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

Good morning, everybody. I would like to welcome the shareholders and the audience for the conference call for 2024 financial results. Welcome, everybody. My name is Aktham Al-Baqali, I'm the Chief Supporting Services Officer. And next to me is Mazen Abu Safa, Financial Manager. And in front of me is the speaker, is Mr. Surya Narayanan, Senior Business Analyst. Gentlemen, our today's presentation is comprising from four elements. First, company overview, then financial performance for 2024, then operational highlights, and then we will open the floor for Q&A. If I may just ask you to close your mics and let us start this presentation. Surya, go ahead.

Good morning, everybody. It is a pleasure to make this short presentation about the results of the year 2024 of QIMC. Just an overview of the disclaimer and introduction about QIMC. So first is a company overview. QIMC was established in 1990 as a Qatari public shareholding company. We are listed on the Qatar Stock Exchange. As of 31st December 2024, we have a paid up share capital of QAR 475.2 million. That is 475.2 million shares of nominal value of QAR 1 each. Our core competency lies in establishing and managing small and medium-sized manufacturing companies. We have a diversified portfolio across chemicals, petrochemicals, energy services, construction materials, paper and plastic and food processing. We have 8 subsidiaries and 12 associates. When we say subsidiaries, we mean companies which are 100% owned by us or those in which we have management control. So these are our subsidiaries. We have Qatar Acids, which manufactures sulfuric acid; then we have Qatar -- KLJ Organic Qatar. Qatar Acids is 100% owned by us. KLJ Organic Qatar manufactures chlorinated paraffin wax, caustic soda prills, hydrochloric acid and hypo. In this company, we have 60% stake. 40% stake is held by an Indian company called KLJ India. Then we have Qatar Sand Treatment Plant, which is 100% owned by us. It produces washed sand and aggregates. Then we have National Paper Industries Company, which produces special tissues, toilet rolls, kitchen rolls and this company is 100% owned by us. Then we have Qatar Metals Coating Company called Q-Coat in short. This is a joint venture with Qatar Steel. We have 50% stake and Qatar Steel has got 50% stake. This produces epoxy-coated steel bars, taking the steel bars from Qatar Steel and adding value to it. Then we have Taabia, which is a tea packaging company and 100% owned by us. Then we have our latest business unit, which is Gizaz, Gulf Glass Factory, which produces glass bottle, jars and containers. You'll have update about this company soon. Qatar Paving Stones, which manufactures hollow blocks, interlocks, paving stones and kerb stones. Again, 100% owned by us. In Gizaz, we have 50% stake. Now our -- as far as the associates, we have QALEX, which is producing aluminum profiles, both mill-finished and coated. Then we have Qatar Plastic Products -- in QALEX, we've got 45% stake. Then we've got QPPC, Qatar Plastic Products Company, which produces FFS films, shrinkable films and wooden pallets. In this company, we've got 66.66% stake; remaining is held by QAPCO. Then we have QJet, which is Qatar Jet Aviation Fuel Company. In this company, we have 40% stake and the remaining is held by WOQOD. Then we have Gulf Formaldehyde, which produces urea formaldehyde. In this company, we've got 30% stake. Then we have Gasal, which produces industrial gases. And we have 29.5% stake and remaining is held by Qatar Energy and Air Liquide. Then we have United Chemicals, which produces calcium chloride by taking the hydrochloric acid from KLJ Organic Qatar. Then we have Mahaseel, which processes packages and markets various food products. Then we have Qatar Tunisian Oil Company (sic) [ Qatari Tunisian Food Company ], which is a subsidiary of Mahaseel, and it bottles and markets olive oil. Then we have Qatar Saudi Gypsum Company, which produces gypsum powder. Then we have Amiantit Qatar Pipes, which produces glass-reinforced pipes, and we have a 40% stake in Amiantit. Then we have FiberTie, which is a subsidiary of Amiantit Qatar. Amiantit holds 75% stake in FiberTie. FiberTie also produces GRP pipe, but using a different technology for a slightly different purpose. Then we have Qatar Clay Bricks Company, which produces concrete blocks, kerb stones and hordi bricks and we have 46.35% stake in Qatar Clay Bricks Company. May I request all the attendees to keep their mics muted until we have Q&A session. So Gulf Glass Factory, as we mentioned, it uses locally available sand and natural gas and using modern technology and equipment to produce high-quality lightweight glass containers of various sizes and shapes. It has a design capacity of 200 tons per day. That's about nearly 1 million bottles and jars per day. So that brings us to Corniche Park Towers, which is our real estate project, we have our own tower and which we'll lend it as multi-use. We have office tower, 5-star hotel and residences. We'll give you updates on this also. Now moving on to financial performance. So that gives a snapshot of the financial performance of the company for the year 2024. As on 31st December 2024, we have a total asset of QAR INR 4,052.38 million compared to QAR 3,816.36 million as of 31st December 2023. Total current assets stand at QAR 553.88 million compared to QAR 593.14 million. Total noncurrent assets QAR 3,498.5 million compared to QAR 3,223.72 million. Our total current liability is QAR 445.14 million, not much of change compared to QAR 441.83 million. Total equity of the shareholders stands at QAR 1,952.95 million compared to QAR 1,858.84 million as of 31st December 2023. The gross income for the year 2024 was QAR 482.74 million compared to QAR 492.37 million, that's a slight drop of about 2%. Profit before taxes and provision QAR 154.37 million compared to QAR 163.04 million, again a slight drop. Other income constitutes about QAR 100 million compared to QAR 91 million last year. Earnings per share is QAR 0.32. We'll discuss that in the upcoming slide. So net book value per share, this again will be shown in the separate slide. Equity attributable to noncontrolling interest is 5.46 -- QAR 55.64 compared to QAR 51.32 million. So that's total revenue QAR 492.37 million compared to QAR 482.74 million and net profit QAR 163.04 million compared to QAR 154.37 million. Now comparison between last year and this year. Our net profit last year was QAR 163.04 million. Compared to that, our gross profit has increased by QAR 10.66 million and share of results from associates are up by QAR 9.29 million. Slight increase in sales and distribution expenses. Dividends more or less the same. Other income has come down by about QAR 21 million, mainly due to difference in tax exemption income. Finance costs lower by QAR 5.2 million, and nonoperating cost, which relates to IFRS compliance, is QAR 5.32 million, and noncontrolling at QAR 3.73 million. So we ended the year with QAR 154.37 million as net profit for 2024. Now total assets QAR 3,816.86 million compared to QAR 4,052.38 million and total equity QAR 1,858.84 million compared to QAR 1,952.95 million. And our earnings per share is QAR 0.34 per share compared to QAR 0.32 -- QAR 0.32 compared to last year's QAR 0.34. And return on asset 3.92% compared to 4.47% last year. Now some operational highlights. Our glass factory, Gulf Glass Factory, all the official tests have been completed and the soft production has started and the company has already passed the requirements for ISO 9000, 14000, 45000 certificates and ISO 22000 and HACCP certification are underway. The commercial production in full scale swing will be starting from first quarter of -- 1st April 2025, at the end of first quarter. Now in terms of update on the Corniche Park Towers, the project is about 99% complete and the soft opening is expected in April 2025. So that is a short presentation about QIMC's performance and operational highlights for the year 2024. I hand the control to Mr. Aktham to take this forward.

I hope this brief is good. I mean, to make it interactive with you guys, to receive any questions you might have, the floor is yours, gentlemen, anybody who wants to participate and raise any questions.

Can you hear me?

Yes, please. [Foreign Language]

Aktham, you just mentioned that the commercial production of the glass factory is going to be...

Your voice is not clear.

Your voice is not clear, [ Zohaib ].

Can you hear me now?

Yes, this is better. Yes, it's better now.

I just wanted to know that you just mentioned that the glass factory's commercial production is going to be from the 1st of April '24, correct -- '25, correct?

Correct. Yes.

And also the glass towers are supposed -- sorry, the towers are going to start from this quarter or second quarter. The leasing for the towers, when will that start?

The what?

Leasing, leasing.

Okay. The leasing, okay.

And what constitutes the miscellaneous income? Last year, it was QAR 75 million. This year, it has come down. So what is part of the miscellaneous income and why did it decline?

Thank you. Thank you for your questions, Mr. Zohaib. I give back to you. I would like to collect any other questions before I start addressing yours. Anybody would like to raise any questions, please initiate. Any other questions before I start addressing Mr. Zohaib's questions? Okay. Mr. Zohaib, you mentioned two points or introduction for your question, building up the glass, yes, we are anticipating that the commercial production will start 1st of April. But it's worthwhile noting that the production is right now is at 85%. This is a trial stage. This is the norm in the glass when you are running a furnace. So we are producing right now, pre the operation, products at 85% capacity right now. And we are producing the common, let's say, bottles and glass. And we started already I mean, exporting, I mean, to the MENA area. So this is to address -- just last point. For the tower, yes, we are anticipating that the tower opening will take place in April, mid of April or third week of April, hopefully. The leasing, you asked about the leasing, how is the leasing going on, we've got three towers, as you know and as we have explained previously and in this presentation. So two towers are going to be managed by Accor Swissôtel, the hotel and the serviced apartments. So we are free of headache from those two major elements of our product. The other one is offices. We have started leasing. We have signed one -- around two floors to be leased. Three floors will be occupied by the QIMC, two floors will be business centers, if I may say. The rest -- so the rest will be around half of the office towers is now on the market to be offered. So regarding the miscellaneous, the QAR 25 million, to answer, I would leave the floor for Mazen to give you the results.

Yes, regarding the other income, it's the mainly the [indiscernible] results in 31 of December, 2024, which is including QJet, Qatar Plastic, Clay Bricks, Amiantit and Gypsum and Gulf Formaldehyde and Gasal. This resulted to about QAR 100 million and to be classified in the balance sheet as the other income or [indiscernible] would have come from [indiscernible]. I think we'll talk about that in interim.

So maybe to give you, let's say, a little bit more of [Technical Difficulty] in the core business, we have two -- let's say, two sectors. We have associates and we have sister companies -- subsidiaries versus the company and we have associates. So what we have seen is related to the associates. And we have also sister companies in which we process for control. Either we own 100% or above 50%, yes. Any other questions, gentlemen?

Sorry just a clarification. So the other income which was QAR 76 million in 2023 and QAR 55 million just concludes from which...

Again, because your voice is not clear, what's the question?

So in the financial statement, there is other income which is QAR 76 million in '23 and QAR 55 million in '24. So this has come down by like QAR 19 million. So I just want to know what is this other income? This is also some companies or this is miscellaneous income?

If you talk about the balance sheet, this is -- it should be considered as -- this is in income statement. It will be some -- mainly is tax obtained from the other companies, from some of associates. This amount, the QAR 19 million.

It's related to some benefits that we have received from the taxation authorities related to one of our associates, mainly Gasal. We got the claim and we got it back from them.

Last year was higher. This year, this will be bigger. And that's what's higher last year...

Last 2 years.

I hope it is clear.

That's clear.

Any other questions? If I may call this session for closure, if anybody is still preparing himself for, please raise up your voice. Otherwise, we will close this session. So thank you, I mean, for your, I mean, commitment of attending all of our conference calls. We appreciate your participation, and we hope, gentlemen, that we see you in the first quarter results. Thank you.

And based on the input we have received from the last meeting, we are now going to upload the English as well as the Arabic version of our investor presentation on our website from this time onwards.

Thank you, again.

Thank you.