Al Suwadi Power Company SAOG (SUWP) Earnings Call Transcript & Summary

Good morning. Welcome to Al Suwadi Power Company discussion session. We are going to discuss the financial results of the last 6 months of 2025. So the agenda of today's discussion is first, we will discuss about the health, safety and environment and the corporate social responsibility of the company, the company performance for the last 6 months, and we'll also talk about the future strategy and plan for the company.

Okay, starting with the health, safety and environment that remain the top priority for the company. We have completed 5,111 days without -- [ no sign ] accidents. And also, the company have maintained full compliance with international standards: ISO 14001, which is for the environmental management; and ISO 45001 certificate, which is for occupational health and safety; and also ISO 9001, which is related to the quality management. And also the HSE leading grading indicator illustrate our broad safety capture across for the capital is, as you can see from the triangles. Thank you.

Okay. For the CSR, the company has allocated an amount of OMR 50,000 for the CSR initiative for the year of 2025. As for the Ministry of Commerce and Industry Investment Promotion decision, the company contributed 20% of the CSR budget to Oman Charitable Organization. This amount is OMR 10,000. Second, in collaboration with Al Batinah Power, the company signed a contract with Ministry of Education to sponsor cybersecurity awareness program. The school cybersecurity team project represents a strategic investment in Oman's digital future, targeting the development of technically-aware generation by training school students in basic cybersecurity skills, from Grades 5 to 11. The total cost of the project is OMR 40,000. Next, in collaboration with other companies in Barka, Al Suwadi Power is under discussion to establishing a park and walkway. Al Suwadi contribution to the project is OMR 15,000. Next, in collaboration with Al Batinah Power, the company is in process to fund the installation of solar panels at [ Sombra ] school in [ Samai ] in partnership with the Ministry of Education. The initiative promotes adoption of renewable energy within the educational sector. The total cost of the project is OMR 3,000, and the Al Suwadi contribution is OMR 1,500. For the balance amount, the company will be exploring initiative, where our employees volunteer in supporting the community in different ways. Thank you.

The company performance and trend analysis. We are pleased to share with you the continued excellence in our brand's operation and performance. As you can see from -- the brand reliability has remained exceptional, recording 99.93% in 2024 and 99.70% in the first half of 2025 despite operating at high load factor. This reliability directly enhanced the financial performance and load factor or [indiscernible] also continue to demonstrate high, raising to 77.7% in the first half of 2025 due to its high ranking in the great order. And the thermal efficiency also showing the blend involvement, which also enhances the operation and financial performance.

The next is the financial performance for 6 months. As you can see, overall, the results are better than last year. Revenue has increased, mainly due to the annual [ 3% ] escalation in the gas finances, which we get reimbursed by [ PWB ]. Then there was a higher plant load factor leading to a higher fuel charge and also higher indexation. Similar reasons, operating costs also increased because of the annual gas price increase and flat load factor. Finance cost is decreasing over the years as the loans are getting repaid. Our loans will be fully repaid in September 2027, much before the end of expiry of our current [indiscernible], which is March 2028. Overall, if you see the net income, it is higher by 4.7% compared to similar period over the last year.

On the future strategy and the plan, so firstly, the dividends. The company distributed dividends in June 2025, and will also be able to make dividend distribution subject to the availability of cash and fulfillment of other convenance agreed within the finance [ documents ]. [indiscernible] attendance. In the coming 2 [indiscernible] periods, which is '25, '26 and '26, '27, it is planned to carry out major maintenance for one gas turbine and sea turbine respectively, which will result in higher maintenance costs. On the PPA extension, the company is continuously exploring the possibilities of it's PPA extension with [ PWB ]. We have listed here some opportunities and challenges the company are facing. On the opportunities. We have more efficient plants. We are currently in the high [indiscernible] per site. [indiscernible] is expected in '28 based on the current order payment schedule. We expect high demand growth, which would put our plant on the requirements. The fact that other [indiscernible] companies put extension, it gives us better hope that we also get something like that. There are challenges. Of course, there are emerging new technologies. The renewables are coming. So that puts us our plant under the challenge. The spot market rules, still evolving. Our PPA is expiring in 2028. So that's the challenges which we are facing, and we should work on that.

With this, we come to the end of our presentation. And the usual disclosure that the presentation is not and should not be construed as an offer invitation or recommendation in respect of company's securities. Neither this presentation nor anything stated in it shall [indiscernible] contract or commitment. This presentation is not intended to be relied upon as advice to investors, and does not take into account the investment objectives, [indiscernible] situation on deals of any investor. Any future outlook, statements or comments are associated with known and unknown risks and uncertainties. Hence, this presentation provides no guarantees or commitments for any future results, nor explicitly nor implied. The financial information included in this presentation is on public knowledge disclosed to the MSX, and is for information purposes only. So we now open the floor for questions, and I would request that kindly introduce yourself and then you may ask your questions. [Operator Instructions] Any questions, please? [Operator Instructions] So we are finished with our presentation and we are waiting for any questions which you may have. [Operator Instructions]

There's no questions. We may end the session.

Okay. Sure.

So thank you for attending this session. As you have no more questions, so we will end this session, and thank you all. See you next time.

Thank you.