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

So welcome, everyone, for the analyst meeting for Oman Cables, the first analyst meeting for the year 2026, presenting the audited financial results of 2025, which was a great year, by the way. On this call, we have our CEO, Erkan Aydogdu; and our Chief Financial Officer, Marcelo De Paola; and myself, Jad Atallah, the Investor Relations. I'll leave the floor now for Erkan to present. Thank you.

Thank you, Jad. [Foreign Language] Welcome, everyone, to our 2026 results presentation. So basically, our agenda will be today our overview, just to recapture, reinforce who we are, what we are trying to do more and more in the market space. Then we're going to look into the macroeconomics and how we see very briefly surely how the things are evolving, and the business environment is shaping itself. Of course, it's very, very dynamic, right? So the -- and the third point I'm going to share with you the sustainable growth, and Marcelo will help me to present the financial results of the year. So let's start with the Oman Cables overview. As we are the leading cable manufacturer, but more and more, a service provider, we are shifting more and more into the direction, thanks to the innovation and all the efforts that we are doing. Here, basically, you can see that we have a unique asset in Oman that's a leader in Oman, but also on the region. Mainly, we have four advanced facilities, which we are very much proud of. We have two plants in OCI, we have one OAPIL in Sohar and we have an ACPL in India. We are also very proud to share that we have the Renewable Excellence Centre. With electrification trends, we want to build more and more into this center to supply not in Oman but also for region and I was touching in the last meeting on the Sustainability Academy. Now also, we are very happy to share that our academy has been integrated and already very much in use, supporting Oman's journey through sustainability, but also engaging with all the stakeholders that I will give more detail in a minute. We are more than 800-plus employees. And when I say that we have a quite unique position and value generation, I really count on two main dynamics. One is in Oman with the local roots, 40-plus years experience, so very, very historical company, rooted in Oman, and the main ambition is to move through the cleaner, more efficient and future-ready infrastructure and embedding sustainability more and more. Innovation, it cannot be without innovation, sustainability, and also we are accelerating in our efforts on the low carbon economy. And we believe these are the key drivers of the industrial transformation, which Oman Cables represent a very strong position on the industrial space, manufacturing industry in Oman. Okay. This is very key, very important. This is where we are building our strength, but also at the same time, we are leveraging on our strategic and technological partnership with Prysmian. Prysmian is the worldwide global cable and solution provider and leading the energy and the digital transformation. So Prysmian has more than 140-plus years. So if you combine these together, we are talking about 180-plus years of experience. So we can position Oman Cables as sultanate's leading cables manufacturer and moreover, end-to-end solutions provider and also the strategic enabler of the region's energy transition. When we look to the macroeconomics and the business environment very, very briefly, let's look first to the world. Of course, other things happening in the world. We see global growth stabilizing at 3.1% to 3.3% level. So the -- we see stability in the growth, inflation moderating at the same time. And we see that energy market is broadly balanced, meaning that it is a resilient growth as technology and adaptability offset trade policy headwinds. In some way, there are the headwinds. On the other side, the industry is solid. So we have a balanced position so far in our industry worldwide. Of course, we have to recognize that the base metal prices are volatile. So as we speak, copper is all-time high, about $13,000 by metric ton, and we are using, of course, copper as the input -- one of the input material for our products. But as we said in the previous meetings, we are hedging our position. So we don't speculate anything over here. So we fallow, we take our position, but we manage also accordingly. When we look to the region, GCC itself, we see, of course, a better or higher growth trajectory, which is positive, by 4%. And we see non-oil growth. As the Oman Vision 2040 is requiring also the diversification of the economy, we believe non-oil plays a crucial role in Oman to grow, and we see that non-oil is growing more than the oil, which is completely consistent with the strategy in Oman. We see also that the fiscal and investment momentum sustained. So on GCC region is like this and we look to the Oman pretty much the same. As I was saying, the economy here in Oman is stable. GDP growth is more on the non-oil sectors with more than 4% and reducing the oil dependency. So basically, this is pretty much on the countries in the GCC. We see also the fiscal situation remains very strong. And also lately, we launched -- Oman launched the 5-year development plan, which is, again, completely consistent with the growth rates of the 4% non-oil and the 2.6% for the oil industries. Okay. So when we look to the -- our results highlights for 2025, our sales has been concluded in the year of 2025 with OMR 287 million versus OMR 268.7 million in 2024. When we look to the EBITDA, we have surpassed OMR 30.4 million in 2025 versus OMR 28.7 million in 2024. Our net profit now is more than OMR 24 million, OMR 24.3 million to be precise versus OMR 22.6 million last year. You remember that 2024 was another good year in Oman Cables' history. So I'm happy and proud to see that our performance in 2025 continued to overcome a strong year 2024 quite significantly. Then here, you are able to see now we are embedding more and more the sustainability and also the carbon emissions, greenhouse gas emissions into our results. So here, you see here minus 5%. This minus 5% means if you compare 2025 carbon emissions of our operations, which is mainly Scope 1 and 2, and if you compare this with the baseline of 2024, we see a 5% reduction of the carbon emission in our operations. So meanwhile, our operations are getting more busier and activities are more dense. But on the other side, also the carbon emissions are lower. This topic is a big topic that we are working on it, and we will talk a little bit more on that. So in a nutshell, we try all our best to embed sustainability at the core of the performance and the growth. So we are proud of our results in 2025, record results, but we are also very much happy that we are taking some steps, important steps towards decarbonization. We believe this chart is extremely important to better understand and evaluate our company position. So we are not just a cable maker. We are not just trying day by day, but we try to put a medium- and long-term vision in the sultanate and beyond. So the environment 2021 and 2024, we started our sustainability journey. So it has been some time ago, so you see that's years back, and we committed on the sustainability. In 2025 onwards, we really lead by example. We try our best because we have the role model ambition. We have MoU signed with the Ministry of Commerce on our role modeling. So everything we do, we try to do the best high-quality and we present Oman in the best way in Oman, giving back the community, creating value, bringing knowledge and really being an enabler on the Oman Vision 2040 ambition. So our vision is simply linking our region to a sustainable future by creating value in every space that we activate our activities. What are our key drivers? Of course, the first and the most important one is Oman Vision 2040 and the 2050 net zero commitments. So we believe very much that we play a strong part over here, and we try to also engage with all our stakeholders. And secondly, GCC national priorities as we are very active in the region GCC. So we also be very consistent with the national priorities and the commitments. And also, last but not the least, Prysmian ambitions, which is the global leader, is also a good way to look what they are doing and trying to create the best performances, best applications at our market. So our ambitions are four. First is the raw modeling, which I touched already. Second is environment, climate change. So that is very, very important, linked also with the decarbonization. Third, technology ambition, innovation. Innovation is everything to create a product solution and also social, people. So how we lead with integrity, meanwhile driving all these four transformative business and the initiatives, which is also very, very important to have a sustainable future. So creating sustainable value is in the DNA of Oman Cables. So with 800-plus colleagues, plus their families, plus our all stakeholders, upstream, downstream, we try to create a community and we try to create value. We are very much active in many different diverse areas. So we can talk about 30-plus stakeholders' engagement activities, 5,000-plus stakeholders engaged with one shared goal, which is a sustainable future. We just here mapped some examples of 2025. Of course, we do a lot of activities. So we cannot have -- we don't have enough time to talk about all of them, but they are very nice projects contributing to Oman and the region, and which the three that I would like to talk a little bit about is this Sustainability Day in 2025 we launched. We have invited, in this case, in our academy physically also in Rusayl our stakeholders. And in this case, on the left photo, you see one scene from that. So a lot of valuable discussions with only one question, what we can do better for Oman and the region. The second one is a greener Oman. So just to be consistent on what we are doing, with all our colleagues, we planted mangrove trees to help decarbonization. And that is the ambition that we are having, all of us. So we bring that ambition into the field, executing sustainability on the field. And the last one, of course, a tradition we are very proud of, and we combine the culture and innovation and we create events and we create integrity to move through the culture and being innovative in everything what we do. So in a nutshell, sustainability is a driver for the growth and the shared value. Academy itself, I think it's important to recognize this. This is not a building. We did not create a simple -- simply a building. We created a platform, a transformative platform, and this is facilitating the capabilities for low-carbon inclusive and innovative future. So the experts, colleagues, stakeholders, suppliers, partners, they are all -- we are putting them together in different events, and we try to be understanding the action plans going forward, working together in a collaborative way. So this is accelerating the leadership impact and sustained capability across network and also links the vision to a sustainable future, of course, and the platform for learning, innovating and shared commitment and impact. Despite our integration has been done very recently, towards the end of the year in 2025, which is exactly 26th of October, we have done already seven engagement activities over here, just to share with you that how interactive and how effectively it is being used. If I look now from now to the next weeks and the months, it is pretty much booked with many, many events. So it's pretty much engaging and very proud to have an academy, an international hub for the industry here in Oman in the Sultanate. Having said that, I would like to ask Marcelo to go through some details on the financial results. Thank you very much.

Thank you, Erkan. [Foreign Language] Well, sales, you can see we achieved OMR 207 million in 2025, higher than 2004 (sic) [ 2024 ], OMR 269 million. It's for us a regional focus of the portfolios beyond our region. If you go by business, you can see the mix helping us in this trend. Electrification had a positive trend and a greater value to us during this year. For the profitability, you can see we have achieved OMR 40 million contribution margin versus OMR 38 million for the previous year. Better mix helped to grow in profitability and wastage, sustainable value creation for 2005 (sic) [ 2025 ] and the future. Well, the evolution for the sales. Part for this growth coming from the price for metals, as Erkan commented before, and part for it is coming for the volume for the electrification business. EBITDA margin achieved OMR 30.4 million, is 6% better than the previous year, and net profit we achieved OMR 24.3 million, 7.4% better than the previous year. For the balance sheet, you can see net working capital by sales is a very good result, 18.7% this year versus 22.2% in the previous year and achieving 91 million plus cash in the net financial position. Strong cash management continues. Focus on efficient net working capital control, diversification of the risk. It's important to say, obviously, the pressure for the metals is a key point for this year and create some additional pressure for the company to manage the cash flow here. I think it's enough to the finance.

Thank you, Marcelo. And just to conclude from our side, the commitments, we remain with the commitments going forward. Decarbonization road map, we are working on it in a very, very structured way and in a very detailed way, I will say, and we target to have a lower emissions, higher resilience, a kind of decarbonization road map can be also be useful for the rest of the industry. So team is working in a very detailed way. Then design for circularity is going ahead as well with the smart materials and less waste to give second chance, second life to the materials. Empowering people and safety is our commitment and the shared commitments across the growth, innovation and solution provider. So growing sustainably, innovating boldly and delivering together. So we keep up the journey at our best to deliver better results to the market. Thank you very much for your time.

Thank you, Erkan. I believe now we can open the floor for some questions.

And before giving the floor for the questions I can see in the chart, actually a couple of questions asked. Let me read them. The first question is maybe for Marcelo or Erkan. Why are we accumulating so much cash on the balance sheet? Is there any planning for major capital investment?

Marcelo, if I can. So basically, the good performance of the company is reflecting to the cash, which is good, and also that gives the financial strength, which is a key enabler in our market. As we say now, we need the cash position to also in our operations with the volatility in the market space. And of course, it gives us more encouragement for any potential other actions may come. So that is a consequence of a good performance, and we are trying our best to get the best benefit out of it. Marcelo?

Corrected. The only point is we start to planing some investments to increase our capacity, increase our performance, and also, this cash can help us to support it.

I can read also another question in the chart. Can you please confirm your capacities in the copper and aluminum segments? What is the capacity utilization? Please elaborate on your CapEx plans? From [ Deepak ].

Yes. We have quite large capacities at Oman Cables. In the areas that we were -- we think that we can get more opportunity was on the medium voltage side, which we already declared the capacity expansion that we are planning the investment on that area. Rest of the areas, we are utilizing our machines at the best in one side, making them more efficient, more digital. That is also a very, very important area that the teams, operation teams are working on it with the existing machines to make them more digital and more efficient. And that also gives us a space for further opportunities. It's, of course, very dynamic. So it's not so easy in our industry to say our situation XYZ is dynamic, but I can say that we don't have capacity problems as we speak. On the areas that can be important, we are already taking actions.

A question on how is your performance on GHG emission against the targets allowed by the authority.

Okay. Thanks for the question, first of all, because we really value decarbonization, the efforts. So we try to put our targets beyond what is required. So we try to raise the bar. So we will declare more detail probably in the next period. So we are perfectly aligned and in many cases, at a better level than what is required on the greenhouse gas emissions.

Okay. I can see also another question in the chart from [ Taha ]. Let me read it. Thank you management for the presentation and elaboration on great year performance. The question is as follows: will you be able to sustain the same margin under the current commodity prices? And can you please shed some light on your current capacity and the utilization rates for the year? And what was the split in terms of copper and aluminum cable? So practically three questions in one.

Yes. Thank you. I think a quite detailed questions. So I appreciate the question. First of all, thank you, of course, recognizing the performance, which we put a lot of effort. So your positive feedback is a great encouragement for us. Coming back to the questions. Okay. So first of all, the margins, we would like to improve, of course. Commodity prices are commodity prices. We cannot control commodity prices. We will focus -- we are focusing all the way what we can do our industry. It's true that when you have the metal price or the components prices higher, mathematically, the percentage-wise, there is an impact. So it's a mathematical calculation. We are looking for the absolute marginality. So I think that is very much understandable. So we look to the apple-for-like what is our performance versus the past, how we can do better and commodity prices, we manage at our best. Of course, we follow very, very closely, and we try to avoid any risk can happen on immediate increase of any component, and we need to reflect to the market. And also one part we would like to eliminate with some efficiency, cost reduction activities that we are working, the team is working very, very significantly. Coming back to the second one, the actual capacity, I already explained, we don't have capacity limitations as we speak, and utilization rate for the year remains at the higher side but not at critical levels. So we still have space for the market growth. And on the copper and aluminum, it is really very dynamic. So it depends which kind of projects we have, and Oman Cables are prepared to supply both categories in the best service and the quality to the market.

Okay. Then let me go for [ Shaheen ]. In the context of very high copper prices and ongoing commodity volatility, how effective is cost pass-through currently? And what steps is the company taking to manage this volatility on a sustained basis?

Okay. Yes. Thank you again for the question, just a bit reinforce. So on the metal, we don't speculate anything. So we are hedging 100% back to back. So on the metal part, we don't have risk. Of course, when the market goes super high at the metal levels, then there is a reaction in the market to understand if this is stable and high or it is volatile, can go down. So there is a kind of reaction time for the market to digest. So we are following very, very closely that side. On managing that volatility, as Marcelo was highlighting, so the higher metal, of course, consumes more cash for finance. For the companies that doesn't have the financial power, it is a weakness. On the other side, for us, for Oman Cables, it is a strength. But of course, we are living in this environment. So we will get impact, of course, but we are preparing ourselves all the way to do our best in many, many actions. We're managing in the best way our working capital, looking to our inventories, receivables, payables and try our best. So at the end of the day, I believe Oman Cables is doing all the best on such volatility and really eliminating the impacts coming -- that may come to the results. So, so far, we are not having very much a direct impact.

Thank you, Erkan. I'll go for the questions. I can see [ Izul ] raising your hand. Please, the floor is yours.

Yes, sure. I have a couple of questions. I think I should go one by one just for it to be clear. First is, based on your business plan, how much do you think that you can grow from now heading towards, say, the next 5 years? This is my first question.

Yes. Thank you for the question. So of course, we are making our plans, and I don't want to give a specific number because obviously it's dynamic. So we want to grow as the market grows. And business by business, we can have different growth rates. So at the end of the day, we want to get the best opportunity out of these growing markets. So definitely, we want to grow, absolutely, no doubt. We put all our ambition there. But at this stage, I will not give a specific number, which can be misleading.

Okay. Is there like some like a range, maybe like single digits or double digits just kind of?

We will do our best. It's difficult to say a specific number.

Okay. Second question. When you say that you don't have a capacity limitation, what do you mean by that? I mean, how can a company doesn't have that because -- don't have certain sets of capacity?

Yes. Let me be more clear. We don't have a capacity issue means we are able to deliver our orders to the market. And of course, we have a space that still when the market grow, we can still load the plant at this. Of course, we have a capacity limitation. If the market grows by double, triple, of course, it is -- we don't have infinite capacity. But so far, on the areas that we may feel that we can have some pressure like medium voltage, we already took action and we are investing. So I don't expect the short-term capacity problems.

Okay. And you said that your current utilization rate is high. Can you give like some range there, maybe like 70%, 80%, this kind of range?

Yes, we can say so. I mean I don't want to give again a specific number on the capacity utilization, but we are not saturated very, very low, and we are not at the 100%. So you can make your number. So because it's very dynamic. So 2 months later, we can have a different number, and then 3 months later, when we execute a project, it can be different because it's also very much a project-driven business, cable business.

So throughout the year, has it been always this level? How do you see it?

Throughout the year on the areas that we see some, let's say, spontaneous higher capacity, we took our actions. Again, in the production, we can also take actions to be more efficient, plus we can make some investments. So we are combining these two elements. And throughout the year, we were able to manage very successfully our situation.

Okay. And next question is in terms of the -- you said, in terms of the volatility of the metal, you have said that you are hedging 100% back to back. So how did you do it?

So basically, when you receive a commitment from the customer, right, let's say, an order, our systems are able to calculate the -- what is the metal content of this, and we are going, and on the supplier side, we are hedging this, meaning that we are linking this order with the supply. In this case, it is the same level.

So basically, you don't do any inventory stocking. What you do is based on the order, then only you go to the market and supply. Is that what you're doing?

Yes.

Okay. And the next question is say that over the years, the margin has improved. So what will be the -- if you can pinpoint a couple of reasons, the improvement in the margin in the next -- in the past few years, right? So is it due to higher utilization rate? Or is it because of better product mix? Or way you're pricing?

Yes, it's a combination of different items. I believe we drive very well product mix, channel mix, innovation, services, Oman Cables is very active on both areas, very diversely trying to create a solution provider DNA more and more. And in this case, of course, our global technological partner is a big strength. So the mix, channel and the product and the value-added products are creating a better marginality in the last period. We would like to continue. Of course, there's also competition. So on one side, you have the pressure. On the other side, you try to diversify and make cost reductions. So it is a combination of many different areas, clusters that Oman Cables is trying all the best through.

Okay. Just two more questions for me and then I'll then -- what's the next -- what's the CapEx requirement in the short to medium term for Oman Cables?

I was very much on the questions, Marcelo, maybe I pass this question to you. But again, just from my side to make a very quick comment, it depends on the dynamic situation of the market. So we evaluate very much in time, in real time, we make projections. And in case we see a necessity, we plan our investments accordingly. Marcelo?

Thanks, Erkan. Thanks for the question. In reality, I think the company is very strong now for the cash. And the main point is to defend this cash exactly to take the opportunities in the market and to invest where we can possibly to grow in the market.

Okay. And last question is in terms of competitive landscape for Oman Cables, how much of market share do you have in Oman and also relative to the GCC market?

We are an important player in Oman. Again, difficult to give a very one number itself, but we are -- of course, we are having important market share in Oman and also in GCC. If you look to the evolution of our sales, domestic, nondomestic kind of, so I think the -- in one side, we put all the leverage in our home market because Oman is our home market. So that is the most important market for us, of course, but also beyond Oman, there is also GCC and the rest of the world. So we try -- we believe that Oman Cables has a very good and outstanding reputation in the -- all the touch base with our partners, customers on the quality, on the service, which is not given. So we are leveraging on these capabilities, on the competitive landscape to engage more and more in GCC area and in the rest of the world.

So basically, are you the leader in Oman? And is your market share significant in Oman market?

We are having market share in Oman that we believe it is fair for us. So I don't want to create a number in your mind that's too large, too low kind of thing because obviously, it's very dynamic. Project by project, everything changes. In cable, it's not so easy to say one number straightforward. But it's our home market, of course, it's very important for us.

Thank you, Izul. I can see also a couple of questions in the chart. I read Shaoor, Vision Capital. You mentioned in one of the slides that the 6.8% increase in sales is partially due to metal price increase. Should we expect a decline in sales if copper price reverse? If so, what would be the impact on the bottom line?

Marcelo, I think you were commenting this. Now this question is for you.

Okay. Thanks for the question. Our pricing, part of our pricing is a metal, metal expectation, you reverse the price for the metals decreasing the sales. It's true. But the impact for the profitability is zero because we've hedged 100%. From the business point of view, we can decrease the sales but not impact the net result in the end.

So I'll follow up with the question from Shaoor, because I see also he wrote, could you give us a number by how much in percentage term your capacity would be increased after the medium voltage capacity expansion, what material would be the impact on top line post expansion. And then I'll come back to Shaheen.

Yes, capacity expansion that we are trying to put, of course, again, it is assumptions we put around the business case, the trends, what we can do after the investment happened, the utilization. So there are many, many dynamics that can go different direction, of course. But we are thinking to grow more than 5%, let's say, can reach up a bit on the higher side, single-digit growth on this expansion as also Oman Cables is quite large in the volumes. And we are looking for it because that will leverage us more in Oman and in the region on specific product category and the channel mix.

Thank you, Erkan. I read a question from Shaheen, United Securities. Saudi Arabia is prioritizing certain projects. We just heard Asian Winter Games postponed. As a corporate, will you be impacted? Also, we have seen heightened geopolitical risk in the Middle East region. Has Oman Cables witnessed any supply disruption? Or are you considering rerouting your trade routes?

Thank you very much. I think like the other questions, this question is also a great one. So thank you for the questions. We observed the same. The KSA is a market that, of course, we are always looking, making business and trying to understand how the evolution is going on. We see exactly the same like in the question. So some prioritizing the projects is happening. So -- and we are trying to be pretty much following very closely and trying to understand which market, which projects we can be more selective as well and trying to mitigate the risk if there is a risk in some certain markets. I think our market gives us a lot of opportunities in different geographies and different business segments. So we are not worried about this selective prioritization of the Saudi projects, but of course, we are following and trying our best. So, so far, no impact at all. The second question is coming to me also quite often is what about the geopolitical risks in the Middle East. What I can say is that there is no direct or indirect impact so far. We have quite enhanced committees that we are following as Oman Cables, the evolutions, we have A, B, C plans all the way. And so far, no impact. In case of the some supply chain disruptions, I think here immediately, Shaheen is mentioning the Red Sea kind of crisis that's happened in the past, so we can reroute the supply chain. All these things are actively available, and we focus on our job, and we try to do it in the best way possible. We create our plans A, B, C to mitigate any kind of risk can happen.

Thank you, Erkan. Reading a comment, then giving the floor over to [ Joyce ]. There was a comment, just not to miss to read it. Please consider share split to make your share look cheaper, a comment on the chart. It's not a question. So thank you so much. We'll go for Joyce. Joyce, I can see you have a question.

See, one of the questions that I have is on your margins. When you talk about the contribution margins, renewables has been one of the major margin contributor. But in the last 6 months, we are seeing that there's a moderation in the margins from as high as 20%, it has reached almost 11%, 50% -- 45% decline. So what are the reasons for this? And how do you see the margins in -- overall margins going forward?

Yes. Thanks for the question. Renewable project is very much a project-related business. And every project has its own dynamics. And it is also a competitive arena there is also, I would say, at higher levels, as renewables is growing and of course, takes a lot of attention also that part. So the project by project, it goes in a different way. So we are following a pipeline on the renewables, and the marginality that we try to do is we try to also make important cost reduction activities and try to get the best prices available in the market. So going forward, not necessarily it will be a trend to continue to decline. We try our best to be in these levels and if possible, to improve further.

All right. And the next question is on the capacity expansion, which you have announced for the Rusayl plant, and you mentioned that around 5% of the revenue growth that you're looking at. Can you quantify this one in terms of either in tonnes of metal or in kilometers of cables that you're planning to add the capacity? And also, can you please tell us what's the current medium voltage capacity that you have in terms of metal or like whatever it is?

Okay. So let me give you one number. So in this case, I also shared some numbers or this new investment is depending on the product mix and the category that we can produce on these lines, which can be different. So we are talking about 8,000 to 10,000 tonnes of cables all the investments, right? So this will be coming up as an addition, as a capacity capability. But again, it is very much on the mix related. So we'll see which kind of mix will be available in the market by project, but I can say so.

Okay. Yes. That's the next question that I have on the product mix that you're planning from this capacity. I mean, will it be the same products that you're planning to produce? Or will it be more specialized products...

A combination. A combination of the present and some more dedicated, but it's a combination of the products we are planning to produce on these lines.

Okay. And when do you expect this capacity to go live?

2027 second half, maybe second half, maybe last quarter, so around there. So it is pretty much now in the work in progress on the clarification of the -- we are ordering the related components of the expansion. So we'll see how it will be moving. But in 2027, we would like to finalize.

Okay. Erkan, you have mentioned earlier on the returns profile but -- now in your announcement, you mentioned that there will be -- you're targeting a 7-year payback period for this investment. Will it be possible for you to explore and share with us the major assumptions that you have used for arriving at this number? And when you say you have a 7-year payback period, what's the kind of EBITDA margin and what's the kind of capacity utilization that you have assumed to arrive at this number?

Yes, we'll see. We'll see what is available. Of course, we have a certain calculations over there. And the point here is which what I can say is not just one line that we are adding. We are adding a capability on the medium voltage. So that's why the payback is like that, and we'll see which kind of additional information can be shared.

Okay. And the last question is on your cash position. You have around $200 million in your cash. And is there a specific target number that you have in mind now for keeping in the balance sheet, after which probably the additional cash flows, that will be distributed to the shareholders? Because your payout ratio is just 35% and you're keeping it very stable at these levels. So what's your strategy in terms of keeping cash within the company? And also, you've mentioned during this call itself, you're looking at some potential other actions. Can you please elaborate on what could be the potential actions that might -- that you have in mind?

Marcelo, maybe this question, you can support.

Sure. Thank you for the question. Here, the point here is, first of all, the idea to maintain this level for the cash consider you have a very good dividend distribute every year from this remunerate for the shareholders. And the cash generated help us exactly to support the business to grow for this variation for the metals, for example, this help a lot to us to support this business. And the other side is to take some opportunity for the investment. To speak about for this, we have now this new plant for the medium voltage and the idea is to continue to analyze alternatives. I think when you have more clear position about it, we can share for the market.

But Marcelo, when we talk about the new investment, it's only 10% of the cash balance that you have, that you are deploying. And your return on this cash, return from this cash, 3.5 million or 80 million average investment -- average cash position, that's only 4% return that you're generating. Why don't you share it with the shareholders so that if they have an opportunity to generate an additional income, why don't you leave it at the hands of the shareholders?

I hear the point. Again it is strategy for the company and the company is thinking in the future. The idea is to continue to grow, to continue to have the opportunity to grow in this market. And obviously, they need to use this cash for the opportunities in the future. I think this is the point. And I think the remuneration for dividend is really, I know in my opinion, is very good, and the idea is to maintain the cash to create this opportunity in the future.

So do you have any target number in mind for the cash balance to reach?

Again, for -- go ahead, Erkan, please.

No, we don't have a specific cash target in our mind. We try to have a strong position and then manage the volatility in the market that we discussed also the high volatility will be an impact on the cash. Then we are trying to look to the growth opportunities and create value. So it's a very dynamic market that we operate. So we will go evaluating all the possibilities going forward once we receive a topic that we can share with the market as we have done and we will share with the market.

Thank you, Joyce. [ Abbas ]?

Congratulations on a great year. I think I'm going to just continue on Joyce's point. The fact is that your cash flows that you generate from your annual operating business itself is 30 million. So any sort of expansion -- organic expansion that we've seen over the last few years has been more or less comfortably covered from this operating cash flow that you generate. So can one approach you with some inorganic opportunities? If we have investment banking teams, should we start approaching you with inorganic expansion opportunities in the region, companies you want to buy out, cable companies? Is that something you're open to as a company as a growth strategy?

Yes, we are open. Also for us, growth is organic/inorganic, but we need to have a clear, let's say, position to share with the market. So the -- in order to make organic growth, you can have the cash, but then you need the other party to want to sell and then the business, let's say, alignment and then a lot of other things, which are very, very important. So we are looking to the opportunities, both organic and inorganic. And if something evolves, of course, we will share with the market.

And the only second point I have is I watch Prysmian, the parent, when it comes to how they handle the investor relations out of Italy. And they have a buyback program as well, which Oman Cables has never considered. Now given that we have these best practices, thanks to the shareholder, can we consider a buyback in this market?

Okay. So it's true that Prysmian is a shareholder and has some practices. Of course, we'll look into these tools. And it's not easy to say we will consider this kind of tool at this kind of time. So we are looking into them. And if we believe that there is a value in doing that, we will communicate and we will do. If not, we don't want to create unrealistic expectation or misleading comments from our side.

Thank you, Abbas. We still have 4 minutes for the meeting. Any more questions? Otherwise, we really appreciate the interaction, all the questions raised. Great. I can see no more questions raised. So again, thanking everyone for joining us today, and looking forward to see you during the midyear. Thank you so much.

Thank you very much. Thank you. [Foreign Language].

Thank you.

Thank you.