Sharqiyah Desalination Company SAOG (SHRQ) Earnings Call Transcript & Summary

[Audio Gap] January 2007. The initial project was COD on 8th of October 2009. Company was listed on Muscat Stock Exchange 30th June 2013. The initial share capital and distribution of bonus share was on 16th December 2014. The commercial COD confirmed by OPWP was 7 Feb 2017. Solar COD -- solar farm COD was on 16th April 2023. The company overview pre-IPO and post-IPO. The post-IPO detail is Veolia Middle East is holding 35.75% of the shares. Middle East investment is 29.25%. Public is holding 20.53% of the shares. Pension fund is holding 14.47% of the shareholder. Then the company overview in local activities. The company is committed to full compliance with the -- with all the aspects of Oman regulations. This includes, but not limited to, the royal degree related to the employment Omanization and to allocate the portion of the awarded contract to the Oman content. The number one is capital invested, maximum capital is invested locally. Procurement, mostly procurement is from the locals. Number three is the human resource; identify, recruit, train and develop the local talent and the local development through the CSR of the company. This is the message of social responsibility manager of Sharqiyah Desalination. The CSR is not -- it is more than the regulatory requirement. It's required a general commitment to the well-being of the community. The company reforms its commitment to actively contributing to the community development by delivering the sustainability; social, economic and environmental initiatives -- initiative projects aligned with the Vision Oman 2040. In 2025, we are committed to adopting the best practices to achieve the sustainability and protect the environment while strengthening our community role through the activations of various consultation and the community programs. These efforts aims to enhance the quality of the company's social responsibility strategy output, which represents the fundamental pillar of the growth of the business. The company also aims to empower the social responsibility program to assume a leading role in the field of community development program through the sustainable initiative for the better future because today good is tomorrow hope. Following our -- the main activities initiatives taken in 2025, school bags with the collaboration of Ministry of Education, TV screens was installed in school with the Ministry of Education, orphan support on Eid Al Fitr, lower income support on Aid Al Adha, blood donation campaign with Ministry of Health, Ramadan Iftar Program, Environmental Authority Sur, Al Mazar projects. At the same time, we have the Tamkeen programs aim to empower local and train the young people to qualify and integrate into the labor market. It enhanced the self-confidence to serve the support jobs, which has been priority of the government and facing national policies. Tamkeen program's beneficiary for the year 2025 was total 27, electrician and mechanic was 6, HEC was 6, administrative are 5, operators and laboratory assistance were 10. The operational highlights. In 2025, the plant produced 24.9 million cubic meter of drinking water with 52% of average load and a 97% availability rate. The water quality was maintained 100% compliance with the strict maintenance protocol. The plant achieved an average specific energy consumption of 3.32 indicating the effort -- optimistic energy usage. Overall plant exceptional performance, maintenance practices and collaborations contributed to the success of the reliable providers of the high-quality drinking water in the Sharqiyah region. The outlook of 2026, SDC is decided to fulfilling its commitment to OPWP and the people of Sharqiyah by ensuring the reliable supply of drinking water to meet the region increasing demand. In addition, the company is proactively reviewing the energy optimization strategies with a focus on enhancing the sustainability over the next decade. This forward-thinking approach reflects SDC commitment to the both environmental stewardship and the social responsibility, ensuring that it can continue to be support of the community while minimizing the ecological impact. Furthermore, SDC aim is to and empower the choice of the Sharqiyah region demonstrated its commitment to the local community. By valuing its employee and streaming to create a positive work environment, SDC is likely to attract and retain the top talent, which ultimately benefited the company and the wider community. It is important to acknowledge the support of the community of Sur shareholders, partners and the employees in SDC efforts. Collaborations and cooperations are the key achieving long-term success and encouraging to see the SDC recognitions and the SDC [indiscernible] the support it received. Overall, SDC committed to meeting the water demand, prioritizing sustainability and being a responsible employee in the commandable. By staying dedicated to these goals, SDC can continue to contribute a positive to the Sharqiyah region and its community. As approved and recommended by the Board of Directors to the shareholders for the upcoming Annual General Meeting will be held on 17th March 2026. The company will pay a cash dividend of OMR 15 per share amounting of OMR 1.467 million for the year 2025. 15% of the share capital to the shareholders registered with Muscat [indiscernible] on 17th March 2026. Here are the financial highlights for the year 2025. The revenue was OMR 10.8 million compared to OMR 12.6 million for the same period of last year, 1st January to 31st of December decreased by 14%, which is [ OMR 81.8 million. ] This is mainly due to lower water output demand from the customer OPWP and higher amortization for the year resulting the decrease in the finance income P&L impact only linked to the reduction in the outstanding finance lease balance as per the finance lease models. The cost of sales also decreased by OMR 1.46 million, mainly due to the reduction in the water output and electricity cost. The G&A expenses are lower by OMR 53,000 in linked with the decrease in professional fee advertising and sponsor fee. The finance charges are lower by OMR 250,000 mainly due to the repayment of the loan. Here is the highlights for the cash flow. Dividend paid for 2024 was OMR 1.467 million. The loan repayment for June and December was OMR 3.4 million. Interest and [indiscernible] paid during June and December was OMR 1.9 million. The DSE requirement is at OMR 1.25. The internal control and the corporate governance. The management of the company believes in a strong internal control overseen by the internal auditor in compliance with the regulations prescribed by the Financial Services Authority and the International Protocol Practices framework. The company has in place a high standard of corporate governance, which are compliant with the code of corporate governance, compliant with Financial Services Authority. This is all about our presentation. Any questions, please? Any question, anybody? Any question, please? Thank you for joining our Muscat discussion session.