Baladna Q.P.S.C. (BLDN) Q4 FY2025 Earnings Call Transcript & Summary

Hello, and welcome to Baladna. Please note that this call is being recorded. [Operator Instructions] I'd like to hand the call over now to Saran. Please go ahead.

Thank you, and hello, everyone. I want to welcome you to Baladna's Fourth Quarter and Fiscal Year 2025 Financial Results Conference Call. So on this call from management, we have Saifullah Khan, Group CFO. So as usual, we will conduct this call with first management reviewing the company's results followed by a Q&A session. I will turn the call over now to Saifullah. Please go ahead.

Thank you, Jan. Good afternoon, ladies and gentlemen. We are here to discuss Baladna results for full year and fourth quarter ended 31st December 2025. My name is Saifullah Khan. I serve as the Group CFO of Baladna. Thank you all for taking time to join us today. The presentation material, we have already been shared in advance and are also available on our website if you haven't taken. Before we begin, please note that today's discussion may include forward-looking statements based on current expectations and assumptions. Actual results may differ due to various factors. 2025 was an exceptional and defining year for Baladna. We delivered record financial results and made significant progress across our international expansion strategy with an increasing contribution from our strategically the verified investment portfolio and overseas initiative. This performance reflects the strength of our integrated business model and the impact of strategic decisions taken over recent years to expand beyond the domestic market and built a diversified international platform. Our geographic and sectorial diversification strategy is now clearly translating into a tangible financial results. We closed the year with strong momentum and entered the next phase of growth with confidence and announced in the international visibility. Let me now talk you through our financial performance for full year. Revenue reached QAR 1.217 billion representing 11% growth year-on-year. Growth was driven by high volumes across key channel led by HORECA segment, which delivered 30% growth during this year. Profitability improved materially, EBITDA reached to QAR 500 million QAR 770 million with margin at 60%. This reflects revenue growth alongside strong return from the strategically diversified investment portfolio and increasing contribution from our international investment and overseas operation implementing as a part of our geographic and sectorial diversification. Net profit reached QAR 540 million, increasing 192% year-on-year basis with margin of 42.6%, marking the highest level of achieved by company to date. Earnings per share increased [ QR 0.252 ] compared to QR 0.086 in prior years. Overall, full year performance highlights the strength of our core operation combined with the growing financial impact of our international expansion strategy. Turning specifically to the fourth quarter, which closed the year on a very strong note. Q4 revenue increased by 14% on a year-on-year basis to QAR 326 million, supported by higher contribution from HORECA segment, [indiscernible] economic and visitor activity linked to FIFA in 2025 in Qatar and stable demand across core dairy categories. Profitability in quarter 4 was particularly strong. Q4 EBITDA increased 127% year-on-year basis with EBITDA margin reaching 66%, driven by strong operational performance alongside continued return from a strategically diversified investment portfolio. Q4 net profit increased by 260% year-on-year basis, driven by higher sales volume and investment returns quarter-on-quarter movement reflects normalization of investment gains compared to prior quarters, while underlying operating performance remains solid. Moving to cash flows and our balance sheet position. Baladna continued to generate strong operating cash flows during the year supported by high profitability and contribution from diversification of initiatives. Operating cash flows enabled the company to fund capital expenditures, strategic investment and finance cost while maintaining the solid liquidity position. Cash utilization primarily reflects investment activity aligned with the international expansion projects and long-term growth initiatives. Overall, the balance sheet remains strong and provides flexibility to support continued execution of our international growth strategy. Let me briefly touch on operation -- power operational performance across the business during this year. Operationally, performance remained steady. During the year, we expanded 267 SKUs and increased our sales reach to more than 149 [indiscernible] reinforcing our leading market position in Qatar and supporting broader commercial growth. HORECA channel was a key growth driver, particularly in the second half of the year benefiting from the increased activity and a strong relationship with the hotel, restaurants and catering customer. Across the domestic business, demand in the fourth quarter was supported by increased activity associated with the FIFA Arab Cup 2025 alongside continued portfolio development across core, dairy and juice categories. Let me turn to our international expansion strategy, which remains our central to our long-term growth plans. We began the execution of our large-scale international platform in Algeria, which represent the first cornerstone of our expansion beyond Qatar on a ground has a greenfield project. During 2025, we integrated every industrial project in Algeria advanced from planning fees into the active on-ground development with a strong execution across multiworkstream. Key milestones, including securing 186 drilling permits, completing 445 wells, starting irrigation and period system and successfully initiating the first crop cycle. Industrial development also progressed across major infrastructure and engineering components supporting the phase development plan towards [ first mill ] production by end of 2027. Algeria represents the foundation of our scalable international growth model and the key driver of long-term value creation. Building on this foundation, we progress into Syria where preparative activities continue for the planned integrated industrial project economic in papering arable farming, dairy juice, processing, plastic packaging and warehousing in parallel exports through our local distributor, partner. We have established an on ground commercial presence, enabling early market entry while developing planning continue. Together, Algeria, Egypt, represents the initial phases of our broader international expansion strategy, as we continue to evaluate additional markets in line with our long-term region of expanding from Qatar to the wall. Finally, a brief update on our shareholders. During the year, shareholders approved a 24% increase in the company compared to capital through a [indiscernible] issue, subject to regulatory approval. This strengthens our capital base and support the continued execution of our international expansion strategy. In summary, 2025 was a record and strategically transformative year for Baladna. We delivered exceptional financial performance, achieved a strong profitability and cash generation, and we made substantial progress in building our international platform. Looking ahead, our priorities remain clear. We will continue to execute our international projects with the discipline, expand our diversified platform and strengthen our position, both domestically and across regional market with strong momentum and the clearly defined international road map we are confident in Baladna ability to build on this success and create long-term sustainable value. So thank you for your today call joining. Now I will open the session for any questions and answers. Please go ahead.

[Operator Instructions] Your first question comes from the line of Mohit [indiscernible] with Liza Bank.

I have a couple of questions. First is regarding the -- I think you have a net write-off of around QAR 36 million. So if you can just help us understand what that is and where is it coming from? And second is on the investment portfolio that you have, do you -- what is the outlook on that front? Do you foresee continued investments there? Or do you be realizing some gains and using that in the core operations? So these are the 2 questions from my side.

Thank you. For your first question, what you have seen in our P&L on the phase we write off some post project advances. So this is related to our last 5 to 6 years, where Baladna was doing all the business development in the different countries, okay? We spend a lot of money on these projects where we were trying to secure successfully make this for a company, which can give us some positive, but it could imply that project because we didn't select that project because of many reasons. But this is all related to feasibility, our traveling on the ground study. So these expenses pertaining to that relevant has. So now we are entering into the very clean focused approach in projects like I mentioned in my speech, that all the past projects, we got the opportunity. We have a high profitability from our investments. So we write off during this year to get the opportunity. So this was a onetime transaction to close all the past, what we have spent on the business development. So this is answer to your first question. Second question, I think this is our -- as per our strategy, we are exploring other opportunities. And yes, we definitely will be looking into these options that to materialize some of investment and use in other investment where we can have a high return for our investors. So this option is under our consideration. At this stage, our investments are still giving us positive return, and we are expecting, and during this year, also some positive returns from these investments. I hope your question is answered.

Yes. Thank you so much.

[Operator Instructions] Since there are no further questions, I will turn back the call now to Vahan.

Okay. So if there are no more questions. we can wrap up this call, and I want to thank Saifullah for giving us an update for 2025, and we will pick this up again the following quarter. Thank you.

Thank you, everyone. Have a good time.

Thank you, everyone, and that concludes today's call. You may now all disconnect. Have a nice day ahead.