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

Hello, and welcome to Al Meera's conference call. Please note that this call is being recorded. [Operator Instructions] Thank you. Now I would like to hand the call over to Phibion. You may now begin.

Thank you, Mark. Good morning to you all. I would like to welcome you to the Al Meera Consumer Goods Company Earnings Conference Call for Q2 and 1H 2026. On the call today from Al Meera's management team, we have Abdelrahman Muayyad Khalil Aburub, the Finance Director; Fahad Bahzad, the Chief Strategy and Transformation Officer and also the IR Officer; and we have Suddenly Sanchez Babaran, the Accounting Manager. And as usual, we will first get an overview of the performance from the management. And then after that, we have a Q&A session. Let me now turn over the call to Suddenly Sanchez to begin over to you. Go ahead, ma'am.

Thank you, Phibion. Good day, everyone, and thank you for joining Al Meera's conference call for the 6-month period of 2026. I will begin with a summary and the group financial performance for the period ended 30 June 2026, followed by additional commentary on the key movements. We will then open the call for questions. For the first half of 2026, Al Meera delivered a solid operating performance supported by continued growth in sales, improved gross profitability and higher contribution from rental and other income. Consolidated sales reached QAR 1,592.4 million for the 6-month period ended 30 June 2026, representing growth of 5.6% for the same period in 2025. This performance reflects the resilience of the group core retail operations and the continued development of its digital channels. Gross profit amounted to QAR 304.3 million, an increase of 12% year-on-year. Gross profit margin improved to 19.1% compared with the same period last year, reflecting better margin management, product mix and commercial discipline. Rental income increased to QAR 42.9 million compared to QAR 38.4 million in the prior year period, while other income increased as well to QAR 16.2 million from QAR 14.1 million. These income streams continue to support the group's overall earnings profile. Operating expenditures were QAR 204.2 million, an increase of QAR 8.5 million compared with QAR 197.6 million for the same period in 2025. The increase reflects the cost base required to support business activity, including investment in digital channels to enhance customer experience and growth. Overall, the group reported profit of QAR 67.7 million and earnings per share of QAR 0.33 for the 6-month period ended 30 June 2026. That concludes our prepared remarks for the period. Thank you for your time and continued support. We will now open the floor for questions.

[Operator Instructions] Your first question comes from the line of Wei Chow from Al Rayan Investment.

I have 2 questions. The first one is on the gross profit margin. Could you just give us some color on why the gross margin has expanded to 19%? What's driving that? And do you see that sustaining over the remaining half of the year? Second question is on the supply chain. Any comments given that we are almost 6 months into the conflict? Are you seeing any further disruption from the last quarter?

For your question, this is Fahad Bahzad. I'm going to take both of your questions. Regarding the gross profit margin, it's supported by better product mix, more pricing discipline as well as better cost management that we have. And hopefully, we will try to sustain it in the coming quarters as well. Regarding your question about the supply chain management, we are seeing some more -- the extension of this contract is affecting us, but this is something that has to be evaluated on a continuous basis. And as the situation evolves, we continue monitoring it, and we will be managing it and addressing it accordingly.