Ezdan Holding Group Q.P.S.C. (ERES) Earnings Call Transcript & Summary

Hello, everyone, and welcome to Ezdan Holding Group conference call. Please note that this call is being recorded. I'd now like to hand the call over to our moderator for today, Roy Thomas. You may now begin.

Thanks, Ellie. Hello, everyone. This is Roy Thomas from QNB Financial Services. I want to welcome everyone to Ezdan Holding Group's First Quarter 2025 Financial Results Conference Call. On this call from Ezdan Holding Group, we have Tamer Fouad, the Group Chief Financial Officer; and Taha Moursi, Financial Controller and IR Officer. We will conduct this conference call with management first reviewing the company's results followed by a Q&A. I will turn the call now over to Taha Moursi. Go ahead, Taha.

Thanks, Roy, and good afternoon, everyone. Thank you for joining us today in Ezdan conference call to discuss the financial performance and the position of Ezdan Holding Group for Q1 '25. We have made the investor presentation for this conference call available on our company website, www.ezdanholding.qa, under the Investor Relations section. Before proceeding, we would like to provide a disclaimer that some of the information would be discussed here might contain projections or other forward-looking statements regarding future events or future financial performance of Ezdan Holding Group. Any forward-looking statements include those that are not historical facts and speak only as of when it is made. Ezdan undertakes no obligation to publicly update or publicly revise any forward-looking statements, whether because of new information, future events or otherwise. The conference call will include 3 bars. The first bar will compare financial performance for Q1 '25 with Q1 '24. Second bar will compare the financial position for Q1 '25 with December '24. The third bar with a brief of cash flow in Q1 '25 compared to Q1 '24. The first bar, which is related to the financial performance, is then achieved a net profit for its owners of around QAR 153 million compared to QAR 95 million. The profit or loss statement contains the main changes in the following factors: Finance costs decreased by around QAR 35 million. The group incurred a gain in ForEx of around QAR 11 million compared to a loss of QAR 1.8 million. Operating expenses decreased by around QAR 7 million. Rental income and other operating revenue increased by around QAR 4 million. General and admin expenses decreased by around QAR 3 million. Other income has decreased by around QAR 1.4 million. The main ratios of financial performance. The operating gross margin was 83% compared to 81%. The net profit margin was 33% compared to 21%. The items of the components of profit or loss statement. Ezdan recognized a rental income of QAR 443 million compared to QAR 435 million with an increase of around QAR 8 million, representing around 2%. The increase in rental revenue was mainly attributed to an increase of QAR 14 million for residential segment by around 4%, a decrease in hotel segment by around QAR 3 million, representing 7%, and a decrease in mall segment by around QAR 2 million, representing 12%. The main statistics for residential segment, we have an average occupancy rate of around 88% compared to 91% with an average revenue per unit QAR 424,000 for '25 and '24 and average total units available for rent of around QAR 33,300 compared to QAR 31,100. For hotel segment, the main statistics include average occupancy rate of around 84% compared to 81% and average daily rate of QAR 189 per night compared to QAR 210 per night. The main statistics of mall segment include average occupancy rate of around 91% compared to around 93%. Regarding operating expenses, operating expenses have decreased by around QAR 7 million from QAR 85 million to QAR 78 million, which represents 8%. On a component basis, the decrease was mainly in sewage charges and the cleaning by around QAR 6 million. On a segment basis, the decrease was mainly residential segment of around QAR 4 million and hotel segment by around QAR 2 million. Operating profit from main operations was around QAR 386 million compared to QAR 375 million. On a segment basis, operating profit for residential segment was around QAR 333 million compared to QAR 313 million with a gross margin of 86% compared to 84%. Operating profit from hotel segment was QAR 39 million compared to QAR 44 million with a gross margin of 71% for '25 and '24. Operating profit from mall segment was around QAR 15 million compared to QAR 18 million with a gross margin of 69% compared to 72%. General and admin expenses have decreased by around QAR 3 million from QAR 23 million to QAR 20 million, representing around 12%. The decrease was mainly due to a decrease in professional and legal fees expenses by around QAR 2 million and the combined decrease of other categories by around QAR 1 million. Regarding finance costs, it decreased by around QAR 35 million from QAR 253 million to QAR 218 million, representing 14%. The second bar, which is related to the financial position. The group has total assets of around QAR 46.4 billion. Cash and bank balances were QAR 131 million compared to QAR 113 million with an increase of around QAR 18 million, representing 16%. Investment properties of around QAR 45.5 billion. The total liabilities were QAR 12.8 billion compared to QAR 12.9 billion with a decrease of around QAR 0.1 billion, representing 1%. Trade and other payables have slightly decreased by around QAR 24 million due to related parties decreased by around QAR 280 million. Islamic borrowings have increased by a net amount of QAR 194 million. That increase resulted mainly because of obtaining a new facility, amounting to QAR 1.28 billion, related finance costs of around QAR 180 million and repayment of around QAR 1.26 billion during the period. Total equity, including noncontrolling interest was around QAR 33.75 billion compared to QAR 33.61 billion. Share capital of Ezdan is QAR 26.5 billion. Retained earnings have increased by around QAR 153 million, which represents net profit for the period. And the final bar of the conference call is the cash flow statement. Net cash flows from operating activities were QAR 339 million compared to QAR 329 million. Net cash flows used in investing activities were QAR 5 million compared to QAR 28 million. Net cash flows used in financing activities were QAR 305 million compared to QAR 252 million. Thank you for your attention. We are now open to any questions you may have.

[Operator Instructions] We don't have any pending questions as of the moment. I'd now like to hand back over to Roy Thomas for final remarks.

All right. If we don't have any questions, we'd like to thank Ezdan Holding Group's management for the results update, and we look forward to speaking to you all for the second quarter 2025 results conference call. Thank you.

Thank you for attending today's call. You may now disconnect. Goodbye.