Alijarah Holding (Q.P.S.C.) (NLCS) Earnings Call Transcript & Summary

Good day, and welcome to the National Leasing Company, Alijarah Holding, NLCS Q4 2021 Results Conference Call. Today's conference is being recorded. At this time, I'd like to hand the conference over to Mr. Rami Soussou. Please go ahead, sir.

Thank you. Good afternoon, everybody, ladies and gentlemen, and welcome to Q4 2021 financial results conference call. With me on the line is Pia Vergara. She will be giving us the highlights for the 2021 results in details. And after which, we will be open for your questions. Go ahead, Pia. Thank you.

Good afternoon, everyone. Again, I am Pia Vergara, and I'm the accounting supervisor of Alijarah Holding. So now we are here to present to you the financial results for the year ended 31st December 2021. Referring to the presentation shared to you this afternoon, if you can go with me to Slide #6, which shows the financial highlights of the company for the year 2021. As you can see, the total assets decreased by 10.18% from QAR 822.21 million Campari on 31st December 2020 to QAR 738.5 million on 31st December 2021. The reasons for the increase and decrease in numbers will be explained further in the succeeding slides. So as at 31st December 2021, our total assets consist mainly of balances with financial institutions and cash, which is 40.48% of the total assets, followed by investment securities amounting to 28.95%, investment property at 15.79%, property and equipment of 11.33%, and other assets of 3.45%. Moving forward to the next slide. Our net loss for the year ended 31st December 2021 totaled QAR 14.89 million compared to the net profit of QAR 12.86 million for the corresponding period 2020. Total revenues and income also decreased by 74.22% from QAR 119.8 million in 2020 to QAR 3.8 million for the year 2021. In Slide #8, which shows the financial ratios of the company, we have loss on average assets of 1.81%, loss on average shareholders' equity of 2.15%, loss per share for the period of QAR 0.03 per share, and book value per share reached QAR 1.35. Going forward to the next slide. Our total equity went down by 10% from QAR 822.21 million last year to QAR 738.5 million that are this year. And again, moving to the next slide of the financial highlights. Term deposits and investment securities, one which we combined to total 69% of the total assets. For the 3 consecutive years, Alijarah increased its investment securities and reduced term deposits with banks as part of its strategic initiative. Proceeding to Slide #11. Showing the performance of the company for the year ended 31st December 2021, revenue from core business for 2021 dropped by 51% from QAR 59.52 million last year to QAR 29.26 million this year. This drop is mainly due to the decrease in revenue recognized for the percentage of work completed from the sale of project. As mentioned in our previous conference calls, we have reached the handing-over stage and currently there is no transaction in this project, except for a few handovers and few snacks that needs to be completed with the contractors. Also, revenue from Driving Academy is below expectations as they were working for a couple of months with limited capacity due to restrictions related to COVID-19. And the rest is related to leasing, which is put on hold since 2019, and we are just collecting receivables and recognizing revenues from the remaining customers. The next graph in the same slide shows that we reported loss per share of QAR 0.03 in 2021 compared to earnings per share of QAR 0.03 in 2020, and this is directly related to a lower investment income. Since the investment securities are reported in accordance with IFRS 9, wherein any changes in fair value of financial assets are recognized through profit or loss. And the same goes for the loss for the period, we have reported a loss of QAR 14.89 million this year compared to QAR 12.86 million of profit last year, and this is also directly related to investments in financial assets. Moving on to the details of our income statement in Slide #12. Total revenues and income dropped from QAR 120 million last year compared to QAR 31 million this year due to the reasons mentioned earlier. Our expenses as well, the total operating and general and admin expenses dropped by QAR 24 million this year, and this is directly related to the cost associated to [indiscernible] and contractors' cost for 2020 and 2021. Our net operating loss for the year is QAR 23 million compared to the net operating income of QAR 42 million last year. Net finance income is almost the same at QAR 3.8 million last year to QAR 3.62 million this year. And as mentioned earlier, we have reported a loss of QAR 14.89 million this year compared to QAR 12.86 million of profit last year. Moving forward, the company's financial position in Slide #13. Total assets dropped by QAR 83.76 million category in 2021, mainly due to the decrease in cash of QAR 8.96 million, attributed between dividends paid out during 2021, payments to [indiscernible] contractors and suppliers and other Wakalah repayments. Our investments also declined in value by QAR 12.6 million, QAR 22.2 million cars is attributed between sale of assets held for sale, depreciation related to PPE, and impairment of investment properties. And remaining QAR 10 million is related to the decreased installments induced from customers and prepayments and other receivables. Our total liabilities also decreased by QAR 54.4 million attributed between Wakalah repayment, release of retention to contractors related to the sales project, payment to suppliers and subcontractors, and decrease in contract liabilities. Total equity has decreased by QAR 29.36 million, basically due to the payment of QAR 12.37 million are of dividend, loss for the period of QAR 14.89 million, and for fair value result of QAR 2.2 million. Moving forward to the cash flow in Slide #14. The cash used in operating activities for 2021 is QAR 28.14 million, which is directly related to the details mentioned earlier that is supplier payments and retention payments to contractors. The net cash inflow from investing activities is QAR 24.36 million associated to cash received from dividends and sale of investment securities and proceeds from disposal of assets sales held for sale. The net cash used in financing activities of QAR 35.13 million is linked to repayment of Wakalah, these liabilities, and dividends paid to shareholders. Overall, this gave us the total decrease in cash and cash equivalents of QAR 39 million in 2021. We have added in our slides the 3 years' historical financials in Slide 15 and 16 just for your reference. Basically, this sums up the performance of Alijarah for 2021, and we can now accept questions. Thank you.

[Operator Instructions] We will take our first question now from Anastasios Dalgiannakis from Al Faisal Investments.

Yes. Just want to ask on the usage of cash. So you have been discussing for some time about your planning regarding this? Have you arrived at some plan? Because at the end of the day, if you do not have any plan, you should better return it to the shareholders. Thank you.

Thank you for your question. There are some plans but still not mature. They are still on the Board of Directors' table. And they are -- hopefully, 2022 will see some light for those plants.

[Operator Instructions] We have a question now from Ejayan Al-ahbabi from Al Rayan Investments.

This is Shabbir Kagalwala from Al Rayan Investments. I would like to know the split of your investment book. So you have roughly QAR 200 million of investment securities. Which are -- what are these predominantly? Are these equity investments or Sukuk or what asset class? And where are they based in?

Thank you for your question. Those QAR 200 million are based in Qatar in equities in Qatar basically. No Sukuk, nothing, just shares.

So they are equity investments in Qatar, right, 100% of them?

Yes, yes.

And do you have any plans to increase this book this year in 2022? Or it's expected to remain stable?

There might be a plan increasing this and going into different types of investment, maybe Sukuk and maybe to expand the portfolio with the equity.

[Operator Instructions] It appears we have no further questions. I'd now like to turn the conference back over to your speakers today for any additional or closing remarks.

This is Bobby Sarkar from QNBFS. If we have no further questions, we can end the call for today. I want to thank Rami and want to thank Pia for taking the time to speak to investors, and we will pick it up next quarter. Thank you so much.

Thank you so much.

Thank you. This will conclude today's conference call.