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

Good morning, everyone. This is Oman Chlorine investor engagement session for the year ended 2025. Is the voice clear? The voice is clear? So this is our agenda today. We'll go through those slides. So I'll give you a background about Oman Chlorine. So we established it in '97 as first manufacturer of chlor-alkali in Oman. We were awarded His Majesty's cup in 2007, 2008. We did an expansion in 2021, increased our capacity by 60%. And also, we built a calcium chloride units in 2022. And then in 2025, October, we added a bigger flaking capacity to catch up our liquid caustic soda lye to be converted to flakes. And we have a good HSE track record. As everyone know, our product goes into oil and gas sectors mainly, and then it goes also as a raw material for other sectors such as alumina refinery, petrochemicals and detergent. This is the updated list. This is the major shareholder in Oman Chlorine. So we have Al Anwar Investments. They own 22.01%, then we have Bank Muscat 11.7%, then we have SPF 9.503%, then we have Oman International Petroleum & Energy Services 9.193%, then we have Al Ikhtyar Trading and Contracting, own 5.162%. This is our capacity. So we are producing hydrochloric acid at 32%, the capacity is 66,500 metric ton. We have caustic soda lye, we are producing 50,000 metric tons. This is after the expansion. Caustic soda flakes, this is again after the expansion, we can convert the caustic soda lye to caustic soda flakes and the capacity it can go up to 31,950 metric ton. Sodium hypochlorite 12,000 metric ton, calcium chloride 35,000 metric ton. Then the main applications for the hydrochloric acid is oil and gas, mainly oil simulation or acid treatment. Calcium chloride, it goes into drilling fluid as a drilling salt. sodium hypochlorite, it goes into water treatment and purifications. Caustic soda, as I mentioned earlier, used as commercial application to create hundreds of secondary components mainly into alumina refinery, plastic, detergent and other products. We'll talk about the subsidiaries. So we have 2 subsidiaries. We have one subsidiary in UAE under name of Union Chlorine established in 2013. It's located in Musaffah industrial area. The plant capacity is 72.5 metric ton. Again, we produce similar products that we produce in Oman Chlorine, hydrochloric acid, caustic soda, sodium hypochlorite and calcium chloride. And Oman Chlorine is managing Union Chlorine because we own the majority. This is the shareholder structure. So Oman Chlorine own 71.93% and then Horizon Energy, they own 16.71% and Union Chlorine holding 11.36%. Then we have the second subsidiary in Qatar, established in 2008, located in Mesaieed Industrial area. The plant capacity is 72.5 metric tons. We produce similar product as Oman Chlorine and Union Chlorine. Since we own the majority, we manage the subsidiaries also from Oman. For the calcium chloride, we have a JV with other companies that are producing calcium chloride in Qatar. The JV name is United Chemicals. So this is the shareholder structure in Qatar, which is Gulf Chlorine. So as said, in Gulf Chlorine, we own 51% and 49% is owned by Al Mirqab Capital. Then Gulf Chlorine own a JV called United Chemicals. Gulf Chlorine own 35% and KJQ Organic owns 65%. Financial and future outlook, I'll give the floor to our Group CFO.

The parent company performance was below compared to last year, mainly due to more volume being sold as traded goods in Oman. The profit declined due to pressures on the margin. On a consolidated level, the company made QAR 27 million sales revenue as compared to QAR 34 million last year. The difference is mainly due to traded goods. The profit for the year was around QAR 1.6 million, which is in line with the last year's profit. The gross margin has increased compared to last year from 40.1% to 41.7%. And EBITDA as a percentage also has increased from 26.2% to 29.5%. The company continued to maintain its capacity at 98.9% and the existing plant, the old plant was maintained at 94.41%, while the new plant was around -- was maintained at 105.8%. The reduction in profits is mainly due to pricing purchase and reduced economies of scale. As regards the group, the group company revenue decreased by 21.5%, while the EBITDA decreased by 10.62%. Profits were maintained at the same level. Even though the caustic price has declined significantly as slightly as compared to last year, we were able to maintain the profitability during this year. Subsidiary Qatar posted a good profit this year and while UAE also maintained the same as last year. The company has installed a new flaking capacity at 75 metric ton and has commenced production -- commercial production in the fourth quarter. We keep on maintaining and monitoring the oil price and chemical commodity prices globally, and we remain optimistic for the product demand and price realization for the near future.

So this was the end of our presentation. We'll open the floor for Q&A. Any questions?

You have any questions?

Any question? [Foreign Language] So there is no question. This will be end of our session. Thank you very much.