Nebras Energy Q.P.S.C. ($QEWS)

Hello, everyone, and welcome to Nebras Energy conference call. Please note that this call is being recorded. I'd now like to hand over to Bobby for opening remarks.

Thank you, Eli. Hello, everyone. This is Bobby Sarkar, Head of Research at QNB Financial Services. I wanted to welcome everyone to Nebras Energy's First Quarter 2026 Results Conference Call. So on this call, we have Shahzad Gill, who is the Chief Finance and Planning Officer at Nebras Energy; and Dan Sabitov, 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 session. Please note that we will accept questions in an audio format only for this webinar. I would now like to turn the call over to Shahzad. Shahzad, please go ahead.

Hello. Thank you very much, Bobby. Good afternoon, everyone, and [Foreign Language]. I welcome you to Nebras Energy's Q1 2026 Financial Results Presentation. We shall start with the headlines, and then we'll get into the details and comparisons with the prior year as usual. So I'll move to Slide 4, please. Nebras Energy has demonstrated strong and robust performance in Q1 2026, despite the regional political situation, and it is a testament to the resilience of our business. Our plants have been operating continuously without any interruption. The company continues to monitor the regional situation closely. As you may remember, we had shared the good news with you last investor call. Nebras Energy as part of the consortium of sponsors has won the development of 2 CCGT power projects in Oman through our competitive bidding process. Both of these projects have a 20 years PPA. Nebras Energy secured a 49% stake in Misfah project. And 30% stake in Duqm project. Misfah is 1,700 megawatt and Duqm is 877 megawatts. I'm delighted to share that construction has started on both the project sites this quarter. Now coming to the numbers. Revenue for the full year 2025 is QAR 725 million. EBITDA is QAR 450 million, net profit, QAR 295 million. We will get into the analysis shortly. Nebras Energy, on the capacity side, Nebras Energy's Group gross installed operational power capacities 20 gigawatt, out of which 4.2 gigawatts is renewables. Gross capacity under construction is 8.7 gigawatts. You would notice here that we have added construction of the Misfah and Duqm projects this quarter. Gross water capacity stands at 541 MIGD while the capacity under construction for the water is 110 MIGD. If we can move to the next slide, please. Here on this slide, we lay out investment highlights. The fundamentals remain strong. Market share in power and water remains high within Qatar, of renewables and thermal assets across multiple regions, where demand growth is strong. Gas plays an important role as transition fuel. Renewables are replacing all thermal power plants in these markets. We have long-term offtake contracts for our projects and corresponding long-term fuel line agreements are also in place. Cost of fuel is recovered through pass-through mechanisms built into our long-term power and water purchase agreements. Next slide, please. Key financial highlights for Q1 2026. The group posted a revenue of QAR 725 million, which is 6% higher than last year Q1. EBITDA for the period is QAR 450 million. This is 2% higher than the corresponding period last year. Net income attributable to equity holders for the period is QAR 295 million compared to QAR 288 million in the same period last year. With this, I shall hand over to Dan to go through the variance analysis in detail. Dan, over, please.

Thank you, Shahzad, and good afternoon, everyone. We are on Slide 8. Revenue is 6% higher as compared to Q1 2025. The increase is largely driven by higher sent-out power and water as well as higher capacity charge rates as per PWP. Gross profit amounted to QAR 220 million in 2026 compared to QAR 209 million last year. 5% increase is due to higher revenue, partially offset by higher fuel costs. In Q1 2026, EBITDA was QAR 450 million, which is QAR 8 million higher versus EBITDA for the first quarter of 2025. The increase is mainly from higher gross profit. Turning to Slide 9. Share of profits from the joint ventures and associates was QAR 145 million in Q1 2026 compared to QAR 152 million in Q1 2025. The variance is mainly driven by higher maintenance costs at Qatar Power Company plant, lower earnings for morale wind farm, mainly due to lower generation and lower LGC revenue. This was partially offset by higher capacity charge rates at Ras Girtas and Umm Al Houl power plants in Qatar. [indiscernible] for the first quarter. The increase is driven by higher dividends received from available for sale investments, which reflects the timing between the quarters. QAR 95 million compared to QAR 288 million reported last year. The increase reflects a better operational performance and higher other income as previously explained. Turning to financial position on Slide 10. Total assets of the group stand at QAR 23.7 billion nearly a 1% decrease comparing to previous year-end, which was mainly due to decrease in available-for-sale investments, partially offset by the capital expenditures on the RAF Peaker unit project. 5% increase in cash is largely driven by cash generated from operations and payment of shareholder loan. This was partially offset by capital expenditures on Facility E and RAF Peaker unit projects and final dividends for 2025. Decrease in value of available for sale investments is driven by the change in market price of shares. Moving to Slide 11. Total equity of the group decreased by 2% and amounted to QAR 15.5 billion decrease largely driven by final 2025 dividends paid by the company in Q1 2026. Total debt is in line with Q4 2025. Decrease in net debt is largely due to increase in cash and capabilities as explained on previously. With that, we'll open up for questions. Over to you, Eli.

[Operator Instructions] Your first question comes from the line of [indiscernible]

[indiscernible] Could you tell us what is the rationale for the increase in your general admin expenses?

Yes. So you will see increase by QAR 21 million approximately in G&A expenses. This relates to onetime expense related to historical development costs for a number of budgets.

Can you let us know how much is this onetime expense?

QAR 20 million.

QAR 20 million. And this is only in this quarter or it will continue? This will not...

This one time.

This quarter. QAR 20 million. Okay. Sorry, could you repeat what was the rationale? What -- this was for what?

Yes, this was based on the review of the previously capitalized costs.

As of right now, we don't have any pending questions. I'd now like to hand the call back to Bobby for final question.

I have a question, if I may. Could you talk a little bit -- in Qatar, could you talk a little bit about your capacity expansion with the facility and the peaker project, when do you expect these projects to start contributing? What's the CapEx and the funding structure? And how much of the CapEx has already been spent?

Yes. On the Peaker Project, which is 511 megawatts, the COD target date is still the same early 2027, as communicated before. For Facility E, there is a full COD scheduled for 2029 and the early power in 2028.

And the CapEx for both of these projects and how much has been spent and how -- what's the funding structure?

For Facility E, our equity requirement of Nebras Energy is in the tune of QAR 1.4 billion. As of today's around QAR 600 million, QAR 700 million is it. And the structure is through bill. Yes. For the rough picker, it is a consolidated subsidiary. So the full CapEx is in our cash flow statements. The gearing is around 70% for the RAF Peaker project. The remaining is funded by Nebras Energy.

Eli, do we have any questions outside?

As of right now, we don't have any questions on the conference line.

Okay. In that case, we can end the call for today. I want to thank Shahzad and Dan, for taking the time to go over the presentation and answer your questions. And we will again pick this up next quarter. Thanks, everyone.

Many thanks, everyone, for joining. Thank you, Bobby and Eli.

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