Qatar General Insurance & Reinsurance Company Q.P.S.C. (QGRI) Earnings Call Transcript & Summary

Hello, everyone, and welcome to the Qatar General Insurance conference call. Please note that this call is being recorded. I'd now like to hand over to our moderator for today, Roy Thomas. Please go ahead.

Thanks, Elise. Hello, everyone. This is Roy Thomas from QNB Financial Services. I want to welcome everyone to Qatar General Insurance & Reinsurance Company's Second Quarter and First Half 2024 Financial Results Conference Call. On this call, from Qatar General Insurance & Reinsurance Company, we have Khalid Alaswad, the Group Chief Financial Officer; and Zaid Anani, the Treasury and Bank's Relationship Manager. We will conduct this conference call with management first to bring the company's results, followed by Q&A. I will turn the call now over to Zaid Anani. Go ahead, Zaid.

Thank you, Roy. Good afternoon, ladies and gentlemen. Welcome to the earnings conference call of Qatar General Insurance & Reinsurance Company, which will be referred to by QGIRCO or the company going further for the second quarter of the financial year 2024. I am Zaid Anani, QGIRCO's Investor Relations Officer. It is worth starting our investors call with a disclaimer. Thereafter, we will provide you with a summary of our operational and financial results. I will now read out the disclaimer to this conference call. This call may contain, constitute or imply information or forward-looking statements regarding the operational or financial performance and future of QGIRCO or any of its subsidiaries. Such statements are based on the current expectations and assumptions of QGIRCO's management to their best knowledge and diligent assessment. As such, QGIRCO, its Directors and its officers shall not be liable for any costs or losses resulting from using forward-looking statements throughout this call. I'm delighted to give the floor to my colleague, Mr. Greggy Bueno, who will discuss the company's financial results and the operational updates.

Thank you, Zaid. As a result of continuous commitment to optimizing the group's performance, our insurance and investment operations during the first half 2024 resulted in a net profit of QAR 48.3 million. The insurance service results reached QAR 49.2 million compared to QAR 46.1 million for the same period last year. As for our investment operations, our investment income increased this year to QAR 70.3 million compared to QAR 36.3 million for the same period last year. The main reason behind this improvement is the earnings from foreign investments. QGIRCO remains in a strong financial position with total assets about QAR 5.8 billion and total shareholders' equity exceeding QAR 3.4 billion. My colleague, Mr. Omar Alsabbah, will discuss the financial results in further details before handing over to Mr. Zaid Anani to take you through the investment outlook.

To begin, I will provide a high-level overview of our financial results before we get into the details. For the first half of 2024, Qatar General Insurance & Reinsurance total Insurance revenue reached QAR 439.1 million, up from QAR 394.8 million during the same period last year. Our management team has taken proactive measures to enhance the profitability of our Insurance segment through effective client selection and optimizing our reinsurance mix. The insurance services has reached QAR 49.2 million compared to QAR 46.1 million for the same period last year. Our Investment results jumped to QAR 80.2 million this year compared to QAR 41.5 million during the same period of 2023. This growth is largely attributed to income from both local and foreign investments, alongside improvements in our portfolio/asset value. The other operating and administrative expenses reduced from QAR 52.7 million in the previous period to QAR 47.8 million for the same period ended 30 June 2024. The above resulted in shareholders' net profit of QAR 48.7 million, an increase from QAR 35.1 million during the same period last year. The earnings per share stands at QAR 0.056. Now I will hand over to Mr. Zaid to take you through the outlook.

Thank you, Omar. Qatar's economy had a strong start in 2024, anchored by its hydrocarbon sector that was already accelerating towards diversification. In 2023, Qatar achieved a third consecutive fiscal surplus of QAR 43.1 billion, accounting for over 5% of its GDP, which is the highest in the GCC, Forecast for this year predicts another surplus based on the conservative off-price assumption of $60 per barrel. Let's discuss QGIRCO's Insurance business. QGIRCO's Insurance business continues to find a strong footing through the country's infrastructure growth, digital, transportation, oil and gas protection and, most importantly, the rollout of the mandatory health insurance plan for expatriates and their families. Secondly, regarding QGIRCO's Investment and Real Estate business, it is expected that income from the Real Estate business to improve towards the end of 2024 as the company is now in the final stages of refurbishing General Tower for a new tenant. Regarding the investment outlook, the Qatar stock market remains lagging in its regional peers. However, increased local trading activity and the recently adopted semiannual dividend policy are expected to lift the market going forward. Furthermore, the anticipated rate cuts in September should have a positive impact on the overall economy through reducing borrowing costs. Additionally, the company's direct equity investment at Algeria continued to deliver solid performance, in line with expectations. Finally, highlighting the effects on QGIRCO's income statement and balance sheet. On an income statement level, financing costs are expected to remain stable with higher probability of decreasing this year due to the anticipated rate cuts in September. The company continues to pursue its deleveraging plans through selling its nonincome-generating assets. This should improve the overall liquidity and debt ratios for the company. Income from building our General Tower towards the end of the year should improve the overall profitability of the company. With this being said, it's worth to note the outlook has been fully presented. And I would like to note that this call and fact sheet will be available in the Investor Relations section for our website, www.qgirco.com, by the end of tomorrow. Kindly feel free to reach out to us through our contacts in the Investor Relations section. Ladies and gentlemen, on behalf of the whole of QGIRCO team, thank you very much. We wish you a great day ahead. If you have any questions, please go ahead now.

[Operator Instructions] We have our first question from Mark Krombas from TFI.

You mentioned that you were planning to sell down your nonincome-generating assets. Could you please provide a bit more detail about the size of those assets, what's the nature of those assets, please?

Mark, Mohammad Kanaan speaking, Head of Investments. So the nonincome-generating assets predominantly are a land bank. So we have plots in Lusail, in Salwa and Wakrah. And we are gradually selling those down and using the proceeds to deleverage one of our loans. I hope that answers your question.

Yes. I mean, do you have the approximate value?

Yes, yes, yes...

Or just a ballpark. And will that be used to pay down debt directly?

Okay. So we might not sell all of them, but we are definitely going to sell the vicinity of around QAR 500 million.

[Operator Instructions] It looks like we don't have any incoming questions. I'd now like to hand back over to Roy Thomas, the moderator, for remarks.

All right. If there are no further questions, we would like to thank Qatar General Insurance & Reinsurance Company's management for the results update and answering the query, and we look forward to speaking to you all for the third quarter 2024 results conference call. Thank you.

Thank you, Roy.

Thank you for attending today's call. You may have a wonderful day. Stay safe.