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

Okay. [Foreign Language] I would like to welcome you all to this discussion sessions on the financial statement for the first half of 2025 for Port of Salalah. I am Mohammed Al Mashani, I'm the Chief Corporate Affairs Officer of Port of Salalah. I have Bart Van Graaf, he is the CFO -- just a minute. Anyone? Can you guys hear me?

Yes, we can. We can.

Okay. Again, I have Bart, he is the -- our CFO; also Iman Jaboob, our Communication Manager; and Eman Al Shahry, our Legal Counselor. Our -- the presentation will be divided in 2 sessions. The first one, I will give an overview of Port of Salalah, and then I will have Bart to go into details of our financial statements. For the overview, Port of Salalah, we started in 1998 as the name Port of Salalah. We are a public listed company in MSX. We are the largest employer of -- in Dhofar region with more than 2,500 direct employees. Basically Port of Salalah, 2 terminals, the container terminal as well as the general cargo terminal. We have more than around 27 STS cranes in the container terminal with a capacity of 6 million. Now the slide will be updated later on. Now we have just been upgraded our facility to cater to 6 million TEUs. We just finished in February this year. And the container terminal, they have more than 14 berths with general cargo from livestock to dhows, gypsum, limestone and others. If we go into the -- our -- can you go back, Iman, to the previous slide? Previous slide, Iman. Anyway, if we look into our shareholders, as I mentioned, we are a public listed company. So we have 30% APM Terminals. APM Terminals manages more than 60 ports around the world and it exists in more than 40 countries. The second most shareholder is the SPF with around 23%, followed by Asyad, 20%. And the rest is a small, like 19% is institutional investors and 8% like local companies. Go by -- next, Iman? Next, Iman. Okay. If we look into our vision, we look into ourselves. Our new vision is just not a port. We are advancing supply chain in Oman and beyond. We are a hub and we would like to see ourselves as a hub for the export of the Omani goods to the East Africa to South continent and Europe, and that is what we are doing. Our mission, we enhance efficiency. We are the second most efficient port in the world for 3 years in a row. Connectivity, we have more than 50 direct calls from Port of Salalah container terminal. Value, we are going -- we are -- our ambition is to give a good value for our customers. And on sustainability for all, we just recently, this year, established our first ESG report. Next, Iman. Port of Salalah plays a vital role in global supply chains because of 6 reasons, I would say. The first one is our strategic location close to the main shipping lane, advanced infrastructure. We have the largest tank cranes in the world. We just bought them recently with high capacity in both general cargo and also the container terminal. As I mentioned, the container terminal now the capacity is 6 million TEUs. We are a major transshipment center for the big market like Africa, subcontinent and also Europe and Asia. We support the local and international industries, but we have an adjacent free zone, where a lot of factories, they depend on us on getting into their target markets. And we are also boosting intra-regional trade by either sea, air or transport or land, and we have a lot of product to cater for that. With this now, I will hand over to Bart to go through the financial performance. Bart?

Thank you, Mohammed. So if we start by looking at the revenue, right, we saw a strong increase, 21%, and this was driven by growth on both sides of our business. So on the CT side, we had a 21% increase, right? More volumes came through due to the upgrade. And on the general cargo, we continue to see double-digit growth. So there we saw 11%. And on top of that, we had increased tariffs from Maersk. So that gave us a 21% growth on the top line. If we look at our operating cost, there, we saw a significant increase versus last year, 18%. And of course, it's driven by volumes and the increased cost related to the upgrade that we finalized in the first quarter of the year. So increased depreciation cost. We kept our SG&A flat, a small 2% increase due to inflation, which led to a profit of OMR 2.5 million. In Q1, we were roughly at breakeven because in Q1, we had increased cost due to the upgrade, but we didn't profit yet from the increased volumes. So now we see volumes come in, and we have a year-to-date profit of OMR 2.5 million, which is basically the profit of Q2. So this leads to, of course, improved margins. So all our margins are improving, basically as we had forecasted. And then our EBITDA margin is currently around 30%. So overall, a strong performance, knowing that also our volumes are significantly impacted by the Red Sea. So we had hoped for stronger volumes. But due to the Red Sea, it's relatively slow. So that was a quick update on our financial performance. Thank you, Mohammed.

Thank you, Bart. Yes. Now we'll go for Q&A if you guys -- please state your name and which company you are coming from. So anyone wants to start? Any questions? Can you unmute them, Iman, if they are on mute. Any questions? Okay. If no more questions, with that, we thank you for joining us. And we hope to see you at another discussion session. Thank you, guys.