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

Hello, and welcome to the Qatari Investors Group Conference Call. I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome Mr. Roy Thomas to begin the conference. Roy, over to you.

Hello, everyone. This is Roy Thomas from QNB Financial Services. I want to welcome everyone to Qatari Investors Group fourth quarter and year-end 2023 financial results conference Call. On this call from Qatari Investors Group, we have Joseph Abdo, the Chief Executive Officer; and Adel Senna, the Chief Financial Officer. We will conduct this conference call with management first reviewing the company's results, followed by Q&A. I will turn the call now over to Joseph Abdo. Go ahead, Joe.

Good morning or good afternoon. I will go through my English text, then followed by the Arabic one, and we will go later on for the open sessions for the questions. Let me start first with the English. Ladies and gentlemen, it's my pleasure to welcome you to the earnings call of Qatari Investors Group known as QIG. My name is Joseph Abdo, the CEO of the Group; and here with me Mr. Adel Senna, our CFO. We are pleased to present to you the full year results of QiG Group for 2023. We will highlight the financial performance of the Group and the progress that has been realized during the year. The Group achieved a total revenue amounting of QAR 515 million for the year, which is lower than the same period of last year by 31%. 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 marine services have witnessed a decline in the top line due to the drop in cargo imports for the period as compared to last year. The Group net profit for the period amounted to QAR 187 million, a 2% decline as compared to the same period of last year as a result of the drop in overall revenues, which was partially compensated by our efforts to optimize operational costs as well as releasing of prior provision related to a pending legal case, which has been finally ruled in our favor in Q4 2023. Group EBITDA reached to QAR 324 million for the period, 1% higher than last year. Overall, the last couple of years witnessed a significant growth in the overall market due to the FIFA 2022 preparations and projects, which ended last December. This fact made the comparison with 2023 a bit difficult, but QiG has successfully managed to maintain sustainable profitability margins despite the overall market decline in several sectors. The earnings per share amounted to QAR 0.15 for the year ended December 31, 2023 compared to QAR 0.15 per share, similar to previous year. Accordingly, the Board of Directors of the Group proposed a cash dividend distribution of 15% of the paid-up capital amounting to QAR 187 million for the year ended December 31, 2023, which is subject to the approval by the shareholders in the general assembly meeting. Finally, we continue to focus on the validation and execution of projects in the pipeline as part of our continuous efforts in implementing the strategy of diversification and investments to make more achievements that benefit the Group and enable us to play an active role in supporting Qatar's economic vision. Thank you, and I'll move to the Arabic text, if you don't mind. [Foreign Language] Now we have finished with the text, and we are open for all the questions, ladies and gentlemen.

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

Thank you, gentlemen, for the presentation. How do you see the cement segment or the industrial segment panning out for 2024? It was a tough '23, we can understand. But where do you think the demand should be? Is it on an improvement front? Or are we seeing the same to same as last year? That's my first question. My other question is there is a big increase in the other income. Could you please explain what led to that increase?

Thank you for the question. For the first one, we do see 2024 at least, and I'm highlighting at least, at least equal to 2023 in the industrial sector, i.e. primarily the cement in which we exist. However, we do see some opportunities coming up on Ras Laffan projects on one hand. We do have a couple of projects through contractors that may materialize after Q2 2024. This is on one hand. And on the other hand, we do see recently some opportunities of a couple of export for some countries within the GCC and mainly Saudi Arabia. For the second question concerning the other income, I'll pass this one to our CFO, Adel, who is here close to me, and he will answer you.

Good afternoon, everyone. And in response to this question, as you know, we have investments in our associate companies. So the profitability has improved in a number of these organizations. So therefore, we have had an increased return on our investment. That's the first part. The second part is that we referred earlier to a reversal of a provision from prior year, and that was part of this increase in the income of QAR [ 16 ] million. I just want to just add another point to what Mr. Joseph said about the Cement outlook, just to share with you that in Q4 last year, the total sales has grown as a quarter compared to the prior year by 1.5%. So despite the full year being 31% down on the prior year, the trend and the running rate of Q4 is actually showing a promising outlook for 2024 compared to last year.

Just a follow-up on your last point, Adel. Could you explain it a bit again. So the fourth quarter volumes, you were saying are similar to the 9-month for 2023. Is that what you meant?

No. So Q4 2023 volumes sold compared to Q4 2022 volumes sold is a growth of 1.5%. This is in contrast with a full year 2023 decline of 31%. So in other words, the trend of the market picking up is showing in Q4 sales performance.

By the way, how much was the volume sold in Q4 2023?

In 2023 in total? No, Q4?

Total is fine because I have...

1.7 million total year, 1.7 million tonnes.

Our next question comes from the line of Rob Skepper from Ashmore.

Can I just ask, so in terms of that slight pickup in demand you mentioned in the fourth quarter, like what's driving that, which end markets are driving that change in demand?

Excuse me, can you repeat the question because the voice is not clear.

So for the fourth quarter, you mentioned that volumes are slightly up. What's causing that change in demand, what end markets have increased...

Yes. Okay. So I can share with you that our market share in the market has increased in Q4 and also throughout Q3 in comparison to our competitors. And this is a trend that we are seeing for our performance since 2021. So our market share within the market has increased by a couple of digit points.

Okay. And why is that? Why are you gaining share?

Why we are gaining shares, you mean?

Yes.

We're gaining shares because we are getting a couple of contracts additionally. And this is how we are progressing in the market. And then we have different segments in the cement. We don't have only the bulk, but we have the bags. And in the bags, today, we are more than 72% market share compared to the other bulk where we are close to 52% to 53% shares, and we were at 50%. And in the bags, we were at the 68% and we went up to 72%. So this is a good performance in the market by gaining shares on the 2 segments, the bags and the bulk.

[Operator Instructions] There are no further questions at this time. I will now hand the call back to Mr. Roy Thomas.

There are no further questions, we would like to thank Qatari Investors Group management for the results update and answering all the queries and look forward to speaking to you all for the first quarter 2024 results conference call. Thank you.

Thank you.

Thank you.

Thank you. This concludes today's conference call. You may now disconnect.