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

Hello. [Foreign Language]. Welcome for Al Suwadi Power Company MSX discussion session. This is for the 2025 financial results. So welcome all to this meeting. We will be talking on this agenda. The Health, Safety, and Environment, and the Corporate Social Responsibility, the Company Performance in 2025, and what will be the Future Strategy and Plan. On Health and Safety?

Yes, starting with the HSE as it remains the top priority for the company. We are proud to report that as of December 2025, the plant achieved 5,294 days without lost time accident and without any environmental incidents. Our leading indicators demonstrate proactive safety management, including the safety training, safety works and also the emergency trials conducted. Our company maintained the ISO certification, ISO 14001, which is for the environmental management and ISO 45001, which is for occupational health and safety and ISO 9001 for the quality management and which shows that we are compliant with the international standards.

We will talk later about the Corporate Social Responsibility and what was done in 2025. So in 2025, we completed what was there in 2024 regarding the visits for school students. And also, we started this cybersecurity awareness program for the Ministry of Education as usual and according to the Ministry decision that we have to donate to Oman Charitable Organization, the 20% of the budget. And there was also employee volunteering program regarding the beach cleaning, Al Dimaniyat Islands. And we have also started in 2025, and that will be completed also in 2026, a park in Barka in coordination with the plants and the companies in Barka, the water and desalination plants in Barka. We are also installing a solar project in one of the schools of Ministry of Education. The plan for 2026, we are planning to get approval by the shareholder meeting, OMR 50,000 for 2026. And there will be -- as usual, we are serving the community in coordination with the government authorities. So equivalent to OMR 10,000, it will go to Oman Charitable Organization. We are planning to complete the project, which is the park in Barka. We kept OMR 35,000 budget for that. And we are also planning, in coordination with German University of Technology to sponsor an engineering festival.

The company and plant performance and analysis. In terms of reliability, the plant achieved 99.73% in 2025, maintaining an excellent performance level over the past 5 years, and the excellent plant reliability always leads to better financial performance improvement. In terms of the plant load factor, it was recorded 77.13 in 2025, which is higher than 2024. Our plant remains in high ranking and merit order among the plants in Oman. Regarding the efficiency, the plant efficiency was 98.43% in 2025, which remained within the stable performance.

So regarding the financials, so as you can see, our net profit for 2025 was almost 12% higher than the previous year. This was mainly on account of 3 reasons: First being the reduction in finance cost. So as we repay our senior loans, the interest cost comes down, and therefore, this leads to substantial savings. Second is the lower O&M expenses. In the previous year, if you recollect, we had a major inspection, hot gas path inspection in 2024. So that is why the O&M expenses are lower in 2025, because there was no such major inspection. And the third is about the lower insurance costs. We had a lower insurance cost. We have managed to negotiate lower insurance premium. So as a result, there were still significant savings to that account. The revenue, revenue was higher, mainly on 3 counts. One is the annual gas price increase. As you know that our gas price is a pass-through. Whatever we incur, we get reimbursed by OPWP. Then the plant load factor was higher than previous year. So the higher the load, the more is the gas consumption and more also is the revenue. And third is the indexation. So these 3 together constituted higher revenue as compared to last year.

So on the future and strategic plan, firstly, regarding to the dividends. So as a result of the refinancing in 2024, the company eliminated cash sweep and distributed dividends in June and December 2025, and will also be able to make future dividend distribution subject to the availability of cash and fulfillment of other covenants agreed within the finance documents. The planned maintenance. So during Q1 2027, there's a plan to carry out major maintenance for the steam turbine, which will result in high maintenance cost. On the PPA extension, the company is in discussion with OPWP regarding a new PPA to succeed its existing agreement, which is set to expire in March 2028. The company submitted its proposal to PWP on 28th September 2025, covering multiple tenure options with a maximum term of up to 15 years. As of today, discussions are still ongoing and no final agreement has been reached between the company and PWP. So for future, there are opportunities and there are challenges. So our opportunities that we are having a more efficient plant. Currently, it is high in the merit order. No debt is expected in 2028 based on the current loan repayment schedule. We are expecting high demand growth. The fact that other power companies got extension through power 2024, this increases our chance of getting extension. The challenge is, there are, as we know, emerging new technologies and such things like renewables coming, so all that puts challenges on our operation. Spot market rules is still evolving, although we are not -- I mean, it's not impacting us as -- I mean, our revenues, but that spot market is still evolving.

Finally, we come to the disclaimer. And this presentation should not be construed as an offer, invitation or recommendation in respect of the company's securities. Neither this presentation nor anything stated in this shall form the basis of any 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, financial situation or needs 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 expressly nor impliedly. The financial information included in this presentation is of public knowledge disclosed to the MSX website, and it is for information purposes only.

Now we are ready for any questions from you. If you have any questions, please raise your hand.

Kindly introduce yourself and the company or the firm you are representing, and then you may please raise your hand, so we can go one by one. Feel free to ask any questions you may have. So if there are no questions, we may want to close this call.

Yes. Thank you all for attending this meeting. And as there are no questions, we will end this, and we appreciate your attendance. Thank you.

Thank you.