Qatar Cinema and Film Distribution Co. (Q.P.S.C) (QCFS) Earnings Call Transcript & Summary

Hello, everyone, and welcome to Qatar Cinema Conference Call. Please note that this call is being recorded. I'd now like to hand over to our first moderator for today, Fabian. Fabian, you may now begin, please.

Thank you, Elie. Good afternoon to you all, and welcome to Qatar Cinema and Film Distribution Company's First Quarter 2024 Earnings Conference Call. My name is Fabian Marquez, Senior Analyst with QNB Financial Services. On today's call, we have from Qatar Cinemas management team, Abdulrahman Najdi; with the General Manager, Gamal Elbanna, who is the Finance Manager; and Walaa also head of the IR office. As usual, they'll go over the performance and we have a Q&A session afterwards. I will now turn over the call to Gamal to begin the call. Over to you, sir. Go ahead.

Ladies and gentlemen, good afternoon. We are honor to welcome you on behalf of Qatar Cinema management. Today, we are presenting the first quarter report of this year, highlighting key performance indicators and financial results. To ensure [ our reach ] and continue our sustainability, our company diversifies its revenue streams. We derived income from 4 main sources. That is, operating and managing cinemas, the company runs for cinemas, we see located in commercial complex and one in the cultural district of Katara, Similarly, revenue contributed 26% to the total revenues. In 2024, the company saw a 57% increase in operation and performance for cinema compared to the same period in 2023. This is attributed to addition of numerous cinemas. Second, real estate sector, the company-owned portfolio of unique real estate assets with some lease to Qatar Airways and other 2 different parties. Rental income constitutes the majority share accounting for 49% of total revenues. There has been more significant gains in the real estate investment revenue compared to the same periods last year. Next, investment portfolio in the stock market. The company maintained a very secretive portfolio in the Qatar Stock Exchange including liquidity for swift investment action. In 2024, dividend distribution revenue constitute 20% of the total revenue. Deterioration in the investment portfolio compared to the previous year are negligible. [ First ] other revenue. Other miscellaneous revenue, not including the above major categories account for 5% of the total revenue. The net profit for the quarter ended March 31, 2024 was QAR 2,348,648 compared with QAR 1,994,774 in the same period last year. This is the reason an approximately 18% increase in net profit for Q1 2024 compared to Q1 2023, derived by higher cinema revenue. The company has invested around QAR 99 million [indiscernible] 27% for equity and 73% for the real estate. Investment activities contributed 69% to the total revenue. The decline in the investment value is due to depreciation and the falling stock prices. The company currently financed its assets through equity and other liabilities. By the end of March 2024, the company liquidity dropped by roughly QAR 1.7 million, marking an 80% decline from December 2023. These reduction in cash reserves is due to the distribution of dividend. The Annual General Meeting approved the Board of Directors' recommendation to distribute a dividend for the year 2023. The dividend rate is set at 7% of the nominal value of the share capital equivalent to QAR 7 per share. [ Crucial remarks ] of the company. Efforts are underway to introduce the new activity distinct from current one to explore fresh [indiscernible] avenues, diversifying income source and mitigate risk associated with the dependence on its basic activities. Further detail will be revealed following the acquisition of required approval. We are currently in communication with Qatar Museum regarding the proposal to rehabilitate the Gulf Cinema building, as suggested by our Board of Directors. The proposal aim to incorporate real estate investment in the entertainment sector, while maintaining the building exterior. This aligns with Qatar Museum's vision to preserve the building due to its historical, culture and ancestral significance as well as its classification with Qatar's history. We will provide further update on these matters on any development. Thank you, and we are ready for questions.

We are now opening the floor for question-and-answer session. [Operator Instructions] It seems like we don't have any pending questions as of the moment. I'd now like to hand back over to the moderator for the final remarks.

Thank you, Elie. If we don't have any questions, I think we can wrap up the call for today. Thank you all for joining us. We look forward to having you again for the second quarter earnings conference call. If you've got questions, please feel free to reach out to the management team or to QNB Financial Services. Thank you, and have a good day.

Thank you so much for attending today's call. We hope you have a wonderful day. Stay safe, and you may now disconnect this session.