SMN Power Holding SAOG (SMNP) Earnings Call Transcript & Summary

Good morning, everyone. [Foreign Language] I hope you can all see us okay and hear us fine. If there are any issues, please let us know. If there are any issues with the audio, please let us know. So once again, I would like to welcome you to this interactive session to discuss the results for the first half of the year 2026 period starting from January to June 2026 for SMN Power Holding. Before I start, I would like to introduce myself, Abdullah Al Naimi, I'm the Chief Financial Officer of the company, also by [indiscernible] from the Finance Department. [indiscernible] session will be [indiscernible] start to provide a very quick overview of the operation performance for the 6 months period. And after that, we will give a very quick overview of the financial results for the period. And after that, we will give an overview of the dividend policy and progress and then finally a quick overview of the future outlook. [Foreign Language] So in terms of operational performance as you all know, the company has 2 Power plants and water plants. The [indiscernible] plants are located, Rusayl Industrial area and at Al Rusail Power Company. The other plant is Barka Power Grid. [indiscernible] also disclosed to the market and our Board of Directors [indiscernible] for 6 month period. We are delighted to confirm that we largely completed GT1 to GT6 dismantling process, which was a very complex process indeed. And we're glad to confirm that the process is now completed, achieving the best and highest HSE, Health, Safety, Environment standards. We have been working very closely with the buyer and also the relevant authorities to assure this project will give us very well, achieving all [indiscernible] and also environmental operation. So this has been already disclosed to the market, and we wanted to just to confirm as well. [Foreign Language]. Company, again, for the 6-month period, we would like to confirm that the company has achieved a good reliability performance disclosed to the market for both plants for SMN Barka Power and also for SMN Barka Water. And we are continuing to work closely with our partners, including the offtake and [indiscernible] to be sure that the various standards, requirements, et cetera, have been complied. [Foreign Language] So this a very quick overview of the operational performance of the company, including its plants for power SMN Barka and also the plants [indiscernible]. In terms of the financial results for the 6 months period from January to June 2026 and as disclosed to the market, the company has achieved an overall revenue of OMR 45 million for the 6 months period. In 2025 for the same period, the company achieved OMR 3 million. This significant increase in revenue is mainly attributable to the high dispatch, the high utilization of the plant in 2026. Similarly, the company has incurred a total direct cost of production of QAR 43 million in comparison to OMR 1.2 million for the same period in 2025. Again, this is for the same reason driven by the high dispatch utilization of the plant. Overall, in terms of the gross profit, the company generated OMR 2.2 million in comparison to OMR 2.1 million in 2025, keeping the gross profit more or less in line with the previous year. In terms of the net profit for the period, the company achieved OMR 844,000 net profit for the previous 6 month period in 2026 in comparison to OMR 1.4 million achieved for the same period in 2025. The key reason for this variance -- and as disclosed to the market, in relation to the team [indiscernible] ensure a claim. The claim has been made and was successful for the period, 6 months period in 2025, and that has account for the majority of the difference which in '26 [indiscernible] in 2025. [Foreign Language] [indiscernible] of the dividend policy and again as disclosed to the market, our dividend policy is based on that once the company fulfill all its application under the various agreements, including its agreement and provisions and CapEx requirements, then the company will then distribute all the remaining mailing surplus [indiscernible] dividend policy has already been disclosed to the market earlier this year this year. Now up until now, company has only distributed, OMR 1.5 million. So this OMR 1.5 million has been flowing from the subsidiaries from [indiscernible] and has Barka and had been distributed to the SMN Power Holding. And then once we meet the rest of the regulatory requirements, including the requirements of having a full audited account, the money will flow to the wider investors between now and the next 6 months period, additional dividends will also be disclosed. [Foreign Language]. In terms of the future outlook and as disclosed many times, overly, the company is clinically operating and PPA and [indiscernible] framework for both plants were set for SMN power and also for SMN Water Plants. These PPAs are long term in nature. The company has been awarded almost 6 years for [indiscernible] PPA extension and almost 9 years extension for SMN Power and also a similar period for SMN Water. The company is working also very closely with our partners, including the offtake of Oman Power and Water procurement company [indiscernible] electricity transmission company to ensure that the company continues to play a critical role in Oman, in the supply of power and water and the stability of the gate. The company will also work very closely to identify any future opportunities for extension given the demand and supply [Foreign Language]. So that basically brings the summary into a conclusion, and I leave the floor to you now for any questions. [Foreign Language] Of course, as we always mentioned, we are available for any queries any questions at any time. You don't have to wait for the interactive session.

We welcome any queries from our investors be it through emails or other means. So please do not hesitate to reach out to us should you have any queries or questions in the future. [indiscernible] will be also uploaded on MSX portal, so you can look into it any time. [Mr. Rao], yes?

I have a couple of questions. So what is the current demand in MIA system, total demand in MIA system.

The demand generally is growing. As you know, [indiscernible] have been very busy with launching a number of projects. I'm sure you're following the market. But the demand in general is growing. And I would like to refer you to OPWP 7-year statements for full details. OWP, [indiscernible] issue an annual 7-year statement, which has more details of the projection in Oman in terms of the demand -- upcoming demand for the next 7 years and the plan to fulfill this demand. But the bottom line is the demand from the market seems to be growing.

And the second question is what is the life of your plant? We have seen that the other [indiscernible] have got extension of 15 years, but you have got extension of 9 years. Can you tell what is the specific reason why you have got the extension for 9 years? Is it due to plant life or any reason? Can you please shed some light?

I can confirm that the extension is not related to the useful life of the plant. When the [indiscernible] was issued by the offtaker, it provides options and the maximum option was available at the time is 9 years, absolutely nothing to do with the life of the plant. The plant, useful life, as you have seen in the financial statements is stated in total until now, [indiscernible] has been utilized. So the plant will still have a good useful life for any potential extension beyond the existing PPA.