Oman Chlorine S.A.O.G. (OCHL) Earnings Call Transcript & Summary

[Foreign Language] Thank you for joining us today for H1 2025 for Oman Chlorine. This will be the agenda of our presentation. I'll go overview about Oman Chlorine, then we'll talk about subsidiaries. Then we'll review the numbers for both parent company and for subsidiaries. Then we'll open the floor for Q&A. So just to give you a background if you are a new investor, we started in '97 as first manufacture of chlor-akali with capacity of 100,000 metric tons of all the products. In 2007 and 2008, we were awarded His Majesty's Cup for the first best 5 factories in Oman. In 2021, we did an expansion for the main plant and increased 60% of our capacity. Then after that, we did a plant that producing calcium chloride, started in August 2022. We have very good HSE track record, and also, we are ISO certified. For the people that don't know about us, we're producing chemicals that goes into energy sectors and also goes into oil and gas and other manufacture as a raw material. This is updated for the major shareholder today at Oman Chlorine, we have Al Anwar Investments, they own 22%, Bank Muscat, 11.11%. We have the Social Protection Fund on 9.5%. Then we have Oman International Petroleum & Energy Services, they own 9.1%. Then we have Al Ikhtyar Trading and Contracting, own 5.16%. This is our capacity -- installed capacity of the products that we produce, hydrochloric acid. We produce 66,500 metric ton a year, caustic soda 50,000 metric ton a year. Then you have the capacity to convert the caustic soda line into flakes and the capacity is 7,200 metric ton a year. But currently, we're doing an expansion. So we'll have a flexibility to convert all our liquid into solid for the export. Then you have sodium hypochlorite, the capacity is 12,000 metric ton a year. Then you have a calcium chloride, both plant, the old one and the new one with a capacity of 55,200 metric ton a year. Major applications for our product, for example, hydrochloric acid goes into oil and gas, mainly for well stimulation or acid treatment. Calcium chloride, the main application is drilling fluid operations. It's called the drilling salt. Sodium hypochlorite goes into water treatment. Caustic soda are used in more than half of the commercial chemistry application to create hundreds of secondary components that turn into plastic, pharmacy and other products as alumina refineries, detergent and other products. Subsidiaries. So Oman Chlorine, we have 2 plants. We have 1 plant in UAE under the name of Union Chlorine, established in 2013. The plant located in Musaffah [indiscernible] area. The plant capacity today is 72.5 metric ton a day. Again, produce similar products as Oman Chlorine, producing HCL, caustic soda, we have again flakes and also sodium hypochlorite and the calcium chloride. The company is managed by Oman Chlorine. We own -- this is the ownership. As of today, we own close to 72%. Then we have 2 share of them is Horizon Energy own 16.7% and then Union Chlorine Holding, they own 11.3%. Then we have the third plant is in Qatar the name of Gulf Chlorine. We produce exactly the same capacity as Union Chlorine with the same nameplate. And again, the company is managed by Oman Chlorine. This is the ownership. We own 51% of Gulf Chlorine and 49% owned by Markab Capital. Then we have a separate unit that producing calcium chloride, our ownership is 35% and KLJ Qatar, they own 65%. And the JV name is United Chemicals. We'll move to financials. Bala.

So this standalone performance. So Oman Chlorine posted revenue of OMR 4.7 million in revenue and an EBITDA of around OMR 1.2 million. And we posted a profit of OMR 405,000 as compared to [indiscernible] half early as compared to last year, full year of OMR 1.4 million. Oman Chlorine Group posted a revenue of OMR 14 million for the 6 Months ended as compared to OMR 34 million for the full year last year. The EBITDA was around OMR 4.5 million, while the profit is OMR 1.13 million as against OMR 1.5 million for the full year. So profit-wise at the group level was far better than compared to last year. So here, we are seeing the trend from 2021 to 2025. The parent company's revenue fell by approximately OMR 24.2 million, while the EBITDA was dropped from OMR 23.8 million. Our PAT declined to OMR 42.7 million as compared to last year. We have been able to maintain our production capacity at 99.6%. The existing plant which is the old plant is maintaining at 94.5% and the new plant is maintaining around 106.93%. Main reduction in the revenue and profitability is due to local demand and supply pressures due to additional capacity. But the prices of caustic and other products remained stable during the course of this year. The export side, the volume increased as compared to last year. As regards the group, we performed -- even though the revenue fell, the profitability of the group increased by 6.4%, mainly due to the subsidiaries doing very well compared to last year. The international price is slightly lower, but still we are able to maintain the profitability because all the plants are performing at the full capacity. Future outlook. Caustic -- we are now in the process of commissioning our new caustic soda plant, which will ideally convert our liquid product to 100% solid product, which will be suitable for exporting. We are exporting -- we are -- this is scheduled to commence operations in third quarter of this year. We are continuously monitoring the oil price and chemical commodity prices globally. We are very optimistic that there will be demand for our products and price realization will be decent. At group level, our projected selling price of caustic soda remains -- expected to remain at the same levels, and we'll be able to generate stable returns. That's the end.

This is the end of presentation and we'll open the floor for Q&A So please introduce yourself and we'll be more than happy to listen to your questions and we'll try to answer. Any question?

If there is no question, I think we can conclude.

So thank you again, and hope we'll see you next year to review the full year of 2025. Thank you very much.

Thank you.

Thank you.