Qatar Fuel Company Q.P.S.C. ("WOQOD") (QFLS.QA) Q3 FY2025 Earnings Call Transcript & Summary

Hello, everyone, and welcome to WOQOD Conference Call. Please note that this call is being recorded. I'd now like to hand the call over to Phibion. You may now go ahead, please.

Thank you, Eli. Good afternoon to you all, and thank you for joining us for the third quarter and 9 months of 2025 Earnings Conference Call for WOQOD. On today's call, we have three members of the management team. We have the CFO, Pradeep Kumar; and we have Abdulrahman Al-Hammadi, the Finance Manager; and Ahmad Said K. Al-Mansoori, the IR Officer. And as usual, they are first going to present the results to us, and we'll open the line for the Q&A session. Now let me turn over the call to Ahmad to begin the call. Over to you, sir.

Thank you, Phibion. Good day to all the participants, and we hope everyone is keeping safe and healthy. We welcome you all to WOQOD's Third Quarter and September 2025 Results Conference Call and appreciate your participation as WOQOD is committed to continuously enhance its Investor Relations initiatives. This is to strengthen our communication and improve transparency with all members of the global investment community. The presentation of this call will be available on the Investor Relations section of our website. Any statement that refers to expectations, projections, guidance, or any other characterizations of future events, including financial projections or future market conditions, is a forward-looking statement based on the assumptions today. Actual results may differ materially from those expressed in these forward-looking statements. The company cannot disclose any commercially sensitive information due to the confidentiality agreement signed with suppliers. Please refer to Slide #2 for the full version of this disclaimer statement. All figures expressed in this call are on Qatar riyal, and the conversion for the same to U.S. dollar is QAR 3.64 to USD 1. Now I would like to hand over the call to our Finance Manager, Mr. Abdulrahman Al-Hammadi, to provide a brief overview of WOQOD and update on the key operational activities.

Thank you, Ahmad. Good morning, everybody. The key vision of WOQOD is to be leading the petroleum product distribution and related services marketing company in the region. I'm on Slide 4 now, which shows the overview of WOQOD Group. WOQOD started operation in 2002 with exclusive rights for the storage and distribution of petroleum products in the State of Qatar. Operations started with 2 petrol stations in 2003 and has grown to 127 stations at the end of September 2025. The chart of the right shows WOQOD petrol station network. WOQOD also owns and operates 13 Fahes centers for inspection of vehicles across the State of Qatar. I'm on Slide #5 now, which shows the key operations of WOQOD Group. The key operation of WOQOD Group are diesel and gasoline fuel distribution and sales, jet fuel distribution and sales, shore-to-ship and ship-to-ship bunkering, LPG distribution and sales, natural gas distribution and sales, fuel bunkering, bitumen operations, C-Store and auto care activities, vehicle inspection services, and office leasing. Turning to Slide 7 now, which shows the diesel and gasoline fuel sales volume trend analysis. As mentioned before, the core activity of WOQOD is fuel distribution and sales in the State of Qatar. Total fuel sales remained stable during YTD September 2025 as compared to YTD September 2024, driven by market demand. Diesel sales volume decreased by 2% during YTD September 2025 versus the same period last year, driven by macro economic factors. Combined gasoline sales volume increased by 3% during YTD September 2025 as compared to the same period last year. On a quarter-on-quarter basis, sales volume for third quarter 2025 diesel sales volume increased by 11% and gasoline sales remained stable. Average fuel price for diesel and gasoline decreased by 2% and 1% during YTD September 2025 as compared to the same period last year. Turning to Slide 8, which shows the jet fuel sales volume comparison. Jet fuel sales decreased by 1% YTD September 2025 as compared to the same period last year, driven by market demand. On a quarter-on-quarter basis, jet fuel sales volume for third quarter 2025 increased by 10%, driven by market demand. Jet fuel price decreased by 14% during YTD September 2025 as compared to the same period last year, driven by change in crude oil price. Combined sales volume of all petroleum products remained stable during YTD September 2025 as compared to the same period last year. Turning to Slide 9, which show the quarterly trend of retail fuel sales volume trend. Overall, retail fuel volume of WOQOD petrol station increased by 2% during YTD September 2025 against the same period last year, driven by increased market demand. On a quarter-on-quarter basis, retail diesel sales volume increased by 7% and gasoline sales remained stable until the quarter 2025. The market share of WOQOD in petroleum retail market in the State of Qatar reached about 85% during YTD September. Nonfuel retail sales decreased by 9% during YTD September 2025, mainly on account of decrease in Sidra and APC sales. Now I would like to hand over the call to our CFO, Mr. Pradeep Kumar, to discuss the key financial results.

Thanks, Abdulrahman, for all the volume updates. Good day, everyone. I would like to discuss the consolidated financial results of WOQOD for the third quarter 2025 and 9-month period ended 30th September '25. Slide 11 shows the revenue trend of WOQOD. Revenue from petroleum products account for nearly 97% of the total revenue. WOQOD achieved total revenue of QAR 19.2 billion for YTD September 2025 as compared to QAR 21.3 billion during the same period last year, showing a decrease of 10 percentage, mainly driven by decrease in prices. On a quarter-on-quarter comparison basis, the total revenue increased by 10 percentage during third quarter '25, mainly driven by increase in sales volume by 7 percentage and increase in average sales price by 4 percentage. Turning to Slide 12, which shows the net income trend analysis. WOQOD has made a net income of QAR 752 million during YTD September '25, lower by 2.6 percentage as compared to the same period last year, mainly due to decrease in nonfuel income and other income. WOQOD has made a net income of QAR 291 million for the third quarter '25 as compared to QAR 289 million during the same period in '24, representing an increase of approximately 1 percentage. On a quarter-on-quarter basis, the net income for the third quarter '25 increased by QAR 61 million, which represents 27% of increase, driven by increase in volume and trading price stock variances. The detailed analysis of net income variance for YTD September is given in the next slide. I'm on Slide 13, which shows the key variance analysis of net income for 9 months period ended September 2025 as compared to same period last year. The decrease in net income of QAR 19 million is due to following factors: Net operating margin remained almost flat with a slight increase driven by net change in operating costs. Trading stock price variance is mainly driven by impact of price movements on jet fuel inventories. B2B segment margin increased mainly due to higher transportation income during YTD September '25 as compared to same period last year. Nonfuel income decreased mainly driven by prevailing market conditions. Other income lower, mainly driven by lower dividends and interest income driven by prevailing market conditions and the interest rate reductions. WOQOD's fundamentals continue to remain robust, and WOQOD is committed to meet all its strategic goals while placing safety as a top priority. WOQOD has a strong leadership committed towards delivering the results to its shareholders. With this, we are ready for a Q&A session. Thank you.

[Operator Instructions] Your first question comes from the line of Rian Durham of Ashmore.

Can I just check whether you can hear me? Can you hear me?

Loud and clear.

Perfect. I've got a couple of questions here. First of all, can you tell me whether you guys are seeing any signs of life or signs of improvement forward-looking in terms of the diesel business? And for the jet fuel side of things, are you seeing any changes to the demand drivers for that?

Well, on the diesel retail sales side, we start seeing some signs of improvement. On the B2B segment, we get to see the improvement, and we expect that's going to improve in coming quarters. On the jet fuel, it's driven by all the demand. And I think it is stabilizing. That's what I feel.

Eli, do we still have any questions on the line?

Mr. Durham, your line is now open sir.

I have another question. Would you guys -- could you guys give us an update on the sort of the new strategy for the nonfuel and the retail business, please, if that's okay?

Yes. This is one area we are keenly working on it to improve the revenues and optimize the income in wherever possible in all verticals. So we are working on it. The market is challenging, but we are working on that.

Perfect. And just finally, how -- could you just share a little bit about how sort of end market demand is moving volumes for you guys? Can you share a little bit of color on that, please?

Yes, you can see in the first 9 months, the volume is total volume, including everything is almost same as last year. So we expect it will improve slightly in coming quarters.

Right now, we don't have any pending questions. I'd now like to hand the call back over to Phibion for final remarks.

Thank you, Eli. If we don't have more questions on the line, let's bring the call to an end. Thank you all for joining us for today's call. And should you feel like you want to ask other questions, you can reach out to QNBFS or to the management team of WOQOD directly. Please do join us for the fourth quarter earnings call. Enjoy the rest of your day.

[Audio Gap] for attending today's call. You may now disconnect. Goodbye.