Nebras Energy Q.P.S.C. (QEWS) Earnings Call Transcript & Summary

Hello, and welcome to the Qatar Electricity and Water Results Call. I would like to advise all participants that this call is being recorded. I'd now like to welcome Bobby Sarkar from QNBFS to begin the conference. Bobby, over to you.

Thank you, Eli. Hi. Hello, everyone. This is Bobby Sarkar, Head of Research at QNB Financial Services. I wanted to welcome everyone to Qatar Electricity and Water Company's First Quarter 2025 Results Conference Call and webinar. On this call, we have Shahzad Gill, who is the Chief Finance and Planning Officer; and Dan, who is the Corporate Planning, Performance and IR Manager. So we will conduct this conference with the management first reviewing the company's results followed by a Q&A. Please note that we will only accept questions in an audio format for this webinar. I would now like to turn the call over to Shahzad. Shahzad, please go ahead.

Thank you very much, Bobby. Good afternoon, everyone. I welcome you to Qatar Electricity and Water Company's Q1 2025 Financial Results Presentation. We shall start with the headlines, and then we'll go into the details and comparisons with prior year. Before I jump into the call, I just want to highlight that you will see the numbers lower than last year, but this is not unexpected for us. There is primarily one major driver, which was anticipated given the change in dividend policy for most of the companies here in Qatar listed on QSE. Maintenance and outages went according to plan for us. I will now move to performance highlights slide. Slide #5, please. So for the revenue, we have posted Q1 QAR 681 million compared to QAR 687 million for the same period last year. This is 1% lower. EBITDA is QAR 442 million. This is 8% lower than last year. Net profit for Q1 2025 is QAR 288 million, and this is 10% lower compared to last year. QEWC Group's gross power capacity is 20 gigawatt, while net ownership adjusted capacity is 8.5 gigawatt. Gross water capacity is 541 MIGD, net is 392. Renewables operational capacity is 4.2 gigawatt and the net is 1 gigawatt. Capacity under construction remains at 3.2 gigawatt, net 1.1 gigawatt. Next slide, please. So this is a consistent message and reminder that the fundamentals of our business stay strong. The market share in power and water remains high within Qatar. Internationally, we have well-diversified portfolio of renewables and thermal assets across 10 countries. We have long-term offtake contracts for our investments and long-term fuel supply agreements in place. Next slide, please. Operational performance in Q1 2025, sent out power is 2% lower compared to last year, while sent out water is 4.5% lower. This is due to lower demand by the offtaker. However, plant availability is high than compared to last year in both cases in power and water. So key financial highlights. Revenue is posted QAR 681 million, slightly lower. EBITDA at QAR 442 million and net income at QAR 288 million. With this, I'll hand over to Dan to go through the variance analysis in detail.

Thank you, Shahzad, and good afternoon, everyone. So moving to Slide 9. Revenue was QAR 681 million for the quarter, which is 1% lower versus Q1 2024. This was largely driven by lower sent out power. Gross profit amounted to QAR 208 million in Q1 2025 comparing to QAR 224 million for the same period of previous year. The variance is mainly due to lower power dispatch and higher operating costs. EBITDA was QAR 442 million for the first quarter of 2025, whereas EBITDA for the first quarter of 2024 was QAR 479 million. The decrease is explained by lower final dividends received from available-for-sale investments in Q1 2025 due to interim dividends received in 2024. Now turning to Slide 10. Share of profit from our joint ventures and associates increased by QAR 8 million in comparison to the results for the same period of last year. Increase is coming mostly from the assets based in Qatar. Interest and other income decreased from QAR 136 million to QAR 99 million in Q1 2025. Decrease is explained by lower dividends from available-for-sale investments, as explained before, and lower interest income on deposits. Net profit was QAR 288 million, which was 10% lower compared to Q1 2024 based on the drivers explained before. Now moving to financial position on Slide 11. The total assets of the company stand at QAR 22.7 billion with nearly 2% decrease comparing to previous year-end. 6% decrease in cash and cash equivalents is mainly due to final dividend for 2024 paid by the company and capital expenditures on facility and picking unit. This was partially offset by cash generated from operations and dividends received from our investees, increasing value of available-for-sale investments driven by a change in the market price of shares. Turning to Slide 12. Total equity of the company decreased by 2% and amounted to QAR 15.3 billion, decrease largely driven by final 2024 dividends paid by the company in Q1 2025. Total debt remained almost at the same level of QAR 6 billion. An increase in net debt position reported for the first quarter is due to dividends paid by the company. So with that, we'll open up for questions. Over to you, Eli.

[Operator Instructions] Since we don't have any pending questions, I'd now like to hand back over to Bobby Sarkar for further remarks.

Okay. Thank you, Eli. If we have no further questions, we can, I guess, end the call for today. But I just wanted to maybe jump in with a question of mine, if possible. Just in terms of your expansion that you talked about expanding capacity by 1.1 net gigawatts, you have 2 domestic projects, the Facility E and the RAF power project. Can you just give us an update on where we are? Has construction started on the second project and how it's looking in terms of the actual start-up of the projects.

Thank you very much, Bobby. So related to the domestic projects, the Peaker project, the construction has started, but in Q2, that is in April. So it will be updated or we will have commentary around it in Q2 in more detail. The other project is still we are working towards the financial close towards the end of this year in the second half.

And just a follow-up, if I could. In Qatar, are you primarily exposed only to the conventional types of projects? Or are you also looking at solar and renewable projects in Qatar?

In Qatar, we are only exposed to conventional. We are not looking at renewables. There are different organizations that are looking at that.

Okay. All right. It seems like we have some questions from the line. Eli, please go ahead with the questions.

Our first question comes from the line of Seki Mutukwa from Ashmore Group.