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 the call over to Roy Thomas. Please go ahead.

Thanks, Ellie. Hello, everyone. This is Roy Thomas from QNB Financial Services. I want to welcome everyone to Qatar Cinema and Film Distribution Company's First Quarter 2025 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 review the company's results, followed by Q&A. I will turn the call now over to Gamal Eldin Elbanna. Go ahead, Gamal.

Thank you, Mr. Thomas. Good afternoon, everyone. Thank you for attending today's presentation of Qatar Cinema Company's Q1 2025 financial results. We will provide a concise overview of our financial performance, key operational highlights and any notable trends impacting the business. The company relies on multiple revenue streams as part of management's commitment to ensuring financial sustainability and reducing dependence on the specific activities. The company achieved total revenue QAR 5,776,690 for the period ended March 31, 2025, reflecting a decrease of 15% compared to the same period in 2024. The fall in revenue happened because of the drop in dividend income at some companies IQ interim dividend during 2024. Additionally, there was a decrease in real estate income and lower cinema revenue in March 2025, which coincided with the holy month of Ramadan revenue of Ramadan. Revenue is generated from the following 4 main sources. That is, operation and management of cinemas. The company operates 4 cinemas, 3 located in high-traffic commercial malls and 1 within [indiscernible] cinema in Katara Cultural Village. Cinema operation contribute 25% of the company total revenue. Cinema revenue amounted to QAR 1,463,494, reflecting a decrease of 16%. This decline is mainly due to reduced audience turnout in March, which coincided with the holy month of Ramadan. Second, real estate sector. The company owns a portfolio of prime real estate assets with some leased to upper railways and other rented to various entities. Rental income constitutes the largest portion of the revenue, representing 53% of the total earnings. However, the rental income declined by 8% compared to the same period last year due to the weak performance of the real estate market during this period. Investment portfolio in the stock market. The company maintained a diversified and liquid security portfolio listed on the Qatar Stock Exchange, ensuring financial flexibility and enabling the company to capitalize on timely investment opportunity when needed. Revenue from this portfolio totaled QAR 1,012,307, accounting for 18% of the total income, a decrease of 25%. This decline is mainly due to the reduced dividend income as the company distributed interim dividend during 2024. Fourth, other revenue. Additional revenue still beyond the 3 primary sources contributed 4% of the total income generated from various miscellaneous sources. Net profit for the fiscal period ended March 31, 2025, amounted to QAR 2,033,688 million compared to QAR 2,348,648 for the same period in the previous year, a decline of 13%. This decrease is due to the drop in the revenue derived by the 3 factors mentioned earlier. Despite the decline recorded in the first quarter, the company's financial fundamentals remains strong and financial performance is expected to improve in the coming period. The company total investment amounts to approximately QAR 100 million divided between 30% for equity investment and 70% from the real estate investment. Investment activity accounted for 71% of the total revenues. The company does not depend much on loan to pay for its assets and the company currently finances its assets through liquidity and other liabilities. The company's liquidity declined by approximately QAR 1.6 million as of the end of March 2025, representing 6% decrease compared to December 2024. The cash balance stood around of QAR 26.4 million. This decrease because of the dividend distribution for the year 2024 financial year. Despite this, the company continues to maintain strong financial position and long-term operational sustainability. Future of the company. As a part of the company's plan to renovate Gulf Cinema building, a Memorandum of Understanding cooperation agreement was signed with Qatar Museums to investigate possible way of working together on the project. So far, the renovation plan are still being reviewed, especially because there may be a partial land takeover by the authorized working on the metro project. This was officially announced on August 3, 2019. The company's management is in ongoing discussion with the parties concerned to find solution that supports the project while protecting the right of the shareholders. Due to the change in the market and growing competition in the cinema sector, the company has seen a drop in the cinema revenue. This is mostly because many new cinema have opened in shopping malls, which has affected our market share and income. To keep the company financially strong and reducing reliance on the basic activities, management is now looking into new investment opportunity to grow and diversify the company's income sources. Thank you for joining us today on this conference call, and we are ready for questions.

[Operator Instructions] We don't have any pending questions. I'd now like to hand back over to Roy for final remarks.

If there are no questions, we would like to thank Qatar Cinema and Film Distribution Company's management team for the results update, and we look forward to speaking to you all for the second quarter 2025 financial results conference call. Thank you.

Thank you.

Thank you for attending today's call. You may now disconnect. Goodbye.