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

Good day, and welcome to the National Leasing Company, Alijarah Holding, NLCS, Quarter 2 2022 Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Rami Soussou. Please go ahead, sir.

Thank you, and good afternoon, ladies and gentlemen. Today, as mentioned, we will be discussing our Q2 2022 performance. Together with me here, our CEO, Mr. Hamad Al Jamali; and Pia Vergara on the line as well. First, we will start with the first slide, which talks about the performance of Q2. As you can see, there was a slight increase in our core business -- revenue from core business, there is an increase of 6%, driven by the[indiscernible] and the business and the academy for this first and second quarter compared to last year due to lifting up the restriction related to COVID-19. Going further, if we look at our profit and loss, Alijarah Holding did a profit of QAR 6.7 million compared to a loss of QAR 7.8 million. This mainly related to the increase in the core business revenue and the increase from -- income from investment, in addition to reduction in our total expenses that we'll be talking about in the later slide. Earnings per share is directly related with the profit as well, has increased almost 186% from QAR 0.014 in 2022 June compared to minus -- a loss per share at QAR 0.016 in June 2021. Moving forward to our detailed income statement. If we can look at the first line, our total revenue increased by QAR 12 million compared to QAR 11.4 million last year. And June 2022, our revenue and income reached to QAR 23.31 million. And as I said earlier, this was driven basically from the revenue from core business and investment from -- income from investment, excuse me. Whereas the dividends and the fair value of the investment portfolio were reflected in this currency. Our total expenses dropped from QAR 26 million to QAR 18.03 million. That's a drop, 31%, and this is again driven by that we have already handed over all asks to -- related to the Alijarah property related to the sale project, even the landscape, the slight course that took place in June 2022 compared to last year. We have handed over those assets. And now the landscaping as well as in this defect liability period, which shall be ending hopefully by Feb/March of 2023. Our net operating income, it was QAR 5.28 million compared to a net operating loss QAR 14.73 million. Our net finance income almost remains steady, QAR 1.66 million compared to QAR 1.5 million, and this was due to the fluctuation in the deposit rates and the slight decrease in our deposit amount. Our net profit for the period from continuing operation, it was QAR 6.94 million compared to a loss of QAR 13.23 million. Profit from -- for the period from discontinued operation, QAR 0.016 million loss compared to QAR 5.4 million profit. Our total profit for the period is QAR 6.7 million compared to a loss of QAR 7.8 million. Earnings per share for 2022 June is QAR 0.014 compared to a loss of QAR 0.016. Moving forward to our financial position. Our current assets, they dropped to reach QAR 331.57 million compared to QAR 505.48 million. And our noncurrent assets increased QAR 377.46 million compared to QAR 232.96 million. This change in assets between current and noncurrent is just moving the transaction that took place between our investment, moving it from short-term and long-term investments. Our total assets dropped slightly to reach QAR 709.03 million compared to QAR 738.44 million. Our current liabilities, it's QAR 43.7 million compared to current liabilities of QAR 40.54 million. Our noncurrent liabilities dropped, so reached QAR 9.1 million compared to QAR 28.03 million per year. Our total liabilities decreased as well, QAR 52.84 million, compared to QAR 68.57 million. Our equity reached QAR 656.19 million compared to QAR 669.87 million. Lastly, our cash flow for the period June 2022 compared to June 2021. Our net cash used in operating activity was QAR 2.08 million compared to QAR 30.58 million. Our net cash flow used in -- from investing activity was -- the used in was QAR 9.131 million compared to QAR 16.12 million. And our cash flow used in financing activities, that was QAR 11.49 million used in financing activities compared to QAR 23.68 million. Our net decrease in cash and cash equivalents dropped to reach to QAR 22.88 million compared to a decrease of QAR 38.14 million in previous year. This sums up the performance for Alijarah during the first 6 months of 2022, hoping that the next 6 months will be as good as or hopefully better than the first 6 months. We are now open for your questions. Thank you.

[Operator Instructions] We will take our first question from [indiscernible] Al Rayan Investment.

This is [indiscernible] from Al Rayan Investment. One of the major variances in your results has been the income from investments. Could you give us more color on what is the rationale for this variance? Because last year, first 6 months of '21, it was a loss of QAR 3.4 million. This year, it's higher, about QAR 7.7 million. So could you tell us what changed or what was the result of this? Plus, how do we see this in the second half of this year? Is it going to be continued at this level, at this pace, or it's going to be different?

Thank you for your question. Well, as I mentioned even in the financial position, we used to hold some of our investments as a short-term investment. So we used to account for that fair value through profit and loss. And during those 6 months, those shares that we are holding in our portfolio through profit and loss were moved to be as a long-term investment where we will be only getting any dividends from those shares and their fair value will not impact our profit and loss. That will impact our other comprehensive income, which directly will impact the equity. So basically, the income from investments will remain at this point. And hopefully, it will even be better reflecting whatever trading we are doing in those investments and whatever fair value will take -- will hit those investments. Because if you noted in the previous years, we used to depend on -- our results were related to those some sort of investments that were held at fair value while they are actually a measure of -- they are a long-term investment. So it was a strategic decision to move those to a long-term investment. Hopefully, I cleared your question.

Just a follow-up on that. I mean, even in this quarter, the variance in this fair value was about QAR 5 million. I think there was a loss of QAR 5 million because in the first quarter, this fair value was higher, was QAR 3.3 million. And this quarter, it's down by QAR 1.8 million. So that's a variance of QAR 5 million. So it seems like not all has been changed to the long term, right?

No, no, no. It's most of them, but because you've seen what happened to the market, so whatever portfolio we were holding at June 30, 2020 dropped and it really impacted our trading portfolio. Our portfolio was doing well in the first quarter, but the second quarter, there was some sort of drop in the market that impact -- that had a negative impact on the portfolio. So we're hoping in the coming quarters this will be managed.

[Operator Instructions] It looks like there are no questions at this time. I would like to turn the call back to Mr. Soussou for any additional remarks.

Thank you for joining Alijarah Holding Q2 2022 conference call. I'm looking forward to having you on the next conference call, which shall be in the third quarter. Thank you so much. Looking forward.

This concludes today's call. Thank you for your participation. You may now disconnect.