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

Good afternoon, guys. Welcome to this session on our financial results for the first half of 2026. My name is Mohammed Al Mashani. I'm the Chief Corporate Affairs Officer and also the Remuneration Officer as well. We have Steven Yoogalingam, our CEO; and also, we have Farooq Zuberi, our CFO. We have also Ahmed Qatan, our CCO, as well as Laith and Iman from our team. The agenda will be I will give a brief presentation or a brief profile about Port of Salalah. That will take a few minutes. And then, I will hand over to Farooq to give us the financial results. After that, we will have a Q&A session. So with that, I will just -- can you mute yourself, people, because we have some echoes here if you can do that? Okay. So we'll start about the profile about Port of Salalah. We are still -- can you guys mute your mic, please? Okay. If we look into our profile, we are the largest employer in Dhofar as Port of Salalah. As you know that Port of Salalah is mainly 2 terminals, General Cargo Terminal as well as Container Terminal. We are the largest, as I mentioned, employer in Dhofar. We have around 3,000 employees at the moment. We started our operations in 1998, and we are doing this session because we are a public listed company, traded in Muscat Securities. In the Container Terminal, we have 26 STS cranes that has the capacity of 6 million TEUs, as well as 6 berths. And in the General Cargo Terminal, we have 14 berths with the capacity of around 35 million tonnes. We have a 30-year concession agreement with the Government of Oman. Next, Iman, if you just go to the next slide. This is about our vision and strategy. Our vision is more than a port. We advance supply chain in Oman and beyond. And this is our core business, what we do, and this is also currently is very good, is witnessing that. Our mission is to enhance efficiency. We are the third most efficient port in the world. This is done by the UN. The result just came, I think, a few months back. Connectivity, we connect Oman to the world, and we have a very wide connectivity. We can reach anywhere within 2 to 3 weeks. We give value to our customers as well as sustainability, where we also issued our ESG report for the last 2 years. If we look into our strategy is to grow through the adoption of technology. We have the latest technology we are adopting. And we recently just signed an agreement with Omantel to provide the first private 5G in Oman with Omantel. Customer focus, we do focus on customers, and we take care of them. Business growth through supply chain and logistics activities and through the Salalah ecosystem development, working with the Salalah Free Zone as well as the airport and Al Mazunah Free Zone as well as other logistics providers in Oman. People ask us, we became a center of excellence. And I think if you guys read the news, yesterday, we launched our first Oman pilot training in Salalah that will start in Salalah, and then, we will -- it will also go to the other ports in Oman. As well as cost discipline, as any other company, we take care of costs, and also, that will maybe Farooq will explain in more details. Next, Iman. With that, I will hand over now to Farooq for the financial performance. Farooq? Next, Iman.

Yes. Thank you, Mohammed. So in terms of our financial performance, on revenue for the first 6 months of 2026, we have a revenue of OMR 50.7 million. This is higher than what we had in 2025 for the first 6 months, where the revenue was OMR 42.4 million. So this represents a top line growth of 20%. And this growth is driven by a surge in volumes, which we saw in both our Container as well as General Cargo segment. So on the Container side, we saw volumes grow by 15%, driven by higher number of vessel calls. On the General Cargo side, we saw a growth of 9%, and we handled more cargo tonnage driven by our dry bulk cargo. On the cost side, for 2026, we had a cost of OMR 50.4 million, and this was 26% higher than the cost of 2025. There are, of course, a few big drivers of this cost increase. First and foremost is our fuel cost increase, which grew by 72%, and it was driven by the increase in fuel rates, which has gone up by 40% and also by higher fuel consumption, as we were handling more volumes, so there was more equipment running hours. We also had a one-off cost of repair and maintenance to repair one of our damaged cranes. And we also had a higher staff cost in 2026. We had to recruit additional 300 headcount to cater to the surge in growth in volumes that we saw. In terms of our profit, we are in the black. We had a profit of OMR 240,000 despite the increase in cost. And while first half of 2026 has been impacted by cost increases, we still continue to receive and handle a record number of cargo, both in the CT side and the GC side, and July and August have been very strong for us. I think this is a brief snapshot on the financial performance from my side. Thank you.

[Foreign Language], Farooq. Now, I think -- the next, Iman. We will go for Q&A.

But I would like you guys just to stay -- to focus more on the financial result, if you have any questions. So please, if you have any questions, just raise your hand, and then, we'll -- okay. [indiscernible]?

Yes. So regarding the one-off costs that you mentioned, Farooq, the maintenance and repair, obviously, it's quite big sum of money. Is there an expectation to recover some of that money through insurance? Do you have insurance coverage in place? And how much do you expect to recover from insurance if there is any?

Yes. So this is under process. Insurance, we are in discussions with the insurance company. And of course, this is ongoing. We don't have a conclusion of this case yet. This is open. And we are following the requirements of the insurance company. So this is ongoing.

Right. Do you think there -- because obviously, the impact for this cost being realized already in the financial statements. So if there's going to be reverse money back from the insurance, are we expecting that to be updated in your financial statements as well?

Yes. If we get that, then surely, yes.

Any other questions?