Oman Cables Industry SAOG (OCAI) Earnings Call Transcript & Summary

Welcome, everyone. Good day. Welcoming you for our Analyst Meeting MSX Discussion Session Today, the 5th of February for 2024. In this meeting, we have our Chief Executive Officer Cinzia Farise, our Chief Financial Officer Rinke Kieboom; and myself, Investor Relations, Jad Atallah. We'll go direct into the presentation and the agenda practically will be -- well, the presentation practically will be based on 4 chapters; Oman Cables Industry overview, the macroeconomics and business environment, beyond a sustainable growth, 2023 year-end audited financial results. And I will leave the floor to our Chief Executive Officer, Cinzia Farise.

Good afternoon to all of you. I'm really glad to be here with all of you to present our financial results of the year 2023. A '23 that saw the energy transition taking hold, but also a further hotbed of tension in the Middle East. In this context of opportunity and on one hand, but also uncertainty on the other, Oman Cable has managed to maintain its ability to compete on the domestic and foreign market, contributing to the growth of the Sultanate. It was a year of further growth for Oman Cable, with our customer at the center to whom we returned commitment, competence and passion for the trust they've shown us in all the Gulf country, while enhancing risk management and compliance. We have paid particular attention to the growing safety of our resources in a framework of listening, comparison and sharing, continuing to integrate different generation, genders and skills. We have confirmed action that now started to become a tradition to which we have added a new initiative of social and environmental responsibility. We have built relationships of solidarity and identity with all stakeholders, grasping the changes and the trends where we can direct our innovation for sustainability. These, all in line with the strategic line of our Board and for our people, so that also '24 will be a stable and solid year of sustainable growth. Moving on to the first chapter. I'm proud to say that we were celebrating our 40-year anniversary with all our people, while we were trying to identify our new role as enabler of the energy transition in the region. Not more only a cable producer, but capitalizing on our leading position as a technological enabler of the energy transition that has the aim and the target to anticipate the need of our customers, strengthening the engagement with our supplier, especially when we deal about sustainability and Scope 3 and focus on continuous innovation, leveraging on our leadership, industrial leadership and technological leadership to amplify the impact that we can generate on our community. And we continue to connect to lead through the valuable integration with Prysmian Group. When we speak about integration with Prysmian Group, we are convinced that we are bringing synergy to the worldwide cable leader, drives significant value creation for all our stakeholders. It is valid for people. When we speak about the opportunity we are giving to all our people to participate through program and training in our 5 Academy all over the world and in partnership with the best business school and university all around the world. When we speak about innovation, innovation for sustainability and the capability to innovate and integrate our solution through our 25 worldwide R&D centers. When we speak about excellence, which is one of the 3 values of Oman Cable, combining the best practices of more than 150 years of experience in the cable business. When we speak about solutions and not only cable, amplifying our portfolio to a wider range of solution, integrating services to production. When we speak about quality, accessing a worldwide testing facility with the combination of the best knowledge and the quality standard recognized at international level. When we speak about servitization, introducing a revolutionary method in order to monitor the production in our house, but also the level of inventory of our clients. When we speak about to network, a big network made of 150 plants over the world, addressing each and all cable requirement providing to our customers. And when we speak finally to sustainability, sustainability means for us to integrate economic, environmental and social ambition in a unique approach to become not only innovator in the sense, but also role model within the Gulf region. This is concluding the first chapter of our presentation. We now enter slowly, slowly into the macroeconomic environment, where are we living or how we are approaching the worldwide situation in this moment. In this moment, we see 3 major elements dominating the world of business. The first one is the geoeconomic fragmentation, the so called grid fragmentation, that seems to be for 70% of the economies worldwide, the macro trend for 2024. We are also convinced that this can be accelerated by all disruption worldwide in 2024, and this obviously is the result of breaking point that were unfortunately started in 2023 and then that are particularly strongly affecting also our region in this moment. We see a second macro trend worldwide level that is the diverging regional growth dynamics, certainly with differentiation between region and region. With China, that is shifting from a grow to moderate or largely moderate prediction for 2024. With Europe, which outlook has weakened significantly during the latest month, with the grow expectation at U.S. level that has weakened too. We saw a third macro trend, particularly appearing on the scene in the last period of 2022. But affirming in 2023 with many potential on generative artificial intelligence, that is becoming and has the potential to become disruptive by end of 2024. At least, this is the largest sentiment of the most part of the economists that investigated, that are increasing compared to the previous year. All in all, dominated by a rupture in the global supply chain and also as company, we are assisting something concrete in this sense in end of 2023, early 2024, with the geopolitical risk on disruption on trade flow through the Red Sea especially. But what we see in the GCC region as a short-term prospect we may say, and this is absolutely also our sentiment, that compared to the global picture, GCC are poised to effectively navigate through this decelerating global economy with a GDP that still remain interesting for all and also for us with some reason of optimism. The first one is related to the oil price, which are expected to remain interesting at an interest level for 2024 and regional economy that are keeping good health and are experiencing a positive momentum. Obviously, this outlook is also boosted by the project finance availability on high energy export revenue and also on the different development plan that are available at GCC level for the long term. This is related to the energy, but also to the non-energy sector. A second point of cautious optimism is related for the non-oil sector, which remain a key driver of the growth of our region. We particularly focused on UAE and Saudi, that are still in their expansionary territory, overperforming the global average. And this is clearly seen also in our number. And the third macro trend is related to the construction sector in the GCC that is experiencing a period of strong growth and we do expect the same also for the medium term. The construction sector is showing a large pipeline of project. Some of the contracts are still not awarded, but they are including many different sectors. Energy certainly, power, water, transport, infrastructure, commercial and residential and industrial development, all sector where Oman Cable has a strong leading presence in the GCC region. There is also, as I was mentioning [ some highlights ] for the disruption related to trade flow through the Red Sea, that if not reabsorbed soon can amount to higher shipping cost as we are already experiencing nowadays, but also an availability of containers and longer transit time. Longer transit times, that obviously are decreasing the competitiveness of the player that are residing in our region. And with the risk and the possibility, the clear possibility that the price of commodity and also other goods are driven by an inflation and are on the upside trend. What we see especially in this region is the energy transition going on. The energy transition where the GCC, obviously, is a player in the global energy transition, with opportunity that are related to the necessity to increase the production, the generation capacity. On greener sources, today just 3% of the total power output, we see UAE leading the GCC nation, with around 15% of the country energy generation driven by renewable sources. We see Saudi currently producing a minimal part today considering that much of the investment also need to be frontloaded. It takes time to come on the stream, but the pipeline of the project is quite interesting. And all in all, we may say that we expect additional renewable energy generation capacity to grow in 2024 in line with the different plan that all GCC countries has on their table. Just to mention 2 big projects, Dubai Waste-to-Energy facility, to become fully operational this year or ACWA Power Layla PV Solar project in Riyadh also expected to be operational this year. These are massive projects that are certainly increasing the global energy generation capacity from greener sources. What about our country? We consider in this picture, Oman, among the front runner on renewable growth. Certainly, we agree on the fact that in the next 5 years, the capacity expansion of renewable is projected to grow 3x. But we also agree on the fact that the Sultanate of Oman is certainly in between the countries that will drive this growth. And also, it is interesting to underline what the International Energy Agency is underlying or better to say the capability of Oman to lead this renewable growth. Projected to be the fourth largest country in the region after Saudi, UAE and Morocco. And we are in the middle of this renewable growth, with solar particularly making up 85% of the increase and onshore also. Wind will contribute with green hydrogen production to set -- expected to set and to play the major role as well in Saudi, in UAE, but also in Oman. I think that all businessmen connected recognize the interesting plan that the Sultanate has put in place with this revised energy plan, enriching the Oman Vision 2040 to secure by 2025-'26. 16% of electricity from renewable, rising to 30% by 2030, with green hydrogen targeted at around 1 billion tonnes per annum by 2030. This is definitely an opportunity that we are already starting to address in 2023 where we built our sustainable growth. We continue for the third year to build our sustainable growth with an adjusted EBITDA increasing 45% versus 2022, and the net result increasing 69% versus 2022. It's not finished. The ongoing shift is there from fossil fuel to renewable energy. And we definitely think that the beginning of the end of the fossil fuel era is now concretely in place. How we are preparing to lead this challenge? We are preparing while strengthening our business development, investing in our people and in our assets, continuing to transfer technology and knowledge to the country and to our company. Through the partnership, technological partnership with Prysmian Group, we continue to boost innovation and digitization and we will show you this in a few times how. And we continue to support local empowerment because if making results is our goal, giving back to our community is our commitment. Beyond sustainable growth, we are entering into the third chapter of our presentation in order to illustrate to all of you how we are strengthening our capacity to drive and to enable the energy transition as Oman Cable Group. First of all, with our innovation ambition through our brand new Renewable Excellence Center last year, same period, we were here to introduce you a related investment. Now, we can see that our Renewable Excellence Center is a reality. We are very much committed at our ESG. And you see that in the picture of this slide, you can clearly verify the innovation for sustainability that we are putting in place for each and all segment of our activity, starting from PD means power distribution, trade and installer, oil and gas, OEM, network component, renewable and also for our 2 companies pertaining to OCI Group, OAPIL, which was performing extraordinarily well in 2023, and ACPL that was going really through an increase of its profitability, which is a very small company based in India dedicated to special cables. But staying in on this focus on sustainable innovation, I'm also very proud to say that the team was translating one of the various dreams into reality. One of this dream was the Sustainability Academy that now is fully operating. In less than 1 month, we will have another round of colleagues coming from all over the world. And this Sustainability Academy has the ambition to address more than 30,000 employees coming from 50 countries of the world. It was inaugurated last January 2023 in order to prepare to shape the sustainable leaders of tomorrow, a tomorrow that is already today. A second ambition, our climate [Technical Difficulty]

Cinzia, you need to unmute.

I hope you can hear me.

Yes. We can hear you, Cinzia.

Provide the feedback?

Yes, you're back on track.

Can you all please listen to me?

We can hear you.

Yes. We can hear you, Cinzia.

Very good. Sorry, but my screen was completely disappearing. I'm extremely sorry. Can you also see me?

Yes, we can.

Very good. I do apologize for this interruption. I was mentioning our second ambition, which is our climate change ambition that we particularly translated into reality through the expansion project for OAPIL. OAPIL is our company producing rod and conductor aluminum in Sohar. In line with our investment plan already introduced to all of you 1 year ago, we are progressing and we translated into reality our capacity increase of aluminum conductor, which is expected to be operative before end of 2024. And that will bring 30% more in terms of capacity of aluminum conductor. This interesting investment was absolutely necessary in order to optimize and enhance our conductor capacity that is related to our Oman Cables' Renewable Excellence Center, first of all, but also especially to support the expansion of the Omani and the GCC grid, which is the base of the energy transition. Renewable need a strong grid, and this is the support we are offering through OAPIL. And also it's providing us more and more, and the number are giving effect -- clear effect to this goal, increasing the export opportunity and the intercompany opportunity for OAPIL and the entire Oman Cables Group. We continue our social ambition, empowering to diversity. I'm pleased to inform that some initiatives are really becoming -- starting becoming solid, entering into our tradition. We just inaugurated the second edition of SHE STEMS, together with the Ministry of Higher Education Research and Innovation of Oman, giving the opportunity to 20 Omani ladies to have the dream of a better future. So, we decided to continue. We promise it was a long-term initiative and not one shot, and we are doing. We are in line with our social ambition, just launching another great initiative with the full endorsement of Ministry of Education of Oman, dedicated to the kids of the Sultanate. Because our STEM journey is continuing, this time fostering a stronger more inclusive STEM culture for the next generation to prepare and empower the next generation of Oman. This is a very nice initiative, which is comprising 2 core activities; adopting a school. We are selecting a school together with the Ministry of Education in Muscat, where we will perform and deliver a 3-months plan in STEM and sustainability. And then we will offer also to the community some weekend for kids together with us, always oriented to STEM activity. All these initiatives are part of a bigger CSR plan, the restructured, that we are following on a year basis in order to give concrete support and to invest in the future of the Sultanate, more than distributing here and their financial support. I will then leave the floor to my colleague, our CFO, Rinke Kieboom, that will illustrate the financial results. And I obviously will be available. We remain available at the end of the presentation for any curiosity, interest question you may have. Thank you. Rinke, the floor is yours.

Thank you, Cinzia. Good afternoon, everyone. I'm glad to present to you all the 2023 financial results. So, what we see here in front of us is the sales by channel, domestic export and intercompany. If you compare 2022 with 2023, you see in value, a reduction in sales, that doesn't mean too much. Be aware that the majority of the cost is the metal part in our cables, and we transfer the prices of the market to our customers. So, a decrease in metal prices is automatically resulting in a decrease of sales at the same volume levels. It's changing at the moment. Let's go back to presentation mode if we can. So the reduction in sales is driven by 2 effects, the metal prices, as I just mentioned and also, we see, as already discussed last year as well, a change from copper cables to aluminum cables. And that is also because there's a price difference between the 2 metals, is also driving the overall sales value down, but that doesn't mean that the volumes are going down. If we look at the next slide, we see the same picture, but then for the parent company, so OCI cable company, the previous one was the OCI Group, the same kind of picture. Again, driven by the copper prices and the change between copper and aluminum cable. In the next slide, we see the contribution -- sorry, the sales by business unit, where you can see that we are really diversifying our portfolio in multiple legs, I would say. We are not standing on one leg upon business, but we have multiple legs, which gives also continuity to the business and to the company. Look at the blue one, where you see a major contribution from OAPIL, already mentioned by our CEO in her speech. In the next slide, you see the contribution margin split by business unit. Also here, you see that we have a very nice split between the various business units. So, again, we're not standing on one leg. We have multiple legs supporting the company. I would like to point out that in 2023, we started to separate renewable from OEM. So on the left-hand side, you see the OEM number, which is a combination of OEM renewable. In 2023, the right-hand side of the picture, we separated renewables. So, you see that one with the 2.4%. As said, a good contribution by all segments to the overall performance of the group. If we move on, we see the revenue, EBITDA and margin -- EBITDA margin and the net income for the group. The revenue, you see the reduction. As already mentioned in the first slide, it's entirely driven by the metal prices decrease and the mix change to more aluminum cable. Looking at the EBITDA margin, we see a strong growth. Again, last year, we saw a growth, but we accelerate for 2023, a 46% EBITDA increase in 2023, driven by the product mix improvement, the pricing related to that cost improvement to design, to cost -- to reduce the cost of the cables themselves and a focus on fixed cost management, keep the fixed cost under control while growing the business. On a net income level, we see a 69% increase compared to 2022, driven by the same elements, of course, the successful price management, overhead cost under control, focus on profitability, but also a strong improvement in financial results, adding to the net result. If we look at the next one, we see the balance sheet side where we see net working capital on annualized sales, strong improvement compared to 2021, more or less at the same level as 2022, a small deviation due to phasing of the business. Looking at the net financial position, meaning the cash enhanced, we see also there a strong improvement from December '22 to December '23, OMR 44 million to OMR 59 million. This is driven, of course, by the profitability of the company, but also by a strict control on our net working capital, keeping your stocks under control, your receivables in the control and the same for the payables, trying to expand your payment terms with your vendors, for example. So, these are the highlights of the financials. And if there are any questions, please let me know.

Okay. I don't hear any questions. Maybe, Cinzia, you want to have a closing word.

Hello?

I see some people raising their hands.

Yes, we have Joice Mathew.

Congratulations on an excellent set of numbers. [ Mike ], I have 2 questions basically. You have recorded almost 70% growth in bottom line during this year. So what's your outlook for this year, especially in terms of EBITDA margins, which show -- which has witnessed a very big improvement from 6.7% to 10.2%. So, where do you see the EBITDA margins settling for the next couple of years?

We expect to continue our growth as a company. That is what I can say at the moment. I'm not going to predict a certain percentage or something like -- or a certain amount. We have to see what is going to happen, as already indicated by our CEO, we have to manage the situation, where we also have a very unstable global situation with several crises around the world. So, we have to see how those develop. But all in all, looking at our own company and our markets, we do expect to continue to grow.

[ Bishan ], do you have any questions? I can see your hand raised.

Hello.

Yes, please.

Thank you so much for the presentation, and for this call. Just a couple of queries. One is you mentioned how sort of the shift from cooper to aluminum helped last year, along with softening metal prices. What's your outlook in general on metal prices for this year and how stable prices would sort of help the business? Or do you sort of see any movement in metal prices? That's the first question. If you could just comment on that.

It is very difficult to predict. As per our experience, which is quite long in the cable business, we are used to be very cautious on this. We make our plan and our budget based on specific level, certain level based on our assumption for sure. But as you know, we are not at all speculating on this. We are hedging. Our metals is very much difficult to predict. Let's say, we don't see at the moment, particular variation, but it is very much difficult to predict. I was mentioning all disruption all over the world can bring suddenly to unexpected variation of the metal cost at which we are absolutely prepared. For us, the variation in the metal cost is not at all a relevant point, if not, obviously, affecting the price of the cables. It is very clear, but we have to manage it.

Okay. Noted. The next question is in regards to the cash balance that we see on the balance sheet. We've seen that number stable around OMR 45 million, OMR 47 million. And as of December, that number was OMR 58 million. Any thoughts on sort of what the company could do in terms of options with this huge cash balance, including probably even a potential buyback?

Sure. I think you touch a very interesting point. Thank you for your question. It is true that the company has an ambitious investment plan for this year as it was for the previous year. But it is also true that we are analyzing in this moment and for the following months, the possibility to extend our capacity to different segments of the market, obviously, sustained by precise business case that has to be completed. And also, we don't exclude to grow through merger, acquisition.

Okay. Okay. And again, would it be cross-border, outside the region? Or is that still too early to discuss?

Please. Sorry?

I said within the region or completely outside the region?

We are normally basing our activity in the Middle East. We are present worldwide at Prysmian Group level, but as Oman Cable, we operate in the Middle East and it is where we are concentrating the opportunity of expansion.

Okay. Noted. The next question is in regards to sort of other areas for improvement. I mean, the company has done extremely well over the last couple of years, great set of numbers. It's been fantastic. But in terms of any areas for improvement or sort of any areas of concern for you as management, if you could just highlight those for us?

In this moment, we see many opportunities, and we see some clouds that are more related to the worldwide geopolitical tension. The opportunities are driven by this energy transition. You saw how we are differentiating. This, I think, is the good word when we speak about innovation for sustainability. Differentiating means, for example, if we look at our -- let's go to -- let's move to our presence in the different market. Differentiating means, for example, that today, we see renewable entering very much into the scene. But we see also the construction business going on at a very interesting speed. We see the aluminum appearing on the scene that is not a danger, but is a big opportunity. And I think that we are preparing to drive the company in this sense. What we have to be able is to anticipate the need and the trend of the market. And I think that the results are already showing this trend. That is not concluded. I think we can do more. Our plan, we are today at the second year of our 3-year plan. And I think that the third one will show another increase. I'm perfectly convinced about it. Driven by this great opportunity of the energy transition boosted by renewable, for which the reinforcement of the grid is more than a necessity. So, we are there. I think during the last 2 years, 3 years, we were very much optimizing our resources. I think that we can do much more. We can do much more, certainly, through our daily growth with our assets, but also reviewing our assets for the future, which is also included in our plan and in our strategy.

Noted. And jut the last question. The shift from, like you said, the shift in terms of not the overall revenue, but a sort of sales mix from copper to aluminum. Now, if you could just comment on sort of the margin and if that could sort of be detrimental going forward if, let's say, the market is sort of used to a lower cost aluminum? Or you think there's enough margin there to offset the shift from copper to aluminum?

Yes. I can be very, very practical, giving some number. In 2022, the copper production was at around 92%, considering our total business in 2023 is at 82%, considering our total business. Despite this, I'm sure that you clearly identified in our number that the contribution margin is not deteriorating, on the contrary, is increasing. So certainly, we have different profitability with reference with the different segment. No discussion. And we need to identify the right mix in order to sustain our profitability, but it's not the metal who's making the difference. So, this is the clear prove that copper and aluminum are opportunities, but the metal has to become something relevant for us, while introducing, while designing, while anticipating the need of the market with a perfect design to cost. Obviously, in 2023, we were also increasing consistently our volumes, both in OCI parent company and in OAPIL. Even if you don't see in our sales, the growth was very, very effective.

Sure. Could you finally just comment -- probably the CFO can take this. Could you just comment on the performance of the aluminum plant in the fourth quarter because we saw an absolute flat number for the fourth quarter? So specifically to that, were there any one-offs? In general, could you comment what happened there?

We don't make any segmentation. This, I want to underline, and then I will leave the floor to Rinke for any more info you may need. But we don't segmentate our business, dividing copper to aluminum. This is not our segmentation. Our segmentation is a business unit, as you see in the chart. And the business unit in trade and installer, we have copper as well as aluminum. In power distribution, we have copper as well as aluminum. In renewables, we have copper as well as aluminum. So the business is not divided between copper and aluminum. In each business, we focus on customer-based requisite on design, specific design on customization, but not on copper and aluminum. We are not a standard cable company. For us, we are not producing copper and aluminum. We are offering services and product to the market. So, this is what we are interested to show and discuss.

Nothing to add from my side. Quite clear.

Yes, please.

No, I said nothing to add from my side. I think it's quite clear.

Sure. I think it's just been a function of probably some seasonality in your SG&A in the fourth quarter and probably that's the reason. And I take your point well noted. All right.

Thank you, Bishan. I can see Sameer and [ Abbas ] raising hands. Can we start with Sameer?

Sure. I have a question on like, what's your capacity utilization across various divisions?

Please? What is your capacity?

Capacity utilization at your copper and aluminum business.

We have a very -- if you are referring to our facilities in Oman, we can say that we have a very good utilization of our plant. There is some spaces depending on the mix. I repeat, we are not anymore a company producing standard cable. So depending on the mix that we are offering and depending month by month, we may be completely saturated or non-saturated, and pleased that we are not considered -- not be any more a company that is leveraging only on its local facility. In this moment, we are selling and delivering offerings in the market all range of products, also the product that we are not producing in Oman through intercompany flow, satisfying all the need of the customer, one point of contact offering all range of cables and services.

Okay. Clear. So, one -- so you mentioned about your -- you moved into more specialized products. So, could you give me like a revenue breakdown between like generic and specialized product in your sales mix?

You can see very clearly in the picture that is shown now in this moment on the table. When we speak about oil and gas, we speak more on specialized product tailor made based on specification coming from customers. It can happen also for trade and installers, but normally, it's more standard product. Renewables are requiring very specialized cable for the most part, Network components are all specialized product and service-related OEM is very much specialized. OAPIL is a totally different segment, not offering a cable product. So, we have different segments. In each segment, we may have standard product and specialized product. Again, as we are not differentiating our revenue sales by copper or aluminum, we are not differentiating by specialties and standard that are present in all the different business units that we are offering to the market. Sometimes, if the extra voltage cable are requiring to the market, we can offer from all over the world cables that are not produced in Oman, and that are also including installation accessory and special services. It's very much different, difficult to say how much is special, how much is not because this is not what we are used to calculate.

All right. Okay. Got it. So how the potential free trade agreement with India is going to impact you?

What does it mean, the frame agreement with India?

That's right. Free trade.

Free trade -- the free trade agreement. Personally, I think that India is and has been always a great opportunity for Oman. Maybe this is even accelerating. Please consider that we have a presence as Prysmian Group in India, and we have a presence with this small company, which is ACPL based in Chiplun, only dedicated today to specialties, means cable mostly related to instrumentation and control. So, I think that it can be an opportunity for sure, not maybe directly related to Oman Cable, which is more GCC based, but certainly increase all in all, overall opportunity for most of the producers, for sure.

Thank you, Sameer. Abbas, do you have a question?

Yes. Cinzia and Rinke, congratulations on a great year. I just had a question. I was going through your notes and I noticed the share-based compensation plan that's come about last year. And obviously, I think you guys will be the first probably in the country to do this. This is the question I actually frequently ask management if there's any part of the compensation that's linked to share prices. I think it makes sense to be compensated on that. The question I had is I noticed the share-based compensation is actually not in Oman Cables, although the cost is attributed in Oman Cables. But you're getting shares in Prysmian Group, the parent company. Is that the reason why the -- yes, so can we just talk a little bit about this? Yes. Right.

It is very true. First of all, thank you for this question because it's giving us the opportunity to underline how much we are people oriented, because these results are coming from the team, from our people. Sure, it is true that while increasing special care on the health but also the well-being of our people, we wanting to reinforce their spirit, their participation to the growth of the company. If the customers are happy, if our shareholders are happy, our people has to be happy too, which is why we decided, thanks to the partnership with Prysmian Group, to enlarge this opportunity also to the Omani population of our group people worldwide. And we introduced this opportunity, basically, are 2 opportunities. One is for our manager that has the opportunity to participate to the 3-year plan of Prysmian Group. So, this is completely financed by Prysmian Group. And the second one that we launched last year to really reinforce the spirit, the loyalty, the commitment of our people, we decided to introduce a sort of dream bonus that was related to the performance, part of the performance of the company and part of the personal performance of our people. We are so proud to say that 100% of our people became shareholder of Prysmian Group. And this was a benefit that when we speak about the valuable partnership with the Prysmian Group, we were bringing to Oman Cable, to the Sultanate, increasing the knowledge, the empowerment of the people and continuing transferring also technology, but also good practices that are positioning today Oman Cable between the first runner also in terms of people management.

Okay. And is there a reason why the shares were not allotted in Oman Cables itself?

Let's say, we have this opportunity all around the world. And first to all, as a first step, the Board decided to accept this opportunity that Prysmian Group was offering worldwide in order to have Oman Cable fully included in this program, that was valid already worldwide. So, I think this is a very important step. Let's see for the future.

Yes. And is this going to be an annual sort of OMR 1 million charge on an annual basis? Or this is a one-time sort of thing for senior employees?

No. This is related. I repeat, one is the long-term incentive, which is obviously based on a 3-year plan. The second one is a local incentive, including all employees, non-desk workers and desk workers based on the performance, both of the company and of the personal one. And it is based on a year performance.

Okay. Understood. You are leaving, Cinzia, now. I read the article, I think it was December sometime that you're going to take on a sort of broader role.

Yes. Don't make me cry with this.

I was wondering...

Because I'm so in love with the company and the country.

Absolutely. Oman is....

It is true that I was requested by Prysmian Group to take over a bigger responsibility worldwide. I will become responsible for POWERGRID at a worldwide level based in Milan, but continuously supporting this company and many other company worldwide, advising, supporting and hopefully, inshallah, bringing more value to this country, to the people and to our shareholders. I will be obviously leaving the floor to a great colleague of mine, Erkan. Mr. Erkan is today a Regional Manager for Prysmian Group. And I'm sure that he will be able to bring the company to the next level.

Thank you, Abbas. Any more questions? Or I believe we can conclude today's meeting. [ Jason ]?

I'm probably the only local person joining you in this meeting. I hope in future, inshallah, we'll see some young generation joining this kind of discussions. It's a really pleasure to be in this meeting, and I wish you the new future. I mean, I just read that you are leaving the factory to a higher position, inshallah. And I hope you spent a really good time here in Oman, the previous 5 years, I believe. I hope you enjoy...

And I will continue to spend in Rusayl. I will continue to spend. Once you touch this soil, you cannot forget, you cannot leave forever.

You are well known in the [ analyst calls ], our community and wish you the best always. I have small 3 questions. I hope you will -- I mean, I'll try to what you call this, talk in the way that you can understand me. I mean, from your experience, the 5-year experience you spent here in Oman, you've seen the culture and you've seen the business, your economy in person. So, can we see in future -- I mean, shortcoming years, let's say when a year or 2 years that businessman, they can invest something good also in the industry? They are specialized in Oman. I mean, since the existing investment, I mean, you have done really great job, whether it is raw material, depending upon your leadership wise and everything was really clear for the company itself. Can we see something in future from your -- you are here representing the company and you know the culture, you know everything. I mean, can we see something in future soon, inshallah, some good...

Absolutely. We are here to expand. We are always speaking on growth, on sustainable growth and we are here to improve and we will remain to improve. This is the only way we are used to make business. Investment were there for 2023. We accomplish all our plans. Nothing excluded will be there also for 2004. The first slot of investment was approved by our Board, more than OMR 2.5 million on last January to support the recurrent business, but also to expand our Renewable Excellence Center, brand new through special project. And I was mentioning some business cases are under preparation in order to enhance the opportunity of new investment in the country and outside the country.

And just a second question regarding your sales local -- your local share sales. I've just noticed has dropped down from 102 million to 76 million from what you call it, the parent company. The group was a little bit better, was because of the other company. The ammonium specialized company are doing really great job. So is there this drop in sales compared to the competition or the demand? I mean, is there any drop in demand in the local?

Let's say that it's difficult to say that there was a contraction of the domestic. Yes, if we look at a [ cake ] made by 100% last year, the domestic was 46% and this year, the domestic was 38%. But it is true that we increased massively the export. So the domestic was certainly affected by a minor demand, especially from utility certainly. But also from an expansion dedicated to export that made volume increasing, not necessarily sales but certainly volume, more abroad than in the country.

Can I ask the last question?

Please feel free.

I'm always the [indiscernible], what you call this Annual Meeting regarding the corporate social responsibility. The company has done just a great, I mean, result, amazing result and wish you the best, inshallah always. Can we contribute something from this profit a little bit more in the responsibilities -- corporate responsibilities, social responsibilities? I mean, can we see next time, inshallah, probably the company will be more deeply in the way how to help? I've seen your notice, your program of the, what you call it, the female STEM.

SHE STEMS. Sure.

Can we do something more, I mean, from the part of these kind of responsibilities?

Let's see. First of all, we are very happy that you appreciate our initiative and our effort in this sense. And because we are doing for the country, for the empowerment of the people, for the next generation of Oman. So, I'm happy that you appreciate. Your voice, speak loudly and is really relevant for us. Thank you. Secondly, I -- obviously, I refer to our shareholders, the decision of an increase of the CSR plan that we are ready to deploy is in the hand of our shareholders. We can suggest, and then we will see the results during our General Assembly in due time.

Thank you, Jaison. Bishan, I can see your hand is raised. Any more questions or we can conclude? Okay. Then I believe -- thank you, everyone, for attending and hopefully looking forward for the next good result and next meeting by mid of 2024. Thank you so much.

Thank you to all of you, and have a nice day.

Thank you all.