Qatar Industrial Manufacturing Company Q.P.S.C. (QIMD) Earnings Call Transcript & Summary

Good morning, everybody. My name is Aktham Al-Baqali. I'm the Director for Admin and Finance for QIMC. We welcome everybody to our third quarter earnings conference call for QIMC consolidated results. We've got in our presentations here, three items to be shared with you. First, we'll go quickly over the company overview like usual. And then we'll spend a little bit of time for the financial performance and the operational highlights. And at the end, we'll open the floor for Q&A. We've got here at QIMC side, myself, as I have mentioned, Aktham Al-Baqali, the Director for Admin and Finance. And we've got the speaker, Mr. Surya. He is the business analyst at QIMC, senior business analyst. And we've got the Head of Accounts, Mr. Mazen. Mr. Surya, please go ahead.

Good morning, everybody. Welcome to QIMC's Third Quarter of 2021 Earnings Conference Call, the investors' presentation. First, a quick company overview. QIMC was established in 1990 with 20% stake from the government and 80% private equity. We are listed in the Qatar Stock Exchange from inception. As on date, we have a paid-up share at QAR 475.2 million. That's 475.2 million shares of nominal value of QAR 1. Our core competency lies establishing and managing small- and medium-sized manufacturing companies. Our diversified portfolio is across chemicals, petrochemicals, energy services, construction materials, paper and plastic products and food processing. We have 8 subsidiaries and 13 associates as of now. So quick look at our companies: Qatar Acids, which manufactures sulphuric acid; KLJ Organic Qatar, which manufactures chlorinated paraffin wax, caustic soda, hydrochloric acid and calcium chloride; then we have Qatar Paving Stones, which manufactures hollow blocks, interlocks, paving stones and kerb stones; we have Qatar Sand Treatment Plant, which manufactures washed sand and aggregate; then we have Q-Coat, which is Qatar Metals Coating Company, which manufactures epoxy-coated steel bars; National Paper Industries Company, which converts tissue rolls into facial tissues, toilet rolls, kitchen rolls and so on; then we Jahiz, which is a tea packaging company; and then our company which is in commissioning, Gulf Glass Factory, which manufactures glass containers. And we have more detail about this company in the coming presentation slides. Our associates: Qatar Jet Fuel Company, which distributes aviation fuel to the airlines; Qatar Plastic Products Company, which manufactures FFS films and shrinkable films for the chemical industries; Qatar Wooden Products Co., which manufactures wooden pallets; then we have the Gulf Formaldehyde Company, which manufactures urea formaldehyde; Gasal industrial gases, it produces liquid oxygen, nitrogen, hydrogen and argon; and then we have United Chemicals, which manufactures calcium chloride; we also have Amiantit Qatar Pipes, which manufactures glass reinforced pipes, GRP pipes, and its subsidiary, Sarplast Qatar, that is also in a similar industry but with a different technology. Then we have Qatar Clay Bricks Company, which manufactures concrete blocks and hourdi bricks; then we have Qatar Saudi Gypsum Company, which manufactures gypsum powder; Qatar Aluminum Extrusion Company, the first aluminum extrusion company in the country, which produces mill-finished, powder-coated and special purpose aluminum profiles; then we have National Food Company, which is Mahaseel, which processes and packs various food products; and [indiscernible] subsidiary, it is called Qatar-Tunisian Food Company, which manufacturers -- or it bottles and markets olive oil. So that's the broad portfolio we have. A bit more view on our ongoing projects. We have the Gulf Glass Factory. This project will utilize up-to-date modern technologies and equipment to produce high-quality, lightweight glass containers, bottles and jars, which will be consumed in the local market as well as exported to the region. It will be using locally available sand as well as imported sand, soda ash, calcium carbonate and crushed glass, cullets, and then chemicals. And natural gas will be the fuel for this company. It has got a designed capacity of 220 tonnes per day of melted glass, which will be processed into containers of various sizes. Our other project, which is a real estate project, which is the Corniche Park Towers. It's a mixed-use development and 100% owned by QIMC, is rising on the Corniche. This will consist of a 24-floor office tower; a 31-floor residential tower with 1- and 2- and 3-bedroom apartments; a 38-floor hotel and serviced apartments, which will be operated by a 5-star hotel operator; and it also has a 4-floor podium, where there will be retail space that will have and also dining experience and various functional areas for the hotel. Now we'll move to the financial performance of the company in the first 9 months and our financial position as of 30th September 2021. Here's a quick overview. Our total asset stands at QAR 3.1 billion compared to QAR 2.65 billion as of September 2020. That shows an increase of 17.3%. And total current assets out of that is QAR 763.7 million compared to QAR 492.3 million on the same date last year. Noncurrent assets, QAR 2.34 billion compared to QAR 2.16 billion. Total current liability is QAR 384.3 billion compared to QAR 276.25 billion. Our working capital is QAR 379.5 million compared to QAR 216 million as on 30th September. The total equity of the shareholders stands at QAR 1.65 billion compared to QAR 1.59 billion as on 30th September 2020. The gross income for the period January to September 2021 is QAR 361.66 million compared to QAR 277.99 million in the same period last year. That shows an increase of 30%. And if we go straight to net profit, the net profit for the year -- for the 9 months is QAR 96.76 million compared to QAR 59.54 million for the same period last year, that records a 62.5% increase over last year. Earnings per share stands at QAR 0.20 compared to QAR 0.13. And now we have a net book value per share of QAR 3.47 compared to QAR 3.34 as on 30th September 2020. The total equity attributable to noncontrolling interest is QAR 43.87 million compared to QAR 49.55 million as on 30th September 2020. May I request all the participants to mute themselves? We'll carry on. As we mentioned, the total revenues for the period January to September 2021 stands at QAR 361 million compared to QAR 277.99 million for the same period last year. And that shows 34.1% increase. At the same time, our net profit stands at QAR 96.76 million compared to QAR 59.54 million for the same period last year. And that represents 62.5% increase over last year. Now a little more details into the net profit in comparison with the same period last year. Last year was QAR 59.54 million. Our gross profit is up by QAR 6.25 million compared to last year. Share of results from our associates, QAR 6.56 million up. Sales, administration and other G&A expenses is more this year, QAR 3.08 million. In proportion, it is much less compared to the profit and revenue growth we have achieved. Other income, high by QAR 16.92 million. And finance cost is less by QAR 3.15 million and nonoperational gains stands at QAR 7.41 million, thereby giving us a net profit of QAR 96.76 million for the period January to September 2021. Gross profit is up because all -- most of our subsidiaries have performed better compared to last year. Slightly lower profits from Gasal and Amiantit, but they have been more than offset by higher profits from Q-Jet and QPPC compared to last year. This year, we have started getting additional rental income from our logistics, especially the warehouse part. The accommodation part has already been leased out. Earlier from this year or earlier from January onwards, we started getting rent from the warehouse side as well. The total assets is QAR 3.1 billion as on 30th September 2021 compared to QAR 2.65 billion as on 30th September 2020. That shows a 17.3% increase. And total equity is QAR 1.69 billion compared to QAR 1.64 billion as of 30th September. That's like a marginal increase, 3.4%. The increase in assets is due to the logistic warehouse complex coming onboard and also the ongoing Corniche Park Towers, which is coming up very fast. Slight change in total equity due to fair value reserve and higher retained earnings during this period. Our earnings per share is QAR 0.20 a share compared to QAR 0.13 for the first 9 months during last year. And our return on assets is 3.36% compared to 2.34%. So that was an overview of the financial performance and our financial position for the first 9 months. Operational highlights. Our company, KLJ Organic Qatar, exported products to more than 25 countries in Middle East, Africa, Europe, Asia and the Americas. Qatar Aluminum Extrusion Company has exported its products to Europe, Australia, Africa as well as the U.S. besides the Middle East. Amiantit and Sarplast have also exported their products to Oman and Iraq. Qatar Clay Bricks Company will start its commercial production with large-sized kerb stones from November 2021. The final stage of commissioning is currently going on. Now this is the snapshot of the Gulf Glass Factory project. The basic design of the factory has been completed and the civil contract has been selected. The contract was signed on 1st July 2021 and the mobilization [indiscernible]. The construction started on 25th September and is expected to be completed by the third quarter of 2022, that's about a year. The letter of credit for the EPC contractor was opened in [ May 26 ]. Can you please mute yourself, sir? In the Corniche Park Towers project, all the concrete works have been completed. The facade installation works are going on at level 27 for the residential tower, level 22 for office tower. Just some rendered images about the design of different areas in the hotel project. So that's the overview we have about our company, our financial performance over the first 9 months and also operational highlights of what's happening in different companies. That brings us to the end of the presentation. Now the floor is open to question and answer. Mr. Aktham will lead the session.

So gentlemen, you're most welcome to raise any questions you have in your mind. Any comments? The floor is yours. You can unmute yourself and ask your questions, [ Mr. Pandey ], [ Mr. Karthik ]. Are you with us, sir? We'd be happy to answer your queries. [ Mr. Karthik ], are you here with us, [ Mr. Pandey ]? Hello? So gentlemen, shall we understand that there are no comments, no questions? At least then we need to get someone interacting with us. You are most welcome to raise any comments, questions. We are ready and happy to address any of your comments. I guess, gentlemen, this leave us to call this session for closure by me. Shall I? Thank you, gentlemen. We'll see you for the end of 2021 conference call.