Muscat Thread Mills SAOG (MTMI) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. We are here to review the annual financial statements of Muscat Thread Mills SAOG for the year 2025. Along with me, Mr. Mithilesh Kumar Singh, our CEO; and I'm Manish Rachh, CFO and Secretary of the company. We have a small presentation on the financials of the company. Complete financials with all other reports are already available on the company website and on MSX website. However, we will go through this presentation. After that, we'll have a question-and-answer session if you have anything on the financials of the company. During the 2025, our revenue was higher by around 7% and gross profit was higher by around 6% compared to 2024. Our net profit was higher by around 4% compared to the previous year, while basic earnings per share was increased by -- increased to OMR 0.022 per share compared to last year of OMR 0.021. This year, our share capital was increased because of the bonus share declared in 2024 by 7.5%. So share capital has increased. Our shareholder fund has also increased compared to 31st December '24. which was OMR 2.2 million has increased to almost OMR 2.5 million, an increase of around 10%. There are certain key ratios for the financial year 2025 compared to 2024. Current Ratio is almost 3% compared to the 2.6% of the last year, a sign of healthy signs where current assets are sufficiently covering the current liabilities by almost 3x. Our debt equity ratio is also very low, which is again like showing that the company's overall net worth is sufficient, good enough compared to its debt, just 0.53% in 2024, which is again improved compared to last year, which was 0.61%. And it is -- on the maximum, it's quite lower than the maximum, which is permissible in general compared to 3.25%. Our return on equity is around 16% both the year. Our complete financials are anyway, as I said mentioned, it's already available on the company's website and on MSX, which includes balance sheet, income statement, cash flows, equity notes, Chairman's report, corporate governance report and management discussion and analysis report. But if you have anything to specific references to these documents, we can review it. Otherwise, it's already been there in the website since almost more than 10 days. By this, I mean, we have to discuss is, of course, I mean, during the Board meeting, which was held on 3rd February, which approved the financial statement. Board has recommended for the declaration of cash dividend of 12.5%. That is -- I mean, OMR 0.0125 per share and a stock dividend of 5%, which is equivalent to 5 free shares for every 100 shares. This will be, of course, approved by the shareholders in the forthcoming Annual General Meeting, which is scheduled on 16th March 2026, which will be on the Muscat Threading portal, 3:00 p.m. onwards. By this, our presentation is over, which queues the basic and all important and relevant information about the company, its profitability, its net worth, its key ratios and dividend. If you have any specific questions for us, you can ask. Unfortunately, it's like we don't see anybody.

So we are here till 1:00. And if anyone has any questions, you are free to ask any questions regarding our performance of 2025. So me and our CFO, we are sitting here till 1:00, and you can ask any questions. Thank you.

Just for the record purpose, I'm just saying 3 gentlemen are there on the session. If you have any questions you can definitely ask. You can unmute yourself and you can ask the questions if you have anything.

We do not have any further presentation than what we already show. So we'll be waiting for any quest-and-answer session. Good afternoon, ladies and gentlemen. We are available here till 1:00. We already finished the presentation, which we had. If any questions are there from your side, kindly let us know. We are available till 1:00. Thank you.

You first time. We spoke a couple of times.

First time we met and talk, always I call you and we talk by the phone.

Our CEO is there, Mr. Mithilesh Kumar Singh.

This is the first time -- you talk with a shareholder, always there was no participants for the last 2, 3 years, I think.

Yes, we are always there, but it's up to the shareholders to come and talk to us. Yes, this is all good, and we are here to answer any of your questions based on the performance. So if you have anything, we are ready to answer you.

We finished the presentation.

We had a short presentation on the data, which is already there on the public domain. So you must have seen the performance.

Yes, I have seen the performance of the company. I was following the performance of the Muscat Thread company for the last couple of years. And once I noticed the increase of the profit, I start to get interest with the company and start to buy shares. I start to visit the website of the company to take some knowledge, start to read the financial results, and I gather some information and I invested in the company. I have one question -- for -- the company profit has grown, let's say, around 30% from the year 2022 until 2024. But in the year of 2025, the profit was -- the growth was, let's say, 10% if you compare it with the 2024 or it was stable. Do we expect the profit growth will be the same rate in 2026. I mean, a 30% increase in profit each year from maybe '21, 2021 until 2024. Then in 2025, the profit was stable. So this give an indicator that maybe the market is saturated or there is new markets for our products. So I'm raising a question that is the profit going to be the same in 2025? Or the management expecting new markets for the products or you're going to produce a new product that will increase the portfolio of the company and increase the sale. If you get my question, sir...

As you rightly mentioned, Mr. Aqeel, that you have seen a substantial increase in profit in the previous year. So if you note from the data, the profit value was lesser, and that has increased to a very decent level in past 2 years. So definitely, that kind of percentage margin, we don't see that kind of percentage margin increase. But yes, to answer your questions in 2 parts. One, we see a sustainable business for 2026. Profit also, we see a decent amount of growth. It will be difficult for me to give you an exact number. But yes, we see a decent amount of increase in 2026. As I mentioned to you, there are 2 -- you must be knowing also, we have 2 kind of businesses. One is the business where we service to our B2B customers, like the large garment exporters who are like in different countries. There is no such kind of customer base in our country in Oman. So like we service customers in Pakistan, in India, in Jordan, in the majority part of Africa, which is Madagascar, Kenya and many other parts of the world. So that business was under pressure during 2025 because of the tariff issues. The entire world apparel was a little disturbed, in fact. But on the other hand, the other business which we have is the domestic, we call it domestic business. This is customized tailoring business where like people like you go to a tailor and get your desired dress stitched. So this business is growing for the company. And last year also, we achieved more than 30% growth in this segment. So this year also, we see a significant growth coming from this segment, not from Oman alone because Oman market, now we have reached to a leadership position in this product category. We have -- if you see the growth of this segment, we have been doubling or tripling down business in every year. So we have grown almost 5x in last 4 years. So Oman market, we have already gained a fairly large amount of share and have a market leadership. Now we are growing beyond boundaries of Oman in this product segment and exploring possibility of business in neighboring countries like UAE. And there also, we have got very good traction because of our product quality, because of our service. So 2026, I see a significant growth for this product category in countries like UAE and some product categories in Oman. So -- and to answer your question, yes, we see an increase in profit in 2026 if we compare our previous performance, decent stable performance, I can assure you during this year 2026.

This was what we reported in our Chairman's report also and management discussion report also, like we are focusing in our tailing and domestic business just because to overcome the difficulties in the B2B business, which is more driven on this because of the tariff issues. So as we reported in our -- these reports, we see a foreseeable stable business throughout the year.

Let's say, if we are focusing in the local market, Oman and Gulf market. Usually, I remember when I was going to [indiscernible], all the thread was from [indiscernible], a Chinese company. Now when I go to the tailor shop, they show me the catalog of [indiscernible], the Boat, which is a brand name of your company. And I'm very happy that they show me the threads that made from a local company. Can you plan to introduce a thread, which is especially to the dishdasha, you name it dishdasha and focus on Omani or the GCC countries Kandura. So it will be focusing a white something made especially customized for the local cloth. This is a suggestion. You can study it. Also, rather, I have another -- I want to raise another question. The cost, let's say, every OMR 0.1 we earn, 90% of this OMR 0.1 goes to cover the expenses, like -- so OMR 0.09 for each OMR 0.1 that we earn goes in the expenses. Maybe the polyester is a material, which comes in our industry. And it's depend on the oil prices and also maybe the shipment expenses that the company spend on sending the materials to the consumers. Is there a chance that we try to reduce the cost, but without touching the staff salary and staff bonus, is there a chance that we can reduce the expenses although it's hard to control the expenses without touching the salaries and bonus for the staff, I want the staff get the good handsome salaries and bonus.

Mr. Aqeel, there are 2 questions in your discussion. So I'm very happy to share with you, as you mentioned that if something can be done, especially for this dishdasha. So I'm happy to share -- see, we have already launched one product here.

Not clearly, sir, sorry.

Yes. This is a product which is especially developed for dishdasha. This is a product which is especially developed for this dishdasha. And this -- we are like -- this is a very beautiful product, a very premium product, if you see. Here, the box size and everything is a very premium size, okay? And this is something which has been developed keeping in mind of the requirement of the national dress of all GCC countries. So this year, we have just launched this product, and we have launched a specialized product in coal form also, which is at least 20 different variety of whites. So as you rightly mentioned that now everywhere we go in Oman, you will see a majority of the customers are having Boat Shade Card and they are using Boat product. Now that is one of a product which is for mass market. So to further enrich our product offering, we have launched this product, which is called Silver Falcon Elite. So this is especially made for this dishdasha, and this is a very premium product. So the teams are working on to make it more popular in the market. A couple of large premium brands have already started using this product. And, I see a good market for this product in the future. Maybe a few years, you will start seeing a lot of these boxes also in the market.

I remember sometime the Omani Kandura, we put some colors that match the turbine. So I will look fancy. I asked the tailor to use DMC threads for me, which was costing me around OMR 0.800 or OMR 1 extra from the normal. But the DMC thread that I used in my dishdasha was giving me a shine and everyone will notice that there is a nice shine, a quality and some customers are ready to pay, let's say, extra OMR 1 or OMR 0.500, and I will get a very colorful. But the problem is the DMC was 100% cotton. So this, we call it in Oman [ Tarbusha ]. If I wash it in the washing machine, it pops and become messy. What should I say messy, should I say.

Very messy. It will start having balls on this and looks very dirty.

Yes. So if you have also -- if you take in your consideration, something...

I will search for it. If you want, you can -- we'll be very happy to gift you one box, you can get it collected from our office.

Thank you, sir, very much. I will send my son. I will -- maybe I'm busy at office. I will send my son and to pick it up, and I will [indiscernible] amongst my friends, the company gift me -- I'm a shareholder, they gift me...

I'm very happy to share this one with you. And as you mentioned about DMC, DMC is a cotton product. And if you see our brothers in Emirates like UAE, their Tarbush is very different from Omani dishdasha. So your company has developed a special cotton thread against DMC for Emirati dishdasha. That is a 100% cotton product, which has been developed from Giza 92 of Egypt, which is one of the best cottons in the world. So that product also we have developed. So towards our vision on more getting into the localized market for domestic consumption, your company is working for the last 5 years, strategically focusing on the products which has been -- being used in this market.

Targeting the local dress...

Local...

And also the Omani Kuma, they can use the -- in Omani Kuma, mostly they use DMC. So maybe also a special project for the Omani Kuma, which will be I mean, quality and the price-wise will be acceptable and the quality-wise will be acceptable.

I can assure you, Mr. Aqeel, that your company MTM quality is as good as DMC, which is made in France.

I'm also -- some of the tailors that I visit in the [indiscernible] market, they say they want more catalog -- to distribute more catalog of the board. They have shortage in catalog. So I'm passing their suggestion -- their request to you.

We are already working on this.

So far, I don't have any questions. Thank you very much for your hard work. Thank you for your performance. Thank you for the dividends and the free share, while the company grow, we also grow. We accumulate profit. We save some cash for our retirement or maybe one day, we will participate in the management. But anyhow, for now, we accumulate shares. Thank you for all the efforts. I appreciate every single staff who is working in the company from the lower rank till the senior managers.

Thank you, sir.

I don't have any other questions. Thank you.

Thank you very much for being here. We appreciate it. Have a good day.

Bye-bye.