Dhofar Tourism Company SAOG (DTCS) Earnings Call Transcript & Summary

Assalamu alaikum and good morning, good afternoon, all of you, whoever has joined the presentation. My name is Khalid Ansari. I am the Chairman Audit Committee of Dhofar Tourism. And I have with me Najla Yousuf, she is the CEO of Dhofar Tourism. So today, our presentation is for approximately 0.5 hour, and then you can -- we can have a question-and-answer session after that. It will be in 2 parts. I will go through the financial statements and the performance of the company during 2024 based on whatever the shareholding meetings that we had in last month, where we discussed the financial statements and Najla would talk about the future projects, et cetera, so that you must have seen in the Chairperson's report, we are talking about the real estate development project, et cetera, which we are calling it Mirbature so she will take you through the -- our high-level presentation of what the ambitions are. So we start off. If you look at our financial statements for 2024, we started off -- if you remember, when we looked at the position of the company '23, there was a few critical areas, which the Board had undertake to come out of the historical issues with relating to the losses, et cetera. '24 is a year where we have, I would say, turned the corner. We were able to fix the management team at the hotel. We were able to put in all the process and procedures into the company to make sure that the corporate governance and the reporting, et cetera, complies with the good practices set out in the code of corporate governance. So if we look at the results, our year ending December '24, our income was almost OMR 1.6 million. That is an increase of almost 62% compared to the year 2023, where our income was OMR 1 million. This is the first time in 3 years that the hotel and the company is showing a gross profit. Last year, we had a gross loss of OMR 321,000. This year, we have a gross profit of OMR 132,000. So that shift in terms of the top line growth. As you all know, our asset currently are the lands, which have to be developed and our fee earning asset or income-generating asset is the hotel, the Wyndham Hotel. So we were focusing to make sure that the Wyndham Hotel revenue increases, the occupancy increases because that is the only way we will come to profitability in the future. So one big step is that our revenue has gone up. Our occupancy overall also increased. A year before, we were 30% occupancy throughout the year. In 2024, we achieved 44%, and that is also one of the biggest challenge for 2025 because we have good revenue and occupancy during the winter months, which, as you know, in Mirbat runs from almost October to March. So there, we have a very different type of market. People are coming on charter services and the occupancies are better. This year, we were expecting to be even better, but because of the regional issues, et cetera, the incoming tourists from Europe was not as what we had expected. Our second challenge is to make sure during Khareef and the Sarb season, we increased our occupancy. Historically, that occupancy used to be very low because people were focusing mainly in Salalah City. This year, because of a number of initiatives we took in 2024, it has attracted a lot of interest in customers into the Khareef season and the Sarb season. And 1 of the biggest event which happened was the horse show, the horse competition, which was held for National Championship of 2024. That was an initiative which attracted good feedback, you must have read in the press and in the digital media, there's a lot of publicity given to that. And that was the first of its kind in the whole area and in Oman for that matter. So that was the first step, which has put Mirbat on to the map for people to look at. So these initiatives, we are hoping that will continue. And as people find out more about Mirbat, more and more tourists will start coming in. Our focus this year in 2025 is to make sure that we have a much, much higher occupancy in the Khareef season. And that's what our sales team and our management are pretty focusing on to make sure that we get the number up. In terms of the numbers, if you look at our balance sheet, the company is asset rich. We have total assets of OMR 56 million. Now that OMR 56 million asset is primarily the land and the hotel. And that's our leveraging strength, which we have is that we need to develop that land around the hotel into a proper structure into a proper destination where people will start using it. More of that Najla talk in a few minutes. So if you look at our balance sheet, our total asset is OMR 56 million. Our net worth is OMR 46 million, which is a very healthy net worth. But out of the OMR 46 million, you can see quite a lot of money is in the real estate and the investment. Our debt is only OMR 3.5 million. So we are really nicely placed in terms of our debt equity. Our equity is OMR 46 million. Our total debt is only OMR 3.5 million. So that is where we are leveraging to make sure that growth comes in. In terms of our overall growth potential for this year, as we know, we are looking at Khareef season, and there's a big push to make sure people come in, then there'll be the horse championship in August again, which will also bring a lot of people. Also, the management is looking at Mirbat as a place for destination to have events like conferences, et cetera. So during that period, we want to increase the occupancy to make sure. We have 237 room last year, we were occupying 182. There were chalet, et cetera, but now all those chalets have been refurbished. It's all available for renting. So we are full force at 237 rooms and chalets. Also, as you know, we reported previously that we have partnered with UNESCO for World Heritage and sustainable tourism in Arab world. So there's a lot of work going on to promote Mirbat as a destination. And I think that's the objective of the Board and the company to make sure that Mirbat is a separate destination, a unique destination to attract people coming in. In terms of our cash flow, we are looking at, as you know, in the Chairperson's report, we have said that during the year, we will be looking at increasing the capital or going for a rights issue. Now that plan will come into effect sometimes in April, May -- not April, May, May, June and the reason for the rights issue is to ensure that our real estate development, which will happen in phases gets funded because we need funding initially to make sure that our real estates starts off. We had reported to you in 2023 that we have signed up with a company called F&M to develop. Unfortunately, the project got delayed for whatever reasons set out in our Chairperson's report, and we're looking at alternative to fast track it now. Once it's done, then we'll look at the rights issue to bring in and we'll keep you updated. So I'll now hand it over to Najla.

Thank you, Mr. Khalid. Okay, so I think I will just go directly and elaborate on Mirbature. So Mirbature is actually, our flagship project, it's a mixed-use project, a very ambitious project going to be built on an land of almost 2 kilometers in size. Well, feasibility studies are confirmed. Feasibility studies is done. Okay. So feasibility study is done. Can you still hear me? Can you hear me? Okay, good. So we have a proof of concept. We have done a lot of research and studies with the -- our consultant and we have a well-defined framework for -- back to the market studies and other research related to the site itself even before announcing the launch of the project. We have global attention. We have interest building up from international investors. And we expect to have this Phase I ready for launch in Q4 of 2025. We are bringing under this Mirbature project, which is like an incubator for potential of different kind of projects, mainly is the mixed-use development, touristic and residential and commercial. Also within the same site, we have an international diving center. We have space, we call it Dhofar Dome, which is a multipurpose space for multipurpose use to host different functions, activities related to culture and business. We also have already -- we are in a dialogue with some big cultural powerhouse in the region and also internationally to bring a museum to the site, an interactive museum that's -- and we are engaging in the global dialogue about awareness for the environment and for the culture. The culture being the best language, the whole world can communicate with. And I think Mirbat has all the potential that can actually make all this vision possible. Dhofar Tourism have a strategic vision to bring this development not only to develop the land but to develop the whole city of Mirbat and maybe create possibilities for youths educational and recreational outlets. And with all of that and with every step we honor our culture and we honor our history and it is actually the source of inspiration for all our steps. Also, we have collaborated with [ ouch ] innovation because we are adopting to the innovation drive, which is basically in every part of our process, whether it is operational or on an executive level, on a project study level, we have -- innovation is part of everything that we do. And we would like to continue emphasizing on the importance of innovation in our outlook to -- in the development of Dhofar Tourism. So I mean that's it. I have nothing else. I will open...

If there are any questions please ask, happy to answer. Any questions from the shareholders? Feel free. Yes, Said, anybody raising hand?

No? I think should be just thank you for everyone.

Okay. We thank you, and we'll get back to the shareholders shortly. And we thank the regulators, the financial services authority for giving us this opportunity to record our presentation. And the company personnel are always available for any questions, any clarifications. And we look forward to the shareholders support fully to take us on this very ambitious journey, which we are sure we'll be able to achieve. Thank you very much and Assalamu alaikum all.

Thank you.

Thank you.

Have a nice day. Bye.