Al Meera would be subject to that?

[indiscernible] tax.

We haven't [indiscernible] any formal notification of any taxes, so we have not assessed the effect of Al Meera.

[Operator Instructions] There are no further questions at this time. So I'd like to hand the call back to Phibion. Apologies, we had the next question comes from the line of Alessandra David from Ashmore.

I was just wondering about some of the margins -- you've got declined a little bit over the year. I was just wondering if you could elaborate a little bit on the driving factors behind that. One of the things that also stood out to me was your G&A expenses went up quite a lot. So I was just curious if you could provide a bit more color on that.

Okay. On the [ front ] margin, generally, I mean, our sales are -- are on the high side during Ramadan, and we run a lot more promotional sales during that time. So -- so that's why the [ dip ] is compared to last quarter, mainly because of additional promotion because of the Ramadan season. With regard to G&A, the increase is partly coming in from some of the infrastructure changes that we have done on the whole IT -- IT landscape because we -- prior to us moving into the new ERP, we had a CapEx model, which was on-prem. And now we have gone into a subscription model, which is on -- cloud based. So there is incremental cost coming in on that front. And also related to -- again, to the marketing side, because of Ramadan, we generally have a lot more campaigns during the period, and that also has contributed towards the increase in the G&A.

[Operator Instructions] There are no further questions at this time. So I'd like to hand the call back to Phibion.

Thank you again, Gavin. If there are no further questions, let's wrap up today's call. Thank you all for joining us. I'd also like to thank the management team for taking its time to update the market and respond to investors' questions. Should you have any further questions, feel free to reach out directly to the management team or to QNB Financial Services. Please join us again for future calls. Enjoy the rest of your day.

Thank you.

That does conclude our conference for today. Thank you for participating. You may now all disconnect.