Salalah Port Services Company SAOG (SPSI) Earnings Call Transcript & Summary

Okay. I think it's 1:00. Let's start [Foreign Language]. I'm turning now to English. First of all, thank you for coming to our discussion session on the financial statements for 2024 for Salalah Port Services, Port of Salalah. I am Mohammed Al Mashani, the Chief Corporate Affairs Officer; and I have also Bart Van De Graaf, our CFO; also Eman Shahry, our legal adviser or Legal Counsel; also Iman Jaboob, our Corporate Communication Manager. The agenda, I will -- first of all, I will take around 5 minutes to discuss the overall view about Port of Salalah, and then I will hand over to Bart to discuss the financial figures. Iman, can you just -- okay next? This is like an overview of Port of Salalah. We are the largest employer in Dhofar. We have more than 2,600 employees. We have -- if you look into the shareholder profile, we have APM Terminals. They own 30% and APM Terminals is one of the largest port operators in the world. They are -- they manage more than 60 ports around the world, and they exist in more than 30 countries. We have the second -- we have also the Pension Funds, they have around 23%. Asyad 20%, and others. If you go to the next, Iman. Our vision is more than a port. We are not only handling containers, we are more than that, advancing supply chains in Oman and beyond. And our mission is to enhance efficiency, connectivity, value and sustainability for all our customers and all. Next, Iman. This is our strategy for the next 5 years until 2028. First of all, is to secure this concession in favorable terms and then grow through the adoption of technology and digitalization, customer focus, also business growth via supply chain and logistics activities, people and skills become a center of excellence for our people and also cost discipline. Next, Iman. This is like Port of Salalah. We play a vital role in global supply chain because we are strategically location near the shipping lanes. We are just nearby from the East to West. Also, we have an advanced infrastructure. We just got the largest cranes in the world last year. We have high capacity. We just upgraded our container terminal to handle now 6 million TEUs. We are a major transshipment center in the region. And also we support local and international industries by connecting them to their market. And also, we are boosting intra-regional trade through air, sea and also land. Next, Iman. As I mentioned -- Port of Salalah, just for your information, we are like a multiport. So we have a container terminal that is like in the red, that 1 to 4 and 5 and 6. That's our container terminal with a capacity of more than 6 million TEUs. And also, we are a general cargo terminal also handling various commodities ranging from dry bulk, grains, also livestocks. So we are a multipurpose terminal. Next, Iman. This is our growth in the general cargo terminal. Last year, we handled the highest 22.6 million tonnes of general cargo. And also next and you look into the container terminal, we handled -- next, Iman, we handled around 3.3 million. And we are in the hope -- and this is mainly because of the Red Sea issues and also we are upgrading our current container terminal. So now we are expecting '25 and more beyond that number to be like -- to rise again [Foreign Language]. Next, Iman. This is our services. We offer a lot of services ranging from Bunkering, Real Estate Leasing, Cruise Vessels Facility, Self-Operated Dhows, Tug and Pilot. So we are offering a multipurpose services to our customers. Next, Iman. This is our recognition. We are the largest exporter of gypsum in the world, and we are the second most efficient port in the world for 3 years in a row. And that is actually -- it's a good achievement. And hopefully, [Foreign Language], we will continue that this year and beyond. And also in terms of the best 100 container terminals, we are #45, and we are [Foreign Language] hoping to be more in the 30s in the next upcoming years [Foreign Language] after finishing our expansion project. Now I will hand over to Bart to go through the financial data or the financial performance. To you, Bart.

Thank you, Mohammed. So if we have a quick look at our financial performance in 2024, then we see that our revenue grew by 2%, and that was, of course, on the basis of a very strong General Cargo growth where we saw the dry bulk mostly grow with 10%. On the container side, we saw a drop in volumes. And as Mohammed said, it's really related to the ongoing upgrade where we had to take out our capacity as we're building our keys and then, of course, due to the Red Sea situation. If we look at our direct operating costs, there we see a slight increase of 1%, and this is really related to the GCT franchise fees, which increased and the depreciation of our new equipment, which we started to operate in '24. If we look at our other operating SG&A and other income, there, we saw a 9% increase. And there, we see the impact of our civil upgrade. So we started to use the new keys that we constructed, and therefore, we saw some additional depreciation coming. Overall, a net profit of OMR 2.3 million below last year, but I think a very good result in a challenging year due to the Red Sea situation due to our ongoing upgrade and due to the equipment challenges we had on the General Cargo side. So overall, I think a good performance in 2024. If we go to the next slide. If we look at some of our key ratios, if we look at the current ratio, quick ratio, cash ratio, yes, lower than last year as expected, but it shows that we still have a very strong balance sheet and the company is debt free. If you look at our profitability ratios, then yes, below last year, and that is due to the reasons I previously explained. So the loss of capacity, the Red Sea disruptions and the impact of the ongoing investments. So it was a quick highlight of our 2024 year. Thank you, Mohammed.

So, Bart -- and now we go to -- if you have questions please raise your hand and speak up. Any questions, Mukhtar, Peter or David? If no questions, then thank you, guys, and see you on our next discussion session [Foreign Language] after 6 months. Thank you, guys.

Thank you.

Thank you.