Omani Euro Food Industries S.A.O.G. ($OEFI)

So just to confirm, on and Europe Food Industries, Q&A session as an requirement. Happy to answer any questions. We've been on for now 8 minutes. I think I'll wait for more attendees it remains down centers. Good morning to you. right. If anyone has any questions. So any comments, happy to take them on. With me is Mr. Sultan, who is the CFO of the organization of which canoeing.

The about what sorry? SP1 The products of conversation on. Sorry, I think something wrong with my speaker. I'll just turn it on again -- the question is owned -- the I can hear you. the progress of value events negotiation with banks, yes. Thank you. Sorry. Sorry. Yes. No, still a bit slow with banks. The last update was more than 2 months ago and have been chasing up. The bank has internally now waiting for, I think, a Board to because they have a series of cases or a series of facilities to finally approve the restructuring we have presented them with the plans. We have updated the plans. The restructuring conditions included the requirement of a number of third parties one, evaluated the plant assets to confirm they're in good working order. And obviously, that generates value for the organization and that independent assessor gave the assets generally a 5-year working condition without any major investment. Major investment, I think, in this case, would be more than like $1 million for assets of that type. There was also Obviously, the banks own assessors to look at the plant, they met the people, the management. So they are all satisfied. Verbally, they've confirmed that a number of times. Oman or Bank also has an operational issue of having to report to its parent in Jordan. I think that may be the reason for the day make head cuts in the map, we were possible here to do haircuts or the we use or is going to increase in factory to make some data. We have, in our note written to them that -- well, we didn't specifically ask for a they sort of -- we didn't discuss it, but there was in the restructuring plan, at least a 3-year moratorium, including interest. That they have not responded to yes or no. creating this, obviously, a liability that can impact us any time. very more of handling for the and and more of a customer working Yes. On the customers, yes. Yes. And the customers, a number of things happened. In Oman, we finally see a sign of improved sales because we have invested in a small investment, but in the right way, I think, in that we did an update of the brand and the the way it looks, the way it's packaged or our own brand, models choice. And we've seen a good means more than 20% increase in sales from our local orders from our local distributor. We have also approved for them again, for 1 of the first times, sales and marketing budget so that the new look and feel of the product gets some support. We have been also seen a sign of improved sales in IP, which is 1 of the markets still not affected by the logistics as much as the others because of the Gulf war. Unfortunately, ad sales have all but reduced to a large extent. In Saudi Arabia, we are going to more distributors. Our sales manager has been there a number of times. And that is still a work in progress. But the important thing is that we spent a lot of time vetting both the distributor and our relationship with them for clients very additive actually actually increased its sales this year. Now the percentage increase is at large, but doesn't mean much because the numbers are small. But they are on upside, which is important. If I remember right, the sales have increased more. Sultan, can you verify it was more than 100% increase in order.

In the Q1 2026, In the quarter 1 mind you, quarter 1 still remains weak because of all these delays and issues. And there is obviously a bit of a cash crunch. So we're working that out right now. So the quality achieved and the concerned what forego Okay. In terms of quality issues, we have continued monitoring because we have an independent -- largely independent quality assurance person because that person can refer to the Board directly. We felt that function does not -- is to be treated like an external auditor. So there is an open channel to us. There has -- I don't think any -- I don't remember any major issues like the 1 happened before. There was an incident of SSE that was treated also strictly no facilities, no major injury, but injury anyway. And the other part was obviously the processes where, for example, one of the first quality issues arose because there was a change in one of the ingredients, oil. So as the Board, we made the process such that any any major changes in recipes have to be first tested fully and also to get a certification before it was in place so that we don't face these issues good liters that have you're looking at setting or critical in the basis in that this we will go in line or as Sorry, I'm asking if there have been any cases an -- but on issuing pro the client an issue, yes.

Yes if you remind me, the client at an issue was in Iraq or in Saudi, 1 in Iraq and 1 in Yemen. So both Okay. And to best of my knowledge, we have satisfied the requirements. We have replaced the goods. Is that what we did SP-4 Yes, we have given basically a form of a discount wherein in the subsequent orders, it will be adjusted. And also, we've got an insurance claim for that.

Okay. But is there a net negative effect that's quantifiable that we can attribute to that? It's around 25%, we got 75% of the claim approved. What is the amount, just to be clear. around $12,000 a $10,000 is our loss.

Yes, basically SP1 So that was the result of that quarterly this is actual to and not a -- so it's not really very clear your voice. So the total typical very normal basis or Okay. Yes. is that -- the question is, does that settle the claim? Is there nothing outstanding as well? from them or anyone else. No, no, from anyone else. There is no other ins we like to basically in 2024 there were no quality issues. So to the $12,000 and the discount that we allow for them is the loss that we have. only the 12,000 because the discount part we will be recovering from the insurance company. The 75% claim is accrued. So for both cases, the total loss is $12,000.

Thank you for listing some would on this year.

[Foreign Language]

You addressed the quality issues, logistics and banks totally in the same cohort we would talk about. Obviously, quality, as you said, is what allows us to sell. And you're right, if not us, then our clients before the consumer check it because their names is also responsible for what we present, especially for parents and beer kids. So yes, very aware of that and very much on top of the agenda of the plant. In terms of logistics, we have, I think, almost a month ago, did the whole review with suppliers.

Sultan, can you just comment on the critical ingredients and how much supply -- how much stock we have in months' time at the current prices -- we -- our stocks are.

Okay. I mean there is no major concerns because of the war-related issues, because our major stocks coming from India, and some vitamins and this comes from Europe, New Zealand and -- but those are mostly by air freight. So from this inventory point of view, we don't have -- but in terms of pricing? For the current no major increase in prices, maybe 3%, 4% only raw material prices may increase -- and let me just hold you separately, we will talk -- we just discussed is today morning, we will talk to the agency responsible for consumer protection to just give us a window of price change in case we need it. Obviously, we'll not use it if we don't have a material change. And obviously, we're looking at the market competitors pricing as well. But we are allowing ourselves the freedom if we have to. Okay. The last point on banking. Mr. Ahmed you raised. Yes, haircut, I hear you do. I think, it's a difficult discussion, but they have heard it before, so we can hear it again from us. Yes, I'll take this on with my book. Thank you. or barbs. You have so can you not to look for how long we terminissues -- how long is our stock -- but I don't see, like the major stocks, the bigger part, like law and all these will be -- these are there for 1 month, 1.5 months. the replenishment will be from UAE. So -- and India, so not a concern. But minor stocks are there like vitamins, the minerals and flavors. This comes from Europe and land and so it's that comes by airfreight. So as and when we have orders, we can get it. it's basically, there will be no stoppage for shortage of raw materials. But Suman, I think here is a logical flow. If you allow me, India, Oman is open. Yes, but also UAE gets supplied from India or other places. So can we replace the supplies from UE from India? Is it the same material maybe a different from Ewa also, we have -- but as we understand that UAE stocks we consume very minor portion of the EA requirement. So we will not be a concern to meet our requirement of the stock. Our concern mainly all cash flow issues. -- not on the availability of raw materials lands.

[Foreign Language]

Any other questions or concerns. Okay. Well, if there are no more inquiries or comments or concerns, for you, excuse me, we will then proceed to end this session. Thank you. I'm going to end the meeting. Thank you.