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

Good morning, everybody. Welcome, everybody to QIMC's Conference Call for Q1 Consolidated Results 2023. I assume that everyone is connected and I shall start right now. My name is Aktham Baqali, I'm the Director of Administration and Finance. And in front of me is Surya [ Kalia ], is the senior analyst -- Business Analyst at the QIMC and I have got in my left hand, Mazen Abu Safa, Head of Accounts. Our agenda for today consists of 4 subjects. First is a quick overview over the company and second, we've got the financial performance, third, we've got the operational highlights and at the end is Q&A platform. So Surya, please go ahead with the first topic of the agenda.

Good morning, everybody. Ramadan Kareem. Hope you are able to see the presentation on the screen. As Mr. Aktham said, we have 4 items. Here we are showing company overview, financial, portfolio operational highlights and finally, we'll open the platform for Q&A. First, we'll have a quick look at the company overview. QIMC was established in 1990 with 20% participation from government and 80% private equity. We have been listed on the Qatar Stock Exchange from starting. As of today, we have paid up share capital of QAR475.2 million, which is 475.2 million shares of nominal value of QAR1. We have core competency in establishing and managing small and medium-sized manufacturing companies. We have a very diversified portfolio across multiple sectors like chemicals, petrochemicals, energy services, construction materials, paper and plastic and food processing. As on date, we have 8 and 12 associates. We'll have a quick look at our subsidiaries. Qatar Acids, which manufactures sulfuric acid. We have KLJ Organic Qatar, which manufactures chlorinated paraffin wax, caustic soda prills, hydrochloric acid and hypo. We have Qatar Paving Stones, which manufactures hollow blocks, interlocks, paving stone and kerb stone. We have Qatar Sand Treatment Plant, which produces washed sand and aggregate. We have Qatar Metals Coating Company, which produces epoxy-coated steel bars. We have National Paper Industries company, which produces special tissues, toilet rolls, kitchen rolls, and other sanitary products. Then you have Jahiz, which is a teak packaging company, then we have Gulf Glass Factory, which is under commissioning, which will manufacture glass containers. We'll have more information on this as we progress. Some of our associates, we have Qatar Jet Fuel Company, which distributes aviation fuel. We have Qatar Plastic Products Company, which produces FFS film, shrinkable film and wooden pallets. We have Qatar Aluminum Extrusion Company, which produces mill finished powder coated and various special purpose aluminum profiles. Then we have Gulf Formaldehyde Company, which produces urea formaldehyde. We have Gasal, which produces industrial gas. United Chemicals, which produces calcium chloride. Then you have Amiantit Qatar Pipes Company, which produce glass reinforced pipes. It has subsidiary called [indiscernible], which produces glass reinforced pipes using a different technology for a different application. Then you have Qatar Clay Bricks Company, which produces concrete blocks, kerb stones and [ body ] bricks. Then you have Qatar Saudi Gypsum Company, which produce gypsum powder. Mahaseel, which processes in fact, various kinds of food products, especially dates. Then you have Qatar-Tunisian Oil Marketing Company, which produces -- which markets or bottles and markets olive oil. So, that's a quick overview of our subsidiary and associates. Now, regarding our ongoing projects. Gulf Glass Factory. This factory will utilize locally available sand and natural gas and produce high-quality lightweight glass catered as various color, sizes and shapes for different applications, especially for storage of food. This project will be located in New Industrial Area, and it will have modern infrastructure facilities. The design capacity of the plant will be 200 tonnes per day of glass containers, nearly 1 million bottles and jars per day. This is the first of its kind environment-friendly factory in Qatar and it will serve the local and regional market as well as worldwide food industry. Then we have the other ongoing projects, which is a Corniche Park Towers. It's a mixed-use project, having 3 towers, hotel, office and residential apartments. The hotel tower has got 38 floors. The residential tower will have 29 floors and the office tower will have 24 floors. And it will also have a 4 podium level, which will have signature retail areas. Now, we go to our financial performance during the first quarter of 2023. This is a quick snapshot of the performance. Our total assets as on 31st March, 2023 stands at QAR3,603.7 million compared to QAR3,354.82 million as on 31st March 2022, which indicates 7.4% increase. Our current assets stand at QAR616.02 million, non-current assets, QAR2,987.68 million. Our total current liability is QAR385.22 million. That gives us a working capital of QAR230.8 million. The total equity of shareholders stands at QAR1,795.6 million. The gross income of the company during the first quarter was QAR134.94 million and our profit before tax and provisions QAR48.2 million. This included other income of QAR16.83 million. Our earnings per share is QAR0.101 per share. Net book value stands at QAR3.78 and the equity attributable to non-controlling interest is QAR51.54 million out of the QAR1,795.6 million. Now, if you look at our total revenues and net profit comparison between this year and last year, it was QAR120.85 million last year in the first quarter. This year, it has increased to QAR134.94 million. Our net profit was QAR40.77 million and it has increased to QAR48.2 million, that increased about 18% growth in net profit. The revenue increases predominantly it has come from KLJ Organic Qatar and there is a slight revenue drop in Qatar Sand Treatment Plant. The net profit is significantly due to KLJ Organic Qatar, Gasal, Q-Jet and Qatar Acids, while Amiantit and Sand Treatment have yielded slightly lower net profit compared to last year. Now, this waterfall chart, which shows us the growth from first quarter last year to first quarter of this year. As you can see, net profit as on -- for the first quarter of 2022 of QAR40.77 million. Means, increase of gross profit by QAR5.66 million. The share of results from our associates increased by QAR2.9 million. There's a slight increase in our sales and administration expenses QAR2.81 million. Dividend from share is more or less similar to last year. Other income has increased by QAR6.73 million. The financial cost has increased by QAR6.27 million, mainly on account of our Tower Project. And there is non-operational gains and losses, which includes adjustments for IFRS 9 and IFRS 16 compliance, at QAR3.59 million. So, that's how we reached QAR48.2 million compared to QAR40.77 million. Total assets as on 31st March, 2023, stands at QAR3,603.7 million compared to QAR3,354.82 million as on 31st March, 2022. Total equity stands at QAR1,795.6 million compared to QAR1,781.62 million, that's just a slight decrease. Now, our earnings per share is QAR0.101 per share for the first quarter compared to QAR0.086 in the first quarter of 2022. Our return on assets is 1.39% compared to 1.32% in the first quarter of 2022. Now, some updates on the Gulf Glass Factory. The first section of the building has been handed over to EPC contractor in November 22, for starting installation of equipment. So far, we have received 59 shipments and installation of equipment has already started. Testing and commissioning will be completed in the third quarter of 2023 and the commercial production is expected in the fourth quarter of this year, 2023. Now some updates on the real estate project. It has progressed very well. You can read this presentation. This we shared in our website also. So, we are progressing very fast on all fronts, both on the exterior work and the interior works. Here are some photographs from actual site. Fabrication, cladding work is going on, [ Persian ] restaurant, [indiscernible] on the podium 3 and podium roof [indiscernible] area. So, a lot of work is happening in the project. So, that's all for the presentation for the first quarter of 2023. Now, I hand it back to Mr. Aktham to take it forward for the Q&A session.

I hope that presentation was informative to the level of your expectation and the platform is used for any questions you would like to raise.

If you have any specific questions on the presentation, I can keep it open. Otherwise I can stop sharing and we can have a discussion. [ Feebie, Shyam ], you have any questions?

So gentlemen, if I just can learn from you that the session is okay to be closed. So, we'll have 30 seconds before we call this session off.

This presentation will be available on our website later today. And if you have any other questions, you can always write to us on [email protected] and we'll be happy to answer your queries relating to our performance or any other matters relating to QIMC.

Gentlemen, thank you a lot for attending our Q1 conference call consolidated results for QIMC. Thanks, and we look forward to see you for interim results. Thank you, and goodbye.

Eid Mubarak.

Eid Mubarak.