Gulf Mushroom Products Co. SAOG (GMPI) Earnings Call Transcript & Summary

Good morning, everybody, investors and analysts. My name is Deepak. I'm the CFO for Gulf Mushroom. With me is Mr. Abdullah Nasser Al Hadhrami, the CEO, and we welcome you to this sixth meeting of the shareholders meeting for discussing the audited results for the year 2025. And we have already uploaded these accounts on 11th of February. And I'll just summarize the results in this slide, which you can see on the screen. The sales for this year has been OMR 12 million as against OMR 11.3 million last year, an increase of 6%. GP is 50% as against 49% of last year. Selling and distribution expenses have been OMR 853,000 as against OMR 866,000, small decrease of 2%. Admin expenses has been OMR 1.589 million as against OMR 1.489 million, a nominal increase of 7%. Then there is other income. Our EBITDA is 30% as against 28% last year. Finance costs have slightly decreased, OMR 217,000 as against OMR 253,000 last year. Depreciation is slightly decreased, OMR 626,000 as against 670,000 last year. Profit before tax, OMR 2.754 million as against OMR 2.290 million, an increase of 20%. And profit after tax also increased by 20% from OMR 1.947 million to OMR 2.342 million. So in summary, so our profit per share is 15 baiza as against 43 baiza last year. So we invite any questions from the audience.

Yes, can I ask a question?

Yes. Of course.

What's the reason behind the increase in sales? I mean, are you increasing production or you are increasing the prices?

The production has increased. Actually, the prices has seen nominal increase. But main reason is the increase in production. The sales quantity has increased.

Okay. So you have increased your capacity as well. Is that...

No, the capacity in the year 2025 has been the same as last year. The new rooms that got commissioned in January, that will affect the performance in 2026. But capacity, actually, we're using 100% even last year, but there is sometimes a slight improvement with the efficiency in the yield of mushroom. So that's the reason that the sales quantity can go up, even though the capacity is the same.

Yes, that was my next question. It's that what sort of efficiencies, initiatives that you guys have used to increase the sales, or revenue overall?

Yes. Basically, you see the yield is essential product. So the yield, we always try to improve the yield of mushrooms with better efficiency in growing procedures. Sometimes the quality of materials also affect the yield. So it's something which is dynamic.

Clear. I've got a question on the growth, but I mean, we're still talking about the numbers. So maybe I'll let others talk about numbers as before we go into growth.

Yes, Mr. Shaoor, do you want to ask a question?

Yes, sir. Great set of numbers. I've just started looking at this company, and this looks very attractive to me. There are a couple of things that I wanted to ask. I hope I'm audible?

Yes, yes. Please.

Perfect. Okay. So first and foremost, you mentioned something new that's coming up, which will impact the 2026 numbers. Could you elaborate on that? What is this you think? Is it a capacity addition or something?

Yes, we constructed 6 new growing rooms in the year '25, which got commissioned in January. It was announced last year. So it's a small increase in capacity. 12 rooms. So that will give an increase of about 15% in production.

Okay. Perfect. So 15% in production, and we can expect a similar growth in your top line, right, if this capacity is also 100% utilized?

Yes, yes.

Okay. And going down to the bottom line, due to the operating leverage, I think the impact on the bottom line should be slightly higher than that. I'm talking in book terms.

Yes, yes.

Perfect. Secondly, my question is on your payout policy. So basically, I noticed that you guys distribute close to 50% of your earnings in payouts. And the company is not in a stressed situation as far as the debt is concerned. So your net debt is close to, I believe, OMR 1 million against an EBITDA of OMR 3.6 million. So you guys are very comfortable there. Your payout policy, as I mentioned, is 50%. Should we expect an improvement in that because you guys are cash rich, the expansion is up? Or do you have some other uses for the cash on the balance sheet?

Well, the payout in the last few years has been about 50%, but that's not strictly something that we want to follow. It depends on the requirement for the funds. Suppose you want to go in for expansion, then it may be less. And it can be more if the cash flow is otherwise not required for investment purpose.

All right. And do you have any big expansions planned in this year or the next year?

This year, no, nothing has been discussed or decided yet, but it's always possible. Like we keep on adding some capacity in the growing rooms. We may go for some other capacities also, but nothing has been decided.

Sorry, if I may interrupt. You guys have announced recently a purchase of a plot next to your plant, I guess.

Yes.

Is that not part of your expansion? I mean, what are you going to do with it?

That is actually our area in our farm here in Barka. It's limited length, and we wanted to install a bigger capacity of LPG tank and some other utilities actually. So that area is going to be used only for installation of utilities, because for safety reasons, we need some extra space to install the LPG tank, that makes it about 100,000 liters tank.

So it's not an expansion for your production. It doesn't impact that?

No. No.

Okay. Clear. So the expansion -- I'm sorry, my other colleagues, I mean, I interrupted in the middle. So you're talking about roughly 15% expected growth this year or next year?

Yes, yes. Increasing the capacity, yes.

Perfect. Now my next question is regarding your revenue. So could you please elaborate how much of your sales is locally in Oman? And how much, if any, are you exporting right now?

As our Board of Directors report has mentioned that we are largely export oriented. So about 90% of our production and sales is exports and 10% goes in the local market.