Dhofar Food & Investment SAOG (DFIN) Earnings Call Transcript & Summary

Well, good afternoon, everyone, and welcome to this discussion. Today, we are going to present our financial results for 2024. While we are presenting these results, the group is going through a significant transformation and the results might portray a challenging year, which was 2024. But at the same time, it would also reflect a bold transformation that is currently going on in the group. As we speak, we have been able to take many legacy issues related to the group in terms of structure, people, processes head on, and we have already taken quite a few steps which have already started to yield results for us. And as we progress, most of the steps which are related to the legacy processes, structures, people have been taken care of. We have been able to consolidate most of our functions across the group, which has brought in much more efficiencies, transparencies and cost efficiencies in our business. At the same time, we have also focused on the human resources, looking at people currently working and also bringing in new talent from different nationalities, from different experiences, which is also bringing new energies to our group. At the same time, the group is quite focused on developing Omani national talent. There are a few positions which have been filled specifically with Omani nationals. And also, we are focusing on grooming Omani youngsters, so that they can take up bigger responsibilities in the future. At the same time, the group is also looking at expanding our geographical reach, not only in Middle East, but also in Africa. I think with all the steps that we have taken in the last few quarters, we will start yielding results in the coming quarters in 2025, Inshallah. And that's what we are really looking forward to. And I think with that note, I would request Mazen, our CFO, to present the results, so that if anyone has questions, we can take it on. Mazen?

Yes, sir. I would share the audited financial statements for the year ended 2024, that have been audited by BDO. So first, we will go through the audit opinion that have been provided by the auditors. As you can see, in our opinion, the accompanying separate and consolidated financial statements present fairly, in all material respects, the separate and consolidated financial position of the parent company and the group as at 31 December 2024, and its separate and consolidated financial performance and its separate and consolidated cash flows for the year then ended in accordance with IFRS accounting standards as issued by the International Accounting Standard Board. If we take a look at first at the results for the period, we will see that for the year ended 2024, DFI has incurred a small loss of OMR 54,000 whereas the group has incurred a total loss of OMR 4.175 million. These losses are coming from the subsidiaries of DFI. As also mentioned by Vipul, this has been a challenging year, mostly coming from the vegetable business, around OMR 800,000, and the poultry business, which had the most significant losses for 2024, amounting to almost OMR 3.3 million. As far as the revenues are concerned, there has been an increase in revenues from OMR 35.6 million in 2023 to OMR 37.2 million in 2024. As far as the group is concerned, there is an increase in revenue from OMR 56 million to OMR 87 million. This has come practically due to the fact that OGFC has been introduced to the group by mid of 2023. This is why we see this big increase in revenues. As far as the balance sheet is concerned, we are seeing an increase in total noncurrent assets from OMR 52.9 million in the parent company as of 31 December 2023 to OMR 64.4 million as of 31st of December 2024, which has mainly come from the parent company buying the assets of the poultry company, which are amounting to around OMR 8.7 million, and which the parent company has leased them back to the poultry company as of 31 December through a long-term lease arrangement of 10 years. As far as the group is concerned, there's a slight decline in the total noncurrent assets from OMR 56 million to OMR 54 million. The current assets have remained more or less the same. However, we can see that at the parent company level, there is an increase in inventory and a decrease in the trade and other receivables coming mainly from the fact that management receivables is being improved as part of the overall improvement that are happening to the group. However -- furthermore, we can see that the working capital of the company is still healthy. Definitely, we will be -- we are currently doing lots of improvements to the business with many cost reductions and initiatives in place, increase in the revenues and sales in many places, which will be reflected in the coming period. As far as the cash flows of the company are concerned, we can see that during the year 2024, we have generated OMR 2.9 million net in cash from operating activities. We had also, for the parent company, I mean, the investing activities, also this is mainly coming from the purchase of the assets from the poultry company, mostly OMR 8.7 million out of the OMR 8.8 million, and other coming from the financing activities, whereby the company has consolidated all its financing arrangements with one bank, which is the BankDhofar. So far, these are the financial statements of DFI. I would appreciate if you have any questions, we will be ready to answer.

[Foreign Language]. Thank you for everyone.