Oman Fisheries Company SAOG ($OFCI)

[Foreign Language] Hello, everybody. Now this is Oman Fisheries, discussion session concerning the annual financial statements of 2025 plus the first quarter of 2026. So now this is an open session, and all our esteemed attendees will have the opportunity to raise any concerns or make any questions directly to Mr. Dawood Al-Wahaibi. So please go ahead and start. There is no preference. All attendees are equally welcome to make any questions? You can raise your hand, and Mr. Dawood will directly reply to you.

[Foreign Language]

The question is in regards to the potential entry of a new partner or investor in Oman Fisheries and if there is any sign of funds coming in into Oman Fisheries. Now this is a norm story that we can make it short. The answer is yes. There are negotiations in the background. It's still in the early stages. Board members as well as executive management, they are working as hard as possible and as quick as possible in order to conclude the best for the current shareholders and the best for the company going forward.

[Foreign Language]

[Foreign Language] Okay. The question is concerning if we can reveal anything about the negotiation. Now from where we stand at the moment, we cannot reveal any -- or disclose any of the negotiation at the moment. But due to the nature of the company, what I can tell you, Khamis, the parties, the involved parties are all local Omani firms.

[Foreign Language] First of all, the obligation of the company, as you have noticed from the audited financials, company sitting at around 3 million of obligations, a mix of payables and loans. My major question here is, I believe there is some agreement between the major loan provider and the company regarding shifting the obligation from an overdraft to a term loan. Is there any progress to that matter or any restructuring as well as do we have a significant from the -- shift in business model. And yes, these are the 2 questions that I have.

Okay. We just -- we've concluded the migration from whatever we were to term loans with the major lenders, and that is already signed by the Board as well as lenders. When it comes to the operation model and the status of Oman Fisheries where we are with the turnaround plan, the major work you have seen the effect of it in the reduction of the operation cost of Oman Fisheries, generally speaking, as well as in the admin, logistics, lots of savings were made. Also, we have gone through the uplifting of the manufacturing and specifically in [indiscernible] transformation of Ghalah plant is well underway and the production is just awaiting for the new investment to arrive in order to start for the ready-to-eat materials, things like burgers, fish fingers and the rest of it. So a lot of work has been done. And the case of Oman Fisheries with its financial situation is not new to all of us. And we have been trying in order to elaborate and bring the facelift into the future because manufacturing wise, the company is still very primitive or was very primitive. And now we have done a lot of work in the factories, in the branches as well as the management and operational principles in order to be one of those companies that are ready to go into the future.

And regarding the future outlook, what is the outlook that you see regarding now the -- yes, we have seen a significant improvement in terms of cost cutting and improving the revenue streams. Yet there is still some legacy challenges. So what is the outlook for the business upcoming years? And is there any visibility for a feasible turnaround and whatever resources and assets that the company have today will be sufficient to support that plan?

Well, let me just -- or allow me to give you a piece of confirmation. As standing in '20 or before, the company needed to work around 40,000 metric tons per year to break even. With the turnaround that we have done and all the polishing that we have done, the company now need about 50,000 metric tons, which is less than 5% of the annual production of the Sultanate. And out of 5 branches, I am certain all the experience that we have and the new [indiscernible] that we have laid in, I am quite certain that Oman Fisheries, once it's -- the cash is allocated into the company, will exceed everybody's expectation and perhaps break even before the end of year 2027. Later on, the question would become how Oman Fisheries would treat all the losses of the past 10 years? And that's, I think, the discussion that will happen between the potential new partners as well as the old shareholders in order to see what to do with all those legacies. I hope I answered your question, Mutasim. Any other question or notes that you would like to ask about or we can help you with?

So we are still waiting if there are any questions or any discussions from our guests?

Samir, I would request if you can give us a very high-level highlights regarding the financials in terms of revenue segmentation, margin improvement so on.

Okay. And Mr. Rasman, please.

Sure. Let us share a small presentation of -- we have prepared a small presentation that we can share and go through very quickly.

You are able to see the screen, Mr. Mutasim and the audience? The screen is visible?

Yes, it's clear for me.

Yes. So I'm going to present a very high-level presentation for the results of the year 2025 with the comparison of the previous year. Yes. So in 2025, if we exclude the depreciation, which is a big part in the cost of sales, particularly after the derevaluation of assets last year, there is a 67% reduction in gross loss, which is adjusted without depreciation. Despite the significant reduction in the revenue, the EBITDA has improved by 45%, owing to the cost control measures that we have taken. The contribution margin purely earned on the fish, there is a shift of 19%. And last year, it was about negative and the closing stock is reduced by 54% in 2025 compared to previous years. This is a very high-level comparison of the quantities that we have done. You can see in terms of sales quantities, there is a reduction of 61% and purchases, there is a reduction of 52% and the revenue overall in terms of Omani riyals is declined by almost 55%. The closing stocks there reduced by 54%. This is a carved-out P&L comparison from 2020 to 2025. In many years, there are onetime adjustments like sale of a subsidiary or revaluation of the assets. So we have all put them down the line so that like is compared with like, and we can see the comparison of the performance of the operations. So you can observe that from 2020, where the revenues were OMR 12 million, it has come all the way down to almost OMR 2.1 million in 2025. The major reason we know about the decline is not having enough working capital available to us. However, it is worth noting that the contribution margin, if you can see the green lines and the red one, so in 2025, the margin is around 17%, which was negative last year. In terms of gross loss, you can see last year, it was OMR 845,000. This year, it is OMR 307,000. This is without depreciation. Most notably, you can see the EBITDA, which is the best in the past 6 years despite all the cash flow difficulties, the reduction in the revenues, you can see the EBITDA loss is OMR 1.3 million, which is significantly lower than the loss of 2024 and the previous years. This is a bit more explanation about the operational model, which we have implemented and which has resulted into certain improvements in the financial results. We have defined a product mix in the new operation model, where you can see in the graph, there are Demersal, large pelagic, and small pelagic. 2025, you can see that 52% quantities are only small pelagic. Whereas in 2025, we have shifted this towards the Demersal which are high-value items with more profit. So you can see that Demersal is dominant among our sales quantities because of which even if the sales have reduced, we have generated better margins. The average selling price has improved by 15% compared to the previous year. So this has been one key pillar of our operational model, which has yielded positive results. The second main pillar has been in the previous years, most of the focus was on the trading with not enough margins. And somehow, we are helping our competitors' growth at our cost. So you can see 2024, only 38% of the volumes were processed by the company and 62% were trading. However, in 2025, after implementation of the new operational model, we have shifted the focus towards our own procurement, which we call landing, and it is 80% of the overall volumes that we have done. And we have carried out a very minimal trading that too in the off season. So this has been a key pillar in utilizing our factories, absorbing the cost of the factories and hence reducing the gross loss as well as the EBITDA loss. One more thing that we have introduced in our new operational model is that we have been doing the processing for third parties since we had certain cash flow constraints and did not have enough liquidity to buy fish, so we found that solution to absorb the cost of the factories, and that was for opening the floor for the third parties. You can see out of the total volumes that we have done, 2,500 metric ton was our own production, whereas 1,763 metric tons was done for the third parties, and these volumes helped us generate OMR 100,000 revenue, which ultimately covered the cost of the factories. Down below there is a graph of the factory capacity utilization. You can see overall, we have utilized only 13% of our factories, which is, again, majorly because of the liquidity constraints. Company has done tremendously on the inventory reduction and this reduction has helped us generate some funds and in times of the liquidity constraints we have been able to liquidate the old stocks, generate some funds and utilize them in our working capital. So you can see a major improvement of 54% in the reduction of the stock in 2025 compared to the previous years. This is -- the bank facilities status, which is the breakup of the bank facilities. Some of them are not currently converted into the term loan. And this is just a quick summary of the impact of the new operational model that we have implemented, the contribution margins from the negative turning to 18% positive. There's a 19% shift there, 67% reduction is in the gross losses, excluding the depreciation impact, optimizing the product mix, where we focus more on the Demersals and the enhanced focus on the internal production instead of doing the trading. So this is a quick summary of the results of 2025, where despite the liquidity constraints, despite a major decline in the revenue we still managed to improve significantly in our EBITDA. So that's a quick summary of the results of 2025. If there are any questions, you are welcome to ask.

Thank you for the management for and the board for achieving and delivering such very good performance due to the challenges and despite all the obstacles that faced by the company.

Any more questions or points of discussion from our esteemed attendees, please.

I want to ask some questions.

Yes, please.

As we approach 2026, what's your forecast for your company's growth and future direction?

In terms of? Aysha, in terms of?

Sorry, in terms of your financial capability now and then you're having this for the example for your investors, what are your plans for the future?

Well, we have set up a very clear pathway plans with all tools, management tools in order that the Board as well as the shareholders to look into the company on its progress. The path is very clear. But unfortunately, we evidently need the new investment to be placed in. And ultimately, we can go forward. If we continue as we are, there is no such future of the company. But yes, thanks to everybody who are very busy with the negotiation at the moment. It looks like the new investment would happen. And unfortunately, share dilution will happen as well. And hopefully, the company would go forward. The company, with its assets potentially, it sits at the forefront for a better operation and the better future. If you look into the Oman landing statistics with nearly 1 million tonnes in average of 700,000 to 800,000 metric tons. What OFC needs to go into the second level of processability is far less than 2% of the national landing. And with its position in the 5 different branches from Salalah all the way to Muscat, I think that is very much achievable.

Thank you for honest reply. Wishing your team the best moving forward for this year, it will not be closed and you will have more and more investors to come.

Well, there's no further questions. I think Mr. Samir, we can wrap up meeting.

Thank you all for being with us this morning. If still there are any points of discussion, please go ahead. Mr. Dawood is available now for answering or discussing any point of discussion or otherwise, we are going to close the meeting. So please, this is another chance for any of you who would like to participate in discussions. So at this point, we thank you very much for being with us. And we will be meeting after the midyear for the midyear -- after publishing the midyear results. So we'll have another opportunity to meet and further discuss the affairs of the company. So thank you, everybody, for being here today this morning, and hope we'll meet again soon. Mr. Dawood, anything to add?

No. We wish to thank everybody who have attended the session as well as the board members, executive management, we came here to fix things. We have reached where we possibly could reach and the company was in need of cash injection early last year. And with all everybody's collaboration, we could pull the company through last year into the first quarter of 2026 with the hope that all negotiations are concluded. And the new Oman Fisheries to gain momentum again in the sector and deliver what it is supposed to deliver to the shareholders. Thank you very much, everybody. Thank you, Mr. Samir and everybody who have attended. Thank for your interest and wish you all the best. Eid Mubarak in advance and have a great holiday ahead.