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

Good morning, everybody. We are about to start. We'll try to be sharp in 15 seconds. We will start officially this meeting. Just for Joseph, if you could make your mic off, I would appreciate it. Good morning, everybody. Just before I start, I want to make sure that my voice is hearable. If no responses, I assume that everybody can hear me, right? If anybody just can answer. Anybody, Muhammad Adnan, can you say if you can hear us?

Yes sir, we can hear you.

Okay. Thank you. Thank you. Thank you. A very good morning, and welcome to everyone gathered here. It is my privilege to open this conference call for QIMC end of year results. Our presentation today for the investors comprises of 4 topics. First one is company overview. Then, we'll go over financial performance, then operational highlights. And at the end, we'll open the floor for Q&A. Let me present myself. Myself is Aktham Al-Baqali, and I am the Chief Corporate Supporting Services Officer for QIMC as a group. And I've got in my left hand, Mr. Mazen Abu Safa, the Manager of Finance at the group. And we've got as a speaker, Mr. Surya [ Kalyan ], Senior Business Analyst. Please, Mr. Surya [ Kalyan ] please go ahead with this presentation.

I hope the presentation is visible. Good morning, everybody. We'll first have a quick overview of QIMC as a group. So we were established in 1990 as a Qatar is a public shareholding company. We are listed on the Qatar Stock Exchange. We have a paid-up share capital of QAR 475.2 million. That's 475.2 million shares of nominal value of QAR 1. 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. These are our associates, starting with Qatar Acids, which is a sulfuric acid manufacturing company in which we have 100% stake. Then we have KLJ Organic Qatar, which produces chlorinated paraffin wax, caustic soda prills, hydrochloric acid and hypo. In this company, we have 60% stake and 40% stake held by an Indian company. Then we have Qatar Sand Treatment Plant, which produces washed sand and aggregate. We are 100% owners of this company. Then, we have National Paper Industries Company, which produces facial tissues, toilet rolls and kitchen rolls. We are 100% owners of this company. Then we have Qatar Metals Coating Company shortly called Q-Coat, which produces epoxy-coated steel bars. This is a joint venture with Qatar Steel. We have 50% stake and Qatar Steel has got 50% stake in this company. Then you have Taabia, which does tea packaging. And in this company, we have 100% ownership. Then we have GIZAZ, the Gulf Glass factory, which produces glass bottles, jars and containers. We have 50% stake in this company, remaining 50% stake held by other investors. Then you have Qatar Paving Stones, which produces hollow blocks, interlocks, paving stones and kerb stones. And this company is 100% owned by us. So these are our subsidiaries. Now we move on to our associates, starting from QALEX, Qatar Aluminum Extrusion Company. We have 52% stake in this company. It produces millfinished, powder coated and special purpose aluminum profiles. Then we have Qatar Plastic Products Company, which produces FFS films, shrinkable films and then wooden pallets. In this company, we have got 66.66% stake, the remaining held by QAPCO. Then we have Qatar Jet, which is the aviation fuel distribution company. We have 40% stake in this company, remaining 60% held by WOQOD. Then we have urea formaldehyde manufacturing company, Gulf Formaldehyde. In this company, we have got 30% stake. Then we have Gasal, which is the industrial gases manufacturing company. In this company, we've got 29.5% stake, remaining held by Qatar Energy and Air Liquide-France. Then we have United Chemicals, which is a calcium chloride manufacturing company. It is a subsidiary of KLJ Organic Qatar. It takes the feedstock from KLJ Organic Qatar and another joint venture company, Gulf Chlorine, and it produces calcium chloride. Then we have National Food Company, which is -- in which we have 20% stake, remaining 80% held by Hassad Foods. Then we have Qatar-Tunisian Food Company, which [indiscernible] bottles and markets olive oil. This is a subsidiary of Qatar Foods Company. Then we have Qatari-Saudi Gypsum Company, which produces gypsum powder. In this company, we've got 33.33% stake. Then we got Amiantit Qatar Pipes Company produces the glass reinforced pipes. And in this company, we've got 40% stake. And then we have FiberTie, which also produces glass reinforced pipes using a different technology for a different utility. This is a subsidiary of Amiantit Qatar Pipes and Amiantit holds 75% stake in this company. Then we have Qatar QCBC, which produces concrete blocks, kerb stones, and Hourdi bricks. In this company, about 46.35% stake and the other investors hold the remaining shares. We have an ongoing project, which is a salt production plant at Um Al Houl area. This is a joint venture with Mesaieed Petrochemical Holding Company. And it will ensure that Qatar's self-sufficiency in salt and this company will produce industrial salts necessary for petrochemical as well as bromine, potassium chloride, and demineralized water. And we hope this project will be operational very soon. We'll have more details about the state of this project towards the end of this presentation. Now we move on to the financial performance of the company. As you can see, the total assets as of 31st December 2025 stands at QAR 4,314.68 million, compared to QAR 4,052.38 million. That's an increase of 6.47%. Total current assets is almost the same as last year, QAR 563.7 million. Total noncurrent assets QAR 3,750 million compared to QAR 3,491 million. The total equity of the shareholders stands at QAR 2,019.31 million, compared to QAR 1948.86 million as of 31st December 2024. During the year, the gross income from the subsidiaries is [ QAR 503.65 million ] compared to QAR 482.74 million last year. That's an increase of QAR 8.33 million. However, some of the subsidiaries reported lower net margins. So our profit for the year stands at QAR 140.9 million, compared to QAR 154.4 million, which is about 8.7% less. The other income during the year was QAR 49 million compared to QAR 55 million. The earnings per share stands -- for the year stands at QAR 0.3 per share, compared to QAR 0.32 last year. Net book value per share is QAR 4.25 per share, compared to QAR 4.10. The equity attributable to noncontrolling interest is QAR 103 million compared to QAR 55 million as of last year. So total revenue has increased from QAR 482 million to QAR 503 million. However, the net profit is slightly lower at QAR 141 million, compared to QAR 154 million. This is furthermore details, as you can see here. The gross profit from subsidiaries actually lower by about QAR 7.4 million. Our associates companies have done well. The share of results from associates is higher by about QAR 20.7 million. Sales and administration costs higher by about QAR 11.4 million. Other income lower due to rental yield. No significant difference in the other items. And the net profit lower by about 8.7%, compared to last year. The total assets has increased to QAR 4.3 billion compared to QAR 4.05 billion as of 31st December last year. Total equity stands at QAR 2,019.31 million compared to QAR 19,48.9 million at the end of the last year. So the return on assets is about 3.37% compared to 3.92% last year. And the earnings per share is QAR 0.30, compared to QAR 0.32 last year. So that was a snapshot of the financial performance of the company during the year. And the company has already announced 13% dividend for the shareholders, and the AGM will take place on the 11th of March at Al Mourjan Hall in Swissotel Corniche Park Towers at 9:00 in the night being Ramadan. Now about some updates on the Qatar salt project. The project management company, a senior process engineer has been identified and mobilized. Then the [indiscernible] had submitted a marketing report, and we have asked for some changes, and that should be ready by the end of this month or end of the -- in February, it will be ready. The FEED proposal technical, Al Bawani Water & Power from Saudi Arabia has been awarded this project and the work has started. And consultant, the evaluation process is completed and the [indiscernible] consultant is identified. And going forward, the pre-FEED activities will continue with AWP, and we'll finalize the marketing study, including 3 additional byproducts and awarding of the consulting products will happen during the course of the year. So that's it on the company's performance during the year 2025. I hand it back to Mr. Aktham. We have also updates on the Corniche Park Tower. The Swissotel had a soft opening on 22nd October 2025. Since the opening, the hotel has sustained good occupancy at the rate of 65% to 70%. And in terms of online reputation, we have performed -- we are doing very strongly with 4.8 over 5 on Google, 9.1 over 10 on Booking.com, 5 on 5 on TripAdvisor, and it has improved our rank from 74 to rank 7 among the 229 hotels in Doha. Residential Tower operator under brand Swissotel has started leasing with growing demand and active pipeline of tenants. And as you all know, QIMC has already relocated officially its headquarters to this building in the 21st to 23rd floors in September 2025. And the office tower has begun generating rental revenue through leasing of a floor to a semi-government entity and further growth is anticipated as a lot of tender outcomes for the core and shelf space are awaited. Overall, the handover project is ongoing, marking the final transition from a development project to a fully operational property very soon. So that's the update we have on QIMC, its important projects. I will hand it over back to Mr. Aktham for Q&A.

Thank you, Surya. It was very informative. I would assume. And if you can just remove -- stop the sharing, so we can see the screen of the investors. Please, the floor is yours now if anybody is having any questions, contributions, please be my guest.

This is Muhammad Adnan from AI Rayan Investment. I have a question that the gross profit has declined year-over-year, even though the revenue is up. So if you could tell us like what's the main factor of this decline, like which business has contributed to this decline? And if you could provide me what would be the impact of the expansion you just announced on 2026 bottom line?

Which expansion you are saying?

Salt expansion.

Small expansion?

Salt, salt.

Salt, salt. Okay, okay. It's not an expansion. I'll come to you. So let me just make sure that I got your questions right. So you are asking about the slight slash back on the gross profit. You need to understand a little bit more. And also you need a little bit more clarity on the salt project going forward. So Muhammad Adnan, thank you. Is there anybody who is having any other questions? Anybody is having any other questions? I would like to go by receiving the questions and answer all of them at once. So okay. Then I'll answer this question, and then I will open the floor again for anybody who might be developing new concerns. So the gross profit, Mazen, you would like to address this question? The gross profit is related to the companies and subsidiaries. So Muhammad Adnan, you know that our financials is consolidated. So we've got those companies who are more than 50% being consolidated without balance sheet impacting our gross profit. Maybe this impact is coming from the Sand Treatment and the Paving Stones, so to say, the construction sector. Construction sectors has, let's say, performed less and due to the low demand in the market. So the sales impact is huge. Also, we've got some disruption on the query at Qatar Sand Treatment for almost 4 months has been settled right now since the last quarter. So we have faced discontinuity on some raw material for 4 months due to some logistics of handing over from one query to another query. So this has dropped down the operation at [ QSCP ] for that period that has been settled already. And also, there is a slow demand on the, let's say, construction products. As Mr. Surya [ Kalyan ] has indicated that we've got this kind of jack up from our associates. Our associates has outperformed 2024 by big times, mainly Amiantit because of the oil and gas projects that we are enjoying and awarding, and this will continue for the coming 3 years. And also, we have got KLG is really doing -- I mean, big time better than '24. And we've got also Gasal is really capitalizing in what we have invested in Ras Laffan as an infrastructure. And as you know, that we've got a basket -- a big basket of operational companies, where there is a drop in one sector, there will be definitely some support from other sectors. Regarding the salt, the salt is still on the FEED study or so called the basic engineering right now. We will be making the final investment decision towards the fourth quarter of this year. But we will be keeping you updated of what's going on each quarter. I hope this answer is satisfiable, Muhammad.

Yes, yes, I'm clear.

Any other questions from any other gentlemen? Okay. Then if there is no any other -- if you allow me to close this session. Hope that we see you soon on the first quarter right after...

Also during the AGM.

And also at the AGM on the 11th, yes. Thank you. Bye-bye.