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

Hello, and welcome to the Qatar Cinema conference call. I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome Roy Thomas to begin the conference. Roy, over to you.

Thanks, Kevin. Hello, everyone. This is Roy Thomas from QNB Financial Services. I want to welcome everyone to Qatar Cinema and Film Distribution Company's Second Quarter and First Half 2024 Financial Results Conference Call. On this call from Qatar Cinema and Film Distribution Company, we have Abdulrahman Najdi, the General Manager; Gamal Eldin Elbanna, Finance Manager; and Walaa El-Sayed, the IR Officer. We will conduct this conference call with management first to being the company's results, followed by Q&A. I will turn the call now over to Gamal Eldin Elbanna. Go ahead, Gamal.

Thank you, sir. Ladies and gentleman, good afternoon. On behalf of Qatar Cinema management, we are pleased to welcome you. Today, we'll present the financial statement for the year 2024, which highlight key performance indicators and financial result. The company depends on multiply (sic) [ ] [ multiple ] revenue sources to ensure operational continuity and sustainability. The company generates revenue from 4 sources. [indiscernible] operation and managing cinemas. The company operates 12 cinemas within the commercial complex and one in the cultural district of Katara. Similarly, revenue account for 66% of the total revenue. In 2024, operation and performance for cinema improved by 58% compared to the same period in 2023, mainly due to the addition of new locations. Second, real estate sector. The company-owned portfolio of unique real estate assets with some lease to Qatar Airways and other 2 different tenants. Rental income constitutes the majority shares accounting for 49% of the total revenue. There has been no significant change in the real estate investment revenue compared to the same period last year. Third, investment portfolio in the stock market. The company maintained a diverse security portfolio on the Qatar Stock Exchange which provide liquidity for the timely investment actions. In 2024, dividend distribution revenue remained at 12% of the total revenue. Changes in the investment portfolio from the previous year are not significant. Fourth, other revenue. Other miscellaneous revenue, not classified as -- account for 4% of the total revenue. [indiscernible] annual financial statement for 2024 show net dollar rate for QAR 2,998,366 compared with QAR 3,159,875 in the same period last year. The net profit for 2024 declined by approximately 5% compared to 2023 mainly due change in revenue for real estate investment and the performance of the investment portfolio. The company has invested around QAR 98 million [indiscernible] 28% for equity and 72% the real estate. Investment activity contributed [ 60% ] of the total revenue. The decline in the investment value is due to the depreciation of the [indiscernible]. The company currently funds its assets through equity and other liabilities. By the end of June 2024, the company's liquidity increased by [indiscernible] 3% compared to December 2023, despite of the damage of cash dividend in March 2024. The annual general meeting held in March 2024, approved the Board of Directors' recommendation to distribute cash dividend for the year 2023. The dividend rate is set out 7% of the nominal value of the shares capital equivalent to Qatari riyal [indiscernible]. The latest news of the company, the company will start new activity before the end of the current year, and to open new revenue channels and diversify income sources to reduce the risk associated with reliance on specific activities. The detail will be disclosed soon about the commencement of the activities. A memorandum of understanding has been signed between Qatar Museum and Qatar Cinema Company with the aim of rehabilitation, the Gulf Cinema building in accordance with the vision and standard of the Qatar Museum. Committees are currently being formed to revert the plan related to the implementation of the project. And we will provide you with any update later. Thank you. And we are ready for questions.

[Operator Instructions]. And your first question comes from the line of Vijay Singh of Fiera Capital.

One question I had was what sort of growth plan do you have in terms of newer screens at the same location or most screens for the same locations as well as potentially new locations, what is the level of penetration and saturation in the market that you see? And considering that we are probably getting a better calendar in terms of new releases, do you think the incremental footfall and revenues could be a lot better given the Hollywood release calendar? Or what is your general view on the outlook?

[indiscernible]. For the extension of our -- now we have the competition because now we have more screen and every time with any new mall, there is a new cinema. And this makes tough competition. To evolve for this [indiscernible] because the income -- this [indiscernible] of our income. Now last year on the end of 2023, we opened our new cinema in [indiscernible] and before that -- 1 year before in Katara. And we -- for this we studied the projects before approve anything. As usually, we take the approval of [indiscernible]. The problem was the cinema is broadly we had the distributor share. Whatever you will get from them it comes, this is the half, it's got for the movie distributors, their share. The other 50%, this is being distributed among the landlord of the place, you have the salary, everything for that. Company depend on the real estate. And also in real estate now recently, our new [indiscernible], I'll disclose later. This is different than cinema. In order to diversify the income and that depends on [indiscernible] because our future [indiscernible] not dependent on this because even in the cinema, there profit will be -- this is not high profit. But other [indiscernible] of the Gulf Cinema building. This will be -- also there is entertainment activity that is -- will increase our real estate by -- in that building. All this is over to support the revenue are not depend on cinema revenue. Because cinema revenue, with this competition will not be more -- get more value.

[Operator Instructions]. There are no further questions at this time. So I'd like to hand back to Roy Thomas.

All right. There are no further questions. We'd like to thank Gamal Eldin Elbanna and Qatar Cinema and Film Distribution Company management for the results update and answering the queries. And we look forward to speaking to you all for the third quarter results.

Thank you.

That does conclude our conference for today. Thank you for participating. You may now all disconnect.