Renaissance Services SAOG (RNSS) Earnings Call Transcript & Summary

Familiar names. So those of you who are familiar with the way we run these, it's really your event. So the questions come from you. And I'm here with my colleague, Vishal, and both of us will be here to answer your questions. The -- without further ado, we'll pass it over to whoever would like to ask the first question. We take about an hour of this, and we look forward to the discussions ahead. Thank you.

So Vishal, you can go ahead and ask your question.

Vishal, this is [ Abbas ]. Can you hear me?

Yes, [ Abbas ]. We can hear you.

Congratulations on a good set of results. I had a couple of questions. Obviously, all of us [ produced ] the Chairman report with a very fine-toothed comb, and not just for things that are actually in the report, but things that are not. So my first question is something that I did not find any reference to in this particular Chairman's report is, any update on the Manazil project? I think in the last second quarter company report, there was one statement that said that you guys are in the process of bidding for a 20-year project, which could be transformational for the company's visibility. I do remember that centers quite well. This time, we found absolutely no reference to this project. So can we ask for an update in terms of what's happening with the Manazil project? And just a follow-up, is PDO is known to be one of the more professional sort of organizations in the country, and it's very unlike them to have this sort of delay. At least, I mean that's been anecdotal evidence from what I have seen over the years. So if you guys can just speak about, if at all, there's a delay, what is causing the delay? Are we talking about a cancellation? Are we talking about relooking at it with a different sort of scope? So that's my question. Yes.

Thank you very much. And first of all, the reason why we've not got any particular update in this Chairman's report is because there is no change from the status this time. Where we've been updating is when we moved from being in the technical evaluation stage, into the commercial evaluation stage and then into the final point where we were telling you that we were waiting for that outcome. And the factual reality at the moment is we're still waiting for that outcome, so there is a change in that. The last update we had from the PDO Manazil team formally to the tenderers was to say that we could expect something around about now, about a fortnight or so into November. Deadlines have come and gone previously. So it is a concern when it does take longer than usual to get the response. I think what PDO have said to us very consistently is it is a massive project for them because of that duration going through to 2044 to the end of the current concession period. So the other issue is that there are a range of options on their plate to consider in that in terms of greenfield/brownfield options and not getting into the nitty-gritty of the tender. So it is taking that a bit of time, and we just have to exercise a little patience on that. The -- if I comment when you talk about is there any possibility of the project being canceled, I think we have to look at what are the options for us. And as you rightly say, we see this as transformational. I mean in simple terms, at the moment, in the pack of the permanent accommodation for contractors' footprint, there are 15,000 beds in the PDO oilfield concession areas at the moment. After Manazil, whatever happens, there are going to be 30-odd-thousand beds in that marketplace. So it's doubling up for us. The -- for us and others competing for it. Now under the terms of the tender, if we are successful in that tender, we stand to gain 1 of 2 packages north or south. And they are -- north represents 45% of it; and south, 55%. So they're fairly evenly distributed. And the -- we believe that we would be a serious contender. We know it's down to just a couple of bidders left in the frame, 2 or 3, and we're still 1 of them. So in the event of us winning, obviously, one of our key, if you like, strategies is about having projects that we can build, that we can get a reasonably rapid return on the equity that we and any co-investors put into that, that we can get a long-term operational phase to work on following that project. So it's not just any project that we look at, it needs to have those salient features, and Manazil has those features for us. The approximately sort of 50/50 whichever package, this would require an investment for the greenfield project of about OMR 200 million. Obviously, we would have an element of debt coming on to our balance sheet for that as we do 30% equity, 70% debt. And that would start on a gradual basis over the next 2.5, 3 years before the P&L element kicks in and we start operating. So in that event, in the event of us being a successful bidder, that would be transformational for us. The -- I want to just explore your question of what if it were canceled. And the canceling the whole project is not an option because [ EDOA ] wants to replace the older state of its own camps. And whilst numerically that's a smaller portion of it, it's a very important piece of Manazil, and that has to be done anyway. It has to be done because of the sustainability of the facilities. They were built a very, very long time ago. The second piece is PDO has seen, the same as SEZAD has with Renaissance Village Duqm and are customers there, that when you look after the workforce properly and permanent facilities with the right minimum worker welfare stand, there's recreation and health care and good nutritious food and so on, the -- it's transformational to performance, to productivity, to retention of [ SAR ] to HSE performance, to attracting Omanis to work in remote locations and so on. So it's a win-win-win. And they have proved that -- and it uses less permanent facilities, use less utilities, so it's a greener option. And by building new, you can talk more green in. So the argument of getting at least the delta, whether the packs will provide 50% of the accommodation, and of course, we are the predominant leader in the packs, we operate over 50% of the beds, we've always won 100% of the amount that we're allowed to win when there can be 1 of 2 winners in every PDO pack-related contract that we have bid since [ 1990 ]. So I think the need to build is there. But if they were to cancel the issue of Manazil as being built by developers like ourselves, we're a developer/operator in terms of services we provide, then they would build it themselves, in which case, we would not have to put up the equity and the debt and raise the debt. We would then be a serious contender to be one of the operators in 2 to 3 years' time. So in any event, Manazil is going to be transformational if it's successful, and we do have that track record of always having been successful to the maximum allowable award since PDO have been rolling out these types of contracts. So that's the story on it and we wait. As things stand at the moment, the bid is still live, and we are waiting for the outcome. I hope that gives you a clear enough answer to your question. Thank you.

Absolutely appreciate the answers, Steve. I think that gives us good reason for optimism and let's just wait and watch and hope that it kind of falls in your favor. The second question I had is, again, it's something...

Sorry. I'll just add one thing to it, is in the event that it was the latter that they decided to build the delta of the 15,000 beds and then we have to wait to compete for the operation, what it does do for us is at the moment, we are keeping our, if you like, project finance plans keyed for Manazil. It's not that we wouldn't do other projects, but we're not looking at other major projects. We do have and we're working on this thing we've been invited to in Abu Dhabi, again, oilfield, this time, offshore building on Ireland. We're looking at a project in Saudi, and we've again been invited, too. Because of our capability here, proven capability and what we've done here, the -- we would -- in the event of them not requiring the build, we would turn that attention full scale to those other opportunities. Because for us, PDO, of course, we're delighted to build PDO if required. But we're talking to a client partner who has clearly been happy to award us constantly over the years. And we've had to be competitive, and we always have been on these things. And they really like our technical solutions as well. That much, we've had in the dialogue with them as to how pleased they were with the -- that we understand what they need. Now to be able to move project finance to something that we may not be successful without being the project investor, whereas if PDO, we would expect to be a serious contender whichever way it goes. Thank you.

I mean yes, sure, give me more good reason for optimism, I guess. Let me come to some of the good news that you guys spoke about in the third quarter report. You spoke about winning the Oman [indiscernible] of the catering project for the T20 World Cup. So that was good news. You spoke about this winning the tender for 3 years, the OMR 9 million-odd for the smart meters. Could you speak about what sort of margin impact, one, are you seeing from -- because it's a 3-year project, what sort of margin are you hoping to make from the smart meter project? And do you see a rollout happening soon to the rest of the country as well? And of course, what would be the -- I mean the T20 World Cup would be a onetime event, but what sort of bottom line impact are you seeing in the fourth quarter?

So I'll start with T20 and then back into the smart meter rollout. So T20 has come and gone. It was a terrific event for Oman, and congratulations to Oman cricket and the Oman cricket team for their participation in it. And I think it was a great event for Oman. Now in reality, whilst I do not underestimate the scale of effort and task of what we had to execute at short notice, in reality, it took place over 3 days with a little bit of activity in the intervening day between matches. And so whilst it's a huge feather in our cap that we now add to our earlier event -- catering events like the Asian Beach Games, and the EFG Sailing Arabia and so on, we now have ICC T20 World Cup. Yes, it was a smaller phase at the start of it, but it's still that feather in our cap. The reality is it is not a massive value contract for the reasons I've described. When you look at the total numbers of people, of the teams, the officials, the spectators, et cetera, coming into the ground, the VIP section, so we have lots to do. But if you think of the numbers over 3 days, it's not going to be a life-changing number. That's what I want me to bring to your attention. And at the same time, I'm delighted -- I'm not at liberty to say because of contractual terms the exact value of that. But I am delighted to say that we -- it was profitable, but it's not going to move the dial, if that's what you're looking for. It's a nice thing to have, and it's great credentials for us going forward. On the smart meter rollout, the -- again, I'm a little sensitive to client in terms of talking about profit margins. You see in general terms, in general terms, we're a 10% margin business. That side, when you get into the technical side and so on, it is north of that average. So that's as much guidance as I could give on that. The -- what is great about it is that there will be more such opportunities because MEDC will not be the only electricity distribution company rolling out smart meters. And the solution we've got, which is 100% Omani workforce carrying out the work with a brilliant international technical partner who's going to bring knowledge transfer and capability transfer and upskilling of that Omani workforce to be able to install the smart meters, and similarly, as those smart meters make those Omani colleagues redundant in their current role, there's an upskilling piece to it to make them, a, capable of doing other smart meter rollout contracts if we were successful; and b, to join our hard FM workforce otherwise. So it's got a lot of very positive things about it. Thank you.

Since we're talking about good things, let me ask your views on a couple of other things that you guys announced. There was the 1-year extension of the Ministry of Health contract, and you mentioned in the past that you handle almost 100% of all the requirements. Now is this because it's a pandemic here that they've only extended by a year? I mean so basically, my question is coming into 2022, if they are happy with the scope of services that are provided by you, do you see this contract being tendered for a longer period? I'm just asking this question as a shareholder and just to get visibility on this business given how important it is to Renaissance. Could you talk about that? So that's my first question. And the second question I had is the waste management project that you guys are going to go live in 2022, could you give us some guidance in terms of what sort of top line and bottom line impact are you expecting in '22? And what sort of aspirations you have for the business going forward?

Sure. So let me start on Ministry of Health. So Ministry of Health, we are the sort of 100% services provider across their main hospitals, et cetera, the length and breadth of the country. So we were defending that as an incumbent. And the cost of doing business has gone up, and the Chairman touches on this in his statement, that we're starting to see those costs of -- the last few years' cost rises being translated into new contract terms and conditions as cyclical contracts come around. So we were a little concerned would we be able to retain 100%, the one-off that happened. Now what happened during the pandemic was there was a mixed response. A lot of people picked up the tender. A lot of people went and looked at the -- how we're performing. I'm very pleased to say I don't think I would be speaking out of turn because our client is delighted with our services. And so that element is very much there. And -- but I think there was concern in the tender board at a mixed response. The number of tender is not submitting. Some -- there was -- one of the tenders had a technical fault in it in relation with the bond. And in all cases, the prices have gone up. And so for that reason, I think there was a view to look at, can we extend for a year while they consider their options? So we have entered into negotiations with them for that extension, which as you see from the Chairman segment has been granted, but it does include us putting in some changes in prices that deal with additional cost of doing business while they consider their options. The -- what we can see from what is, of course, posted on the tender board's public pronouncement on these things, we can see that we are in what we call [ L1 ], the lowest bit of position, competitively, a game across the whole system. So we have to be a little patient as to whether MOH decide to then award us what would be a 3-year contract with a 1-year option on top of this extension or whether they decide to rerun the tender because of the nature of what happened in that tender process. The -- but if they were to award the tender on what was submitted previously and the -- I believe they have a very good price from us in that. And -- that if they were to take advantage of that price at this point, then we could expect a further award beyond this 1-year extension and we'd be taking a 3-year full contract period after that. But that decision is not made yet, and we will come back accordingly on that.

Yes. I think my second question was regarding the waste management project that you guys are going to start in 2022.

Yes. So on the waste management, the grand total across all the waste collection contracts, the values of those projects are about OMR 234 million, and we have about OMR 19 million of that. So we came late to the party. It was a diversification of our services. But since we came late to it, we've won. We've won in SEZAD, we've won in Wusta and now we've won for the PDO concession area. Now in terms of top line values of all our be'ah contracts, of that OMR 234 million -- that OMR 19 million, about OMR 7 million is in what we were doing already in Wusta and in SEZAD. So this will add another OMR 12 million to that, taking us up to that OMR 19 million. Now you have to -- part of it happens very quickly. The dump site clearance is about OMR 1.5 million of that happens in the first 2 years. And then the balance, OMR 10.5 million, is over the remaining -- is over a period of 7 years.

Okay. And the last question I have -- I mean there's obviously some cause for concern. You guys have been speaking about this in the last few company [indiscernible] and this time, I think you elaborated it a little bit more in terms of the challenges you're facing to ramp up occupancy in Duqm. Now I believe Renaissance is already committed to adding another 5,000 beds in addition to your current capacity now. So you're looking at, at some point, 22,500 beds coming on stream. And currently, you're only looking at occupancy of 12,000 beds. Now you've, of course, highlighted all the challenges that you're facing to ramp up this capacity. But it's been happening for a while. It's something you've spoken about in the last [indiscernible] reports. So as shareholders, one concern is, will this problem go away? And how soon will it go away? And in the event that the problem doesn't go away, does occupancy level -- do occupancy levels remain at the 12,000-odd? Or despite the challenges you're facing, given the subpar accommodation provided by some of the other clients and maybe the authorities, I mean doing the bed but not doing enough to sort of climb down on it, where do you see occupancy levels next year or 3 months from now? Because these challenges are not something that's going to be easy to sort of fight in a month or so, and you guys have already spoken about this for 9 months now. So it gives some cause for concern. So I just wanted to hear your views in addition to what you wrote in the company report.

Well, we absolutely share your concerns. I think we're singing from the same song sheet in terms of what you as a shareholder and what our shareholders deserve from this project. And it is [indiscernible] that we have a major project being implemented in Duqm. It is at peak occupancy right now. We should be full. If I can clarify on the '22 [indiscernible] effect, it's not -- we don't have plans to build more. If you took the footprint at every single room, so let me say a room that could take shared accommodation for 6 or shared accommodation for 4 or 2 or singles, the single rooms are single rooms, full stop. But the shared accommodation, you'll have people taking 4 to a room, some taking 3, some taking 2. And we have [indiscernible] for each of those categories where the yields we get from that room will be very similar. So at the moment, with the demographic of rooms that are already occupied, the capacity is currently standing at 18,600 because of some of those 6 -- potential 6 is filled with a 4 and paid for as a 4 or a potential 2 is a single and so on. So that's how that works. So we can go up to 22,500 if the demographic demand was precisely for the mix of beds. But once we're full, if we were full at 18,600, it's as good as being full at 22,500 and so on. It's the principle of that. In terms of what are we going to do and how soon do we expect to see a change and what's the prognosis for the remainder or -- for next year, first of all, we have been at every level knocking at this door, and I think that is the nature of the note of consumer you expressed in the question, that we have been bashing this door for a long time. And we've had, on one hand, a lot of help, cooperation. And in fact, the team went and actually moved people. There were people from Ministry of Labor, from SEZAD, from the [indiscernible] office, from Duqm municipality, from [ ROP ] who shut down a lot of these substandard places. But unfortunately, there are contractors, subcontractors and employers in Oman and in Duqm who always try and get around this. They somehow think that looking after people in conditions that frankly match all -- tick all the boxes of definitions for modern slavery is somehow going to save them money and be good for the country. I mean the reputational damage that would be reeked on Oman, on Duqm, on the whole SEZAD project if international finances who absolutely rely on the fact that is proper [indiscernible] standard will be provided. And I think that's an important thing to note, that what we provide is not profligate access standards. They meet the UN [indiscernible]. And if you were to build a temporary camp to the same [indiscernible], it costs you more than staying with us. Those are the economics on it. That's the competitive nature and our confidence in our project. So when you look to pre-COVID, we were expensing enough [indiscernible] occupancy. And I think some of the less scrupulous contractors took advantage of that to thin out into these unacceptable substandard locations. So this could be resolved overnight if either the authorities or the major project oversight insist on their own standards being implemented immediately. We would be full tomorrow. The -- it's not happening as fast as that, but we are assured of different support from various quarters of it. But at least we know there is a constituency of potential occupants already in situ in Duqm that could solve this problem overnight, and they're required for a year to finish the refinery. It takes us into 2023 when there'll be more visibility on other projects happening. The alternative is there's -- whilst there will be some mobilization from the civil [indiscernible] teams, there's a mobilization coming in at ME&I teams, the mechanical, electrical and instrumentation teams, required to finish the refinery. They're not mobilizing them because of the punitive airfare cost, and there's a big debate going on around that. As soon as that debate ends and then there's a solution to it, then we can expect to see an increase in occupancy because the EPC contractor, the first 3,000 of those has already pledged those to come and join us in Renaissance Village Duqm. So I can't give a number of what the occupancy will be next year because of this problem. I can give a number of what the occupancy can be, which is full. The population is there and available to fill us overnight. I hope that answers your question. Thank you.

Yes. And the last question for me is when you guys were doing the capital reduction, there was talk of Renaissance committing to paying the large substantial portion of its cash flows after meeting its various debt commitments to shareholders as dividends. And of course, pandemic hit. Profitability was affected. I mean you guys are still managing to do well. This quarter was fantastic. But just in terms of that commitment that cash flows will go back as dividends to shareholders, is that something that we can still hold you guys?

So it is our policy. I mean during the latter years of our holding in Topaz, I think we explained why we couldn't pay out dividends at that time. That was for good reason. We had to put the business first. We had the -- obviously, the benefit of the divestment funds coming to us, and we pledged at that time we would go back to our original dividend policy, which is that we will always -- we want to be paying a regular and consistent dividend to our shareholders. Of course, we will prioritize when there is the opportunity to reinvest in the business, that we would prioritize cash going to growth if that is going to be value accretive to our shareholders. But notwithstanding that, we want you to be able to see a regular and consistent dividend similar to what you've seen over the last 2 years. That is our desire and our goal to do similar every year and in the event of any win full year, to do better than that. But Vishal, can I ask you to add to that?

So Steve, you have covered very well. And [ Abbas ], you can see our liquidity position. So we are set for projects as well as set for our consistency of dividend payment. And Steve has covered it all.

That's all from my side. I mean I really appreciate you answering comments with that much transparency and the company is in safe hands with you two and, of course, the Board.

Thanks very much for some great questions. And I would add on the -- when you're looking at the liquidity on the balance sheet, the -- we've had our team who have really been doing very well on collections given the current circumstances in the market. And of course, things are getting better with the economic activity starting to regalvanize. But we do have 1 or 2 major debtors in our government contracts. We've got some government contracts that are very prompt payers as well. So this is not a complaint against the government or anything like that, but we are having to do a lot of running to get some long term -- there's no dispute in the debt. It's not a case that it won't be. It's not won't pay, it's can't pay or whatever at the moment for whatever reasons that they give. And that -- if we could get that just back to normalized, then we would be in an even better position in terms of liquidity. Thank you.

Sameer, you can go ahead with your questions. [ Joyce ], you can ask your question, [ Joyce ].

Congratulations on the good set of numbers. So I have a very quick follow-up question on the margins. One of the measures that we all are looking at is the inflation trend. So by the nature of our business, you are very much exposed to the inflation pressures because you're buying most of the goods on a regular basis. But at the same time, we are seeing the business model -- or the revenue model is on a fixed price basis. The -- your room rental or your -- the price that we charge for the MOH contract. So my question is, how will you be able to fight these pressures over the next couple of years if we are seeing the inflation [indiscernible] for the next couple of years? And what's the extent of pressure that we are seeing in the EBITDA margins?

So I think the 2 of us will answer this question in -- as a tag team, and I'll go first, which is, yes, we cannot ignore the fact that there is inflationary pressure. And it's global news. It's in the whole -- it's in the global supply chain. It's in shortages. Some of it is temporary. I think that is one important thing to note. But like a lot of these things, when something goes up, it takes a lot longer to go down again. But we counter this in a few ways. One, you've already covered. In our cyclical contracts, we are able to change our pricing accordingly. The -- in principle, in Duqm, we are in control of what we charge. And whilst we always fight to keep the price the same, we haven't changed the price. Even the money we threw at keeping people safe in the pandemic, we didn't pass on to customers. We felt it was right for projects. Now whilst we have stood by those projects and kept their prices the same, not all the project people have come to stay with us, as we've just discussed at some length. But the -- so there's -- pricing is one issue. There's also efficiency. And I know in the Chairman's segment, there's a couple of sort of taglines that we put into our Renaissance 2.0 where we talk about operational optimization or excellence being about profit today; and innovation, optimization, excellence being about profit tomorrow. And across the company, a tremendous number of efforts going into all of these things. Our whole green agenda is not only the right thing to do, it's the most efficient thing to do as well in most cases. Some things are cost neutral, some that may be a little costly. But overall, if these things drive down costs, our whole safety thoughts is about the right way of doing things. So we've brought a lot of efficiency into the business. At the same time, we've seen this inflationary pressure come in. And so the unfortunate thing is that efficiency is being used to counterweight inflation rather than to drive additional value into performance. But so far, we are feeling that we're managing this inflationary pressure as well as can be expected. There has -- it has come into our performance in the last quarter or so. But we're taking other steps that account to weighting it as best we can. Vishal?

[ Joyce ], this is a very good question and a relevant question. So inflation is there for all the businesses, not for us as well. So the point is how we can manage it. And this, our innovation, cost optimization and operational optimization, all these we rolled out over the last 3-year period. So when inflation came in, we were ready, we were prepared to really do and handle it well. And that's the reason whatever tenders we have participated, whether it is MEDC we discussed earlier, whether it is MOH, considering all the innovation, automation, our buying power, we have changed how we buy stuff, we were still able to offer to our customers a very good pricing considering what's happening in the market. And that's the reason you are seeing that our winning rate has been good. So the -- what we have done, we have used this inflation in our advantage because many of the contractors, many of the suppliers and service providers who were not ready or prepared well, we can see that their prices have just gone up and become very uncompetitive. But because we were ready or prepared slightly better, we were ready -- we were able to offer to our customers a good price. So if the inflation was not there, whether our margin could have been better in this year, the answer is yes, but not to a great extent because all the optimization we have done has really kept it there. But inflation is there. And as Steve mentioned, that in the cyclical tendering opportunity, we always see that -- how we take care of customers and how we take care of ourselves as well. In terms of Duqm, we have more flexibility. So because it is not a prescribed contract, so you can have a very open dialogue with your customer. Say that cost has gone up, so how we can change into the menu engineering, offering the same nutritious food, same quality? But then there is a dialogue and we provide various flexible options. So all these things really worked out well for us, and we were able to have absorbed some of these inflationary pressure. And that you can see in our margins that we are still able to hold our margin. Next year, of course, like as months pass, there is inflationary pressure coming in. But then most of it or half of it we are seeing the temporary, what Steve mentioned. So that will ease out. And some of those permanent stuff, we will be able to handle through our rollout programs and in dialogue with our customers. And some of customers were very like fair. They understood. When you speak to them, they are ready to understand and they are ready to absorb or share some of those costs. So we were okay this year. We are putting our business plan together. This is the time of the business plan. And we are seeing that some of those costs, how we are going to handle it, and it is good to know that we are in a position to handle most of those inflationary pressure based on our program.

And if I can add to that, [ Joyce ], that the -- this year has been a particularly busy year for most of our cyclical tenders to come around. Some are 3 years, some are 5 years, some are 2 year, 1 year. And sometimes all the planets line up in the same year, and this has been one of them. So we've had a really good opportunity to recalibrate a lot of these costs. We announced the material ones. That's why we did announce the Ministry of Health. There are some others that are important. They're reasonable size, but they're not necessarily material. Oman LNG has come back to us with another 4-year contract with higher water. There's a number of things, smaller port services, a range of valued clients where we've had to go out to competition. They have quite likely, particularly the government-owned enterprises, et cetera, have a requirement to go and test the market. We fully respect that. And we've also seen a lot of client satisfaction coming through where if we have not been the lowest bidder, there has been a real technical evaluation of justification, which, of course, these things are auditable and need to be -- to stand up to scrutiny. And we've had a very successful run. Literally 100% of what we've had to defend this year, we've kept. There are 2 exceptions, not that we've lost them. The MOH one we described is pending. We got an extension while they review their options. And there's a military one that I can't talk about in detail that, again, we got into lowest bid. But because they don't want to contemplate rising prices, they're thinking of running the process again. But it's going to be a case of asking the same question and getting the same answer. Thank you.

Great. Great. And so small question that I have is the 12,000 occupants -- or rooms occupied -- beds occupied. Is it as of September or as of now?

So it's 12,000 at the moment. I want to say that in that 12,000, we've just had a very successful period with friends from the U.K. military working with the Omani forces on the operation Khanjar Exercise. And so there are about 643 left there today, and they'll be going in the next -- over the next 10 days. So we'll see a tail-off, a drop-off of those 643, but we do have sort of a trickle coming in of the sort of remobilizing down there. So we're seeing 12,000 as a guiding number until there's some real movement on the issues we talked about earlier on.

Okay. That is just to confirm if there was any movement during the last 45 days.

Sameer, go ahead with your questions, please.

I have a couple of follow-up questions. First on -- you mentioned about Abu Dhabi and Saudi projects, which you are looking for. Can we know how big is the size? Will it make a major change to the needle or it's like a smaller one like you took in the based management like a smaller and gradually ramping up? So how big are these projects?

Okay. The Saudi one is an expression of interest that does not have detail around it, and the -- there's a degree of commercial occupancy there. So we would need to, unlike Duqm where we can take commercial risk judgments on our home turf, we need to see what sort of guaranteed levels of occupancy for us to do that in a neighborly country. In the Abu Dhabi example, it is actually more active. It's the actual prequal is on and full space. It involves about 10,000 people. So if you take our current full pack footprint, it's 7,500 and Duqm is 12,000. This is 10,000. Again, there's an option for them to split it into 2 awards of 5,000. But it's sizable, and it's offshore and it's 100% guaranteed. So I've got some really nice features that speak to our real [ USP ] capabilities in this space. Of course, we're an Omani company coming into UAE, but we've been invited. We were approached by them for this. It's an ADNOC project. Doesn't mean we'll win. I think it's always tougher to win. We have -- of course, we have our subsidiary in the UAE, but it's not to that scale. It's not doing this at this point in time, but we have that there. We would definitely be looking at co-investors. They want -- and this is what they would want. They want some -- we've got co-investors with us here in Duqm who are willing to come with us. And we've got likely co-investors talking they'd like to join us if we're successful over there. So we wouldn't do 100% of the investment ourselves. It would be similar to the Duqm model. And we would operate at 100% ourselves. It's early days. And it would be wrong of us to, in any way, give the impression that we are in a great position and we can -- we're in the fortunate position that we've been approached to prequalify. It's very interesting. It's in our space. Whether we as an Omani entity can convert that into a win or into being and getting into the bid and having a real [indiscernible] remains to be seen, but these opportunities are arising in the region, and it's very nice to see that potential clients are seeking us out and asking us to come and compete. That's it, and don't read more into it than that. It's just a great opportunity, and we're pursuing it.

Totally understood. And great to know that, Steve. And so in case like -- so can we expect a margin similar to PDO? Or would it be like a Duqm kind of margin for the Abu Dhabi venture?

I think this is very much in the PDO range. It's got a guaranteed occupancy, so it's going to be very bankable. It's really interesting. It's offshore, offshore islands, where they need to actually go up similar to our Duqm project to get the numbers on smaller pieces of land. But yes, I would compare it at the moment, just in prequal, we need to get RFP and see the entire scope. But it's that sort of a high-end standard, really looking for what we do on the senior side, single room side of Duqm, that kind of standard that they want there. And that's what's attracted them to us, and we're in the frame.

That's really helpful. And one more clarity I needed is on the bed number you mentioned on the Duqm. So you said in the current capacity, it stands at 18,600 and not 22,500. Is that correct?

Yes. So it's difficult to get this across, Sameer. If let's say we have 1 room in Duqm and it has the flexibility to be used as a 6 people shared room or a 5 or a 4 or a 3 or a 2 or converted with a single and that we've got a store with all the right furniture to move out and change the capacity of that room, and we said -- you said, what's your total capacity? We said it's 6. And then a single person books that room for the next 3 years for their project, our capacity would now be one. And so that's what's happened but on multiple rooms. So if every single bed capacity was occupied, they happen to want the footprint that we've got of singles and doubles and 6s and so on, we'd be at 22,500. Once some of those rooms have gone for lesser occupancy than their full capacity, the remaining capacity comes down. And that's why those same 22,500 space is currently the capacity of 18,600 across exactly the same space because of those -- the actual demographic of rooms taken. I don't know if that gets it across.

Yes, yes. Totally understood. But I'm just trying to...

Sameer, just I want to add on. When the number of beds changes, then also the charge rate changes. So for example, when there is a 4 in a room or 2 in a room, the charge rate will be different. So overall, in terms of the revenue and bottom line, it doesn't deviate too much. It doesn't differ too much. So let's say if 8 in a room is more and on the other side, 6 in a room is more, in 1 particular month, revenue will be same. Because 6 in a room, the charge rate will be higher. In 8 in a room, the charge rate will be lower. Some minor adjustments happen. And -- but overall, the way this PAC program or Duqm program is done, overall top line and particularly bottom line, almost stays within the range, Sameer, irrespective of whether it is 18,000 or 22,000. If anyone has any questions, please raise your hands. Otherwise, we are almost at the end of our Q&A session. So we don't have any further questions, Steve. We can wrap it up.

First, as always, thank you to all of you. I think the questions were spot on as always to keep us on our toes, and I'm sure that's why there are no questions to follow up because other people may have had the same questions lined up. And the -- it's been a positive quarter for us. The challenge does still lie on this Duqm occupancy issue, and we're working day and night to resolve that. And we've got huge support from our Board getting involved. We've got co-investors getting involved like Royal Court Affairs and Ministry of Defense Pension Funds. So we do hope to bring you better news on that as we go forward, and it will not be for the lack of trying. Again, thank you all for your interest and giving us your time today. We look forward at the end of the next quarter where it will be the year-end results, and we can share this time again. Thank you very much, indeed. Bye-bye.

Thank you, everyone.