Qatari Investors Group Q.P.S.C. (QIGD) Earnings Call Transcript & Summary

[Audio Gap] Makuwerere to begin the conference. Phibion, over to you.

Thank you, Gavin. Good afternoon to you all, and thank you for joining us for Qatari Investors Group's First Quarter of 2023 Earnings Conference Call. My name is Phibion Makuwerere from QNB Financial Services. On the call today, we have 2 members from Qatari Investors Group management team. We have Joseph Abdo, who is the Chief Executive Officer. And we also have Ahmed Tawfiq, who is their Chief Financial Officer. [Audio Gap] immediately after. I will now turn over the call to Joseph. Joseph, please go ahead.

[Audio Gap] to welcome you to the earnings call of Qatari Investors Group, QIG. My name is Joseph Abdo, the CEO of the group. And here with me, Mr. Ahmed Tawfiq, our CFO. We are pleased to present to you the first quarter results of QIG Group for 2023. We will highlight the financial performance of the group and the progress that have been realized during the period. The group achieved a total revenue amounting to QAR 135 million for Q1, which is lower than the same period of last year by 36%. This drop was led by the industrial sector as a result of the market slowdown in the construction sector as compared to last year. In addition, other sectors, such as the Marine Services, have witnessed a decline in the top line due to the drop in cargo imports for Q1 as compared to last year. The group net profits for Q1 amounted to QAR 54 million, a 33% decline as compared to the same period of last year as a result of the drop in overall revenues. The group EBITDA reached to QAR 82 million for the period of Q1, 32% lower than last year, also due to the drop in overall revenues. Overall, the last couple of years witnessed a significant growth in the overall market due to the FIFA 2022 preparations and projects, which have been ended last December. This fact made the comparison with 2023 a bit difficult, but QIG has successfully managed to maintain a sustainable profitability margins despite the overall market decline in several sectors. Finally, we are in the process of evaluating some projects in the pipeline as part of our continuous efforts in implementing the strategy of diversification in investment to make more achievements that benefit the group and make us play a role in supporting Qatari's economic vision. Thank you. I'll move to the Arabic text, and then we'll open the session of the question-and-answer. [Foreign Language] Now we are ready to receive your questions, gentlemen and ladies.

[Operator Instructions] Your first question comes to the line of Zohaib Pervez from Al Rayan Investment.

I've got 2 questions. Firstly, do you see any improvement in the cement sector at the moment or the slowdown continues -- has continued even from the first quarter? Or do you think that there's improvement going forward? That's my first question. The second question is on the G&A expenses. Now in the fourth quarter of last year, we saw that the G&A expenses increased quite a lot, and they have continued to do so in the first quarter. Are there any one-offs in this? Or this is going to be the new run rate for the G&A?

Thank you for the question. Actually, for the first one, I'll handle it directly. And the second one, I'll leave it for Mr. Tawfiq, who is close to me. For the cement business trend, we're expecting a slight improvement on Q2 and better improvement as of Q3. And this is due to many projects that are coming in the pipeline. Of course, when I say many, we don't have to compare this situation to what we knew previously in 2022 or 2021, okay? But there are some projects. And we have been approached on these projects and even we won the supply of a couple of them. But they are going to be in the pipeline as of, let's say, May, June. And some of them will come again, August, September. And Q4, we are expecting a little bit busier quarter during this year. For the second question, I'll leave it for Ahmed to answer it.

Yes. This is Ahmed speaking. For the G&A expenses, the main increase basically is coming from 2 major provisions we have taken this quarter. The first provision, which is related to the -- as a result of our ECL calculation for the Q1. As known that Q1, the collections in Q1 was not at the best. So we decided to be more conservative in terms of the calculation of the ECL provision. However, this provision will be subject to revision during Q2 and Q3, hopefully, when the collection process is going to improve in the coming periods. The other provision we have taken is related to goodwill, but this provision is only a matter of initial provision. The goodwill -- if there will be any additional impairment on goodwill, it will be calculated by the end of the year. But we are being conservative and calculating the provision for each quarter separately. This provision is subject to be revised by the end of the year or subject to ECL impairment -- sorry, goodwill impairment assessment.

Just a follow-up to that. What was the quantum of these 2 provisions? How much was ECL and how much was goodwill?

Goodwill is almost QAR 6 million. And for the ECL provisions around between QAR 2.5 million to QAR 3 million almost.

[Operator Instructions] And there are no further questions at this time, so I'd like to hand back to Phibion.

Thank you, Gavin. If there are no other questions, I think that brings us to the end of our call today. Thank you for joining us. I would like to thank the management team for presenting the numbers and as well as responding to questions. And have a good afternoon. Hope we see you again in 2Q 2023.

Thank you.

That does conclude our conference for today. Thank you for participating. You may now all disconnect.