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

Good afternoon and welcome to the Qatar General Insurance & Reinsurance. Please be advised that this call is being recorded. [Operator Instructions] Thank you. I would now like to hand the call over to our moderator, Shahan. Please go ahead.

Thank you, Kelvin. And hello, everyone. I would welcome you to QGIRCO's 1Q 2025 Financial Results Conference Call. So on this call, from management, we have Khalid Alaswad, group CFO; and Ibrahim Abdallah, assistant manager, treasury and investments, and IR officer. So as usual, we will conduct this call with, first, management reviewing the company's results; followed by a Q&A session. I will turn the call over now to Ibrahim. Please go ahead.

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 first quarter that ended on 31st of March 2025. I'm Ibrahim Abdallah, QGIRCO's investor relations Officer. And it is worth starting our investors call with the disclaimer thereafter. We will provide you with a summary of our operational and financial results. I'll 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 results -- resulting from using forward-looking statements throughout this call. I'm delighted to give the floor to my colleague, Mr. Omar Alsabbah, who will discuss the company financial results and the operational updates.

Thank you, Ibrahim. We are pleased to share with you that Qatar General Insurance & Reinsurance Company results for the first quarter of 2025 showed a strong financial performance compared to the same period in 2024. Net profit for the quarter reached QAR 49.3 million, a substantial increase from QAR 17.5 million in Q1 2024, reflecting the continued recovery of our operations and the positive impact of the ongoing efforts to enhance efficiency across the group. Insurance service results stood at QAR 20.5 million compared to QAR 26.9 million in Q1 2024. This decline is attributed to the strategic review of our portfolio, focusing on more profitable businesses which are expected to drive long-term sustainable growth. On the investment side, performance was notably stronger, with results increasing to QAR 49.4 million from QAR 29.2 million in Q1 2024. This growth was primarily driven by higher rental income following the successful leasing of the General Tower during the last quarter for 2024. We continued to maintain a disciplined approach to cost management, with other operating and admin expenses declining to QAR 38 million from QAR 50.5 million in Q1 2024. Finance costs also decreased by QAR 4.7 million, representing a 24% reduction over the same period last year. This was largely due to the ongoing deleveraging of Al Rayan bank loan and the impact of lower interest rates compared to the same period last year. As a result, shareholders' net profit reached QAR 49.6 million, with earnings per share of QAR 0.057 for the same and for the year -- for the period ended 31st March 2025. Qatar General Insurance & Reinsurance continues to maintain a strong financial position, with total assets exceeding QAR 5.6 billion and shareholders' equity standing above QAR 3.4 billion. With that, I will now hand over to Mr. Ibrahim to take you through the outlook.

Thank you, Omar. The World Bank forecasts Qatar economy to grow by 2.4% in 2025 and at an annual rate of 5.4% going forward. This growth is anticipated to be driven by the expansion of gas production and new manufacturing projects. Firstly, let's discuss QGIRCO's insurance business. QGIRCO's management anticipates continued growth in the insurance sector driven by Qatar's economic diversification efforts, including infrastructure development, digital transformation and the expansion of the oil and gas industry. QGIRCO is likely to expand its products offerings and tailored services to meet the needs of a diversifying economy, including innovative insurance solutions in emerging markets and sectors such as cyber insurance and renewable energy. Secondly, regarding QGIRCO's investment and real estate business, we expect a substantial increase in income from our real estate business for the year 2025 as we achieve almost 100% occupancy in our properties through the signing of the rental agreement of General Tower with a government entity. Regarding the investment outlook, as of 2025, the Qatar Stock Exchange, QSE, has shown positive performance reflecting the overall resilience of the Qatari economy. QSE index has experienced slight underperformance year-to-date through the tariffs market turmoil, which was supported by strong corporate earnings, particularly in sectors like finance, real estate and energy. Analysts remain optimistic about the QSE's future performance, expecting continued growth as the economy diversifies and infrastructure projects progress and the expected interest rate cuts. Finally, highlighting the effects on QGIRCO's income statement and balance sheet. On an income statement level, financing costs are expected to decrease substantially due to the upcoming rate cuts and the deleveraging of Al Rayan bank loan. The company continues to pursue its deleveraging plan through selling its nonincome-generating assets. This should improve the overall liquidity and debt ratios of the company. With that being said, it is worth to note that the outlook has been fully presented. And I would like to note that this call and the fact sheet will be available on the investor relations section of our website, www.qgirco.com.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 QGIRCO team, thank you very much. We wish you a great day ahead. If you have any question, please go ahead now.

[Operator Instructions] Your first question comes from the line of Anastasios Dalgiannakis of Al Faisal Investments.

My first questions, if I may, my first question. So the General Tower, that now has been let to government entity. Could you tell us, remind us, please, how much of the QAR 1.6 billion of completed properties in the -- on the books is represented by the General Tower? What percent of that value is General Tower?

Thank you for your question. I'll hand out to Mr. Khalid Alaswad to answer your question...

[indiscernible]. We have multiple properties [ and investments of these ] [indiscernible], this one, General Tower's. We can't give the value of the tower on public. You can send us an e-mail [indiscernible] -- I'm sorry. Well, you know this one. We cannot [ publicly. That's one, publicly ] [indiscernible] regarding this confidential -- this one. Because it's in the market, this one. We cannot give on just individually any property.

Okay, but it's -- we should assume it's the bulk of the QAR 1.6 billion, right, of the QAR 1.6 billion...

Yes, yes, yes, for sure...

Okay. And my next question, if I may, is the insurance business. Now the insurance saw a significant deterioration on a year-on-year basis. Could you elaborate a little bit on the causes? And what is the outlook for the business, the insurance business, for this year?

My friend, we just -- our Board succeed to sign with our new group CEO from insurance business, from insurance side, from outside the country. And we started last year, last quarter last year, just screening our portfolio, okay? So we now -- when we expected -- we expect now our portfolio to grow with [ a more profitable ] business.

Okay. And one last, if I may, now on the deleverage. Now clearly [ post for the ] deleverage of the Masraf Al Rayan loan is that you had proceeds from the sale of investment properties of QAR 86 million in the quarter.

Yes.

Now I just want to establish because obviously the rental income is helpful, obviously, but still, excluding the cash inflow from the sale of investment property, the deleverage, the delever would have been at a lower pace. So [ looking ahead ], assuming there will be no more sales of investment properties, and correct me if this assumption is wrong, what pace of deleverage of the Masraf Al Rayan loan do you expect for the year?

My friend, first of all, our rent, we used just to settle QIB loan, not Al Rayan loan, okay? And for deleveraging, we are just working to settle the whole loan by end of this year, okay? Hopefully, we can succeed. Now we have -- okay, we sold [ a ] land by QAR 86 million, but you know our cash flow. So actually if you look at cash and -- cash balances is -- increased, okay, heavily. Now we plan also to sell more land, okay, non-generating income properties, to settle the part or portion of loan, Al Rayan loan.

Okay, just to be clear: The cash balances decreased, correct, in...

No, no, no, not decreased, increased, increased heavily.

From the year-on-year basis, right?

Yes, yes -- no. From the 1st of January, until now, increased heavily.

Okay, but I'm saying on year-on-year. You had QAR 200 million last year. Now you have QAR 214 million. So now for the Masraf Al Rayan you mentioned you will be selling lands...

Yes, yes, yes. We are selling land, yes. We have another -- lands. And in the market now, we are still selling land.

Okay. And do you expect to achieve the similar valuation to the land balance of QAR 729 million...

So far, we are selling with profit, so far, a minimal profit...

So far, but it will be vacant lands going forward you mentioned.

Yes. We will -- we just -- we believe that we can sell in the same book value or higher than book value.

There are no further questions at this time. With that, I will now turn the call back over to Shahan for final closing remarks.

Okay, if there are no more questions, we can wrap up this call. I would like to thank QGIRCO's management for giving us an update on the first quarter '25 results. And we will pick this up again in the second quarter. Thank you.

Thank you.

Thank you.

[indiscernible] thank you.