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

Hello, and welcome to Ezdan Holding Q2 2026. Please note that this call is being recorded. You will have the opportunity to ask a question to our speakers later on during the Q&A session. [Operator Instructions] I'd like to hand over the call to Dana. Please go ahead.

Hello, everyone. This is Dana Saif from QNB Financial Services. I would like to welcome everyone to Ezdan Holding Group's Second Quarter 2026 Financial Results Conference Call. On this call from management, we have Tamer Fouad, Group Chief Financial Officer; and Taha Moursi, Financial Controller and IR Officer. We will conduct this conference call with the management reviewing the company's results followed by a Q&A session. I will now turn the call over to Taha. Please go ahead.

Good afternoon, everyone. Thank you for joining us today for Ezdan Holding Group Q2 '26 Conference Call. Our investor presentation is available on our website at www.ezdanholdings.qa under the Investor Relations section. Before we begin, we would like to provide the disclaimer that some of the information that will 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, including those that are not historical fact, 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. Today's call will cover 3 main areas. First, we will walk through our financial performance for Q2 '26 compared to Q2 '25. Second, we will compare financial position as of 30th June '26, with 31st December '25. And third, we will cover cash flow statements for Q2 '26 compared to Q2 '25. First, For financial performance in Q2 '26, Ezdan achieved net profit attributable to its owner of around QAR 442 million compared to QAR 423 million. The main driver behind the changes were as follows; first, finance cost decreased by QAR 119 million. Second, rental income increased by QAR 17 million and other income increased by QAR 17 million. On the other hand, the gain on sale of investment properties and assets held for sale has been decreased by QAR 111 million. For key ratios during the period, operating gross margin remained stable at 83% Net profit margin slightly improved to 46% to 47%. For the components of income statements, First, for rental income Ezdan recognized around QAR 904 million compared to QAR 887 million, reflecting an increase of around QAR 17 million or approximately 2%. Those gross rental revenue were supported by improved performance across key operating segments mainly residential segment with 2% and mall segment was around 16%. If we move forward to main statistics for residential segments, average occupancy improved to approximately 92% from 88.5%, and average revenue per unit remained broadly stable at around QAR 4,400 per unit. While average total number of units available for rent decreased from approximately 33,000 during the Q2 '25 to 32,000 units during Q2 '26. For hotel segment, average occupancy decreased to approximately 82% compared to 83% and the average daily rate at Ezdan Palace Hotel decreased from QAR 427 to QAR 422. While average daily rate in Ezdan Hotel West Bay decreased slightly from QAR 173 to QAR 170. And for mall segments, average occupancy reached approximately 95% from 91%. For operating expenses, there was no material change. Our operating profit increased from QAR 765 million to QAR 782 million with an increase of approximately QAR 17 million or 21%. By segment, Residential segment's operating profit grew from QAR 661 million to QAR 675 million with the gross margin increased from 85% to 86%. Hotel segment operating profit decreased from QAR 72 million to QAR 68 million, with the gross margin declined slightly from 69% to 68%. The mall segments operating profit improved from QAR 32 million to QAR 39 million with a gross margin rising from 69% to 73%. General and admin expenses increased by approximately QAR 4 million from QAR 43 million to QAR 47 million with an increase of around 10%. The main driver was increase in commission fees and staff cost combined by around QAR 5 million, while bank charges decreased by around QAR 1.5 million. For gains on sale of investment properties and assets held for sale. It decreased from QAR 116 million to QAR 5 million with a decrease of around QAR 111 million. And this mainly because during '25 first half there was a selling growth Ezdan combined to QAR 40 million, which resulted in a gain of around QAR 115 million, while during the first half of '26, there was a selling growth individual units resulted in a gain of QAR 5 million. For ForEx gain or losses, the group recorded a ForEx loss of approximately QAR 4.1 million compared to a gain in first half of '25 with QAR 21 million, and this is mainly because of the changes in the British pound exchange rate. For finance courses, there was increased by approximately QAR 120 million as financial costs decreased from QAR 422 million to QAR 303 million, representing a reduction of around 28%. This was primarily driven by lower borrowing rates and improved profit margins on financing expenses. Moving now to the financial position. The total assets stood at approximately QAR 45.9 billion compared to QAR 45.6 billion. Cash and bank balances increased to QAR 878 million from QAR 511 million and an improvement of approximately QAR 367 million or 72%. Assets held for sale decreased by around QAR 131 million as a result of selling residential units during the period. Total liabilities decreased by around QAR 206 million from QAR 12.1 billion to around QAR 11.9 billion. Trade and other payables decreased by approximately QAR 14 million. Islamic borrowings decreased by an amount of QAR 192 million during the period. This reflects financial cost of approximately QAR 302 million and repayments of approximately QAR 496 million. Total equity increased from QAR 33.6 billion to QAR 34 billion, an increase of approximately QAR 444 million. The gross share capital stands at QAR 26.5 billion. Retained earnings increased by QAR 442 million, primarily reflecting the net profit generated during the period. And for cash flow statement, net cash flows from operating activities were QAR 711 million compared to QAR 700 million and the net cash flows from investing activities were QAR 147 million compared to QAR 404 million. And the net cash flows used in financing activities were QAR 494 million compared to QAR 359 million. Thank you for your attention. We are happy to take any questions you may have now.

Thank you. At this time, we will now begin the question-and-answer session. [Operator Instructions] We will take our first question from the line of Ejayan Ahbabi from AI Rayan Investment. You may now begin.

This is Ejayan Al-ahbabi from Al Rayan Investment. So I heard you talk about the occupancy, but sorry, I did not -- I was not able to get the exact percentage. So could you please give me some guidance on the occupancy rate blended? And for the different segments, if you can?

Okay. We can repeat again for the occupancy. For residential segment, we have around 92%, for hotel segment, we are talking about 82%. And for mall segments, it was around 95%.

Okay. Excellent. And in terms of the residential and commercial property units. What is the unit amount?

No. For residential segment, we are talking about here the units for -- that is being rented to the individuals and the companies.

Yes. Do you know how many units are available for rent.

Okay. For residential segment, we are talking about around 32,000 units available for rent. Residential -- and we are talking about 97% residential and we are talking about only 500 or 600 units as commercial.

Okay. Okay. And do you see yourself adding more any time soon to this unit amount?