The National Detergent Company SAOG (NDTI) Earnings Call Transcript & Summary

Good morning, everyone. Good morning. My name is Deepak Jain. And on behalf of the NDC, I would like to welcome all the participants in the investor relations meeting for the second quarter ended 30th June. I would like to present financials for the period of -- period ended 30th June 2025, okay? So I'll just put my presentation. I hope it is visible. Okay. So first of all, I would like to give the contents what I'm going to present in this presentation. First is the brief about the company's history, then NDC verticals, what are the NDC is having the verticals, overview of the financial results of the company and the future plan of NDC. First, a brief about the company. The National Detergents Company is one of the leading manufacturing FMCG company in the Sultanate Oman. NDC manufacturers and distribute a wide range of highly reputed and successful brand covering various segments such as detergent powder, liquid detergent and soap, shampoos, household cleaning product, specialty chemicals for oil and gas and water treatment industry and commodity chemicals. NDC started its manufacturing and marketing soap in 1981. It exports the range of products of -- to all the GCC countries and markets in other Arab and African countries. NDC beliefs in giving the best value for money to its consumers and customers. Over the years, this philosophy has helped the company to build an expanding customer base and strong brand equity. The company has a well-equipped and full-fledged research and development division which is constantly monitoring all existing and new products in the marketplace. It keeps track of technical development in the industry and respond with the appropriate improvement wherever necessary. NDC was the first ISO 9000 certified company and detergent company in the region and was recertified as ISO 9001 in year 2000 and ISO 9001 2008 and year 2005. NDC has 2 verticals primarily, which we call Consumer Product division, which we call as CPD, where the company product division is engaged in the manufacturing, marketing and distribution of detergent products, liquid detergents, hand wash liquids, toilet soap, fabric care, personal care products, hygiene care products and other industrial and household cleaning products. The company distributes its products both directly and through a network of distributors developed over longer terms in local and export markets. Overall, detergent powder sales account for a major portion of the company's business revenue. Second division is AquaPetro Chemicals, which we call APC. The APC division is involved in the manufacturing and trading of specialty and commodity chemicals for oil and gas, construction and water treatment industries. I'll give the overview of the financial position as on 30th June 2025. The company's revenue, which including both the verticals was OMR 13.2 million, over OMR 12.4 million of the last year same period, with a growth of 6% over last year. Out of that Consumer Product division's revenue was higher by 7%. In terms of the direct cost, company in spite of the lot of fluctuations in the metal prices and conversion costs, company could maintain its direct cost at 65% over revenue, which was comparable with the last year of 65%. So in spite of that, the company maintained direct cost at the same level. The gross profit margin also 35% in the current period compared to the last year of the same period is 35%. And in terms of absolute value, the gross profit for the period stands to OMR 4.59 million against OMR 4.4 million of the last year. The growth of 4% in terms of absolute value. Other income was OMR 20,000 for this period and last year were OMR 14,000. So total net income for the company for the first half of the year was OMR 4.61 million against OMR 4.41 million of the last year, there's a growth of 4%. Company could manage its general and admin overheads at the same level, 6%, although there is an increase in this absolute value, which includes the inflation and other things. So that is -- but in terms of percentage to revenue, it is 6% this year as well as last year, 6%. There is an increase of 2% in the selling and distribution expenses. So selling and distribution has gone to 23% of revenue against last year of 21%, which is mainly because of maintaining the higher volume during the current period, as well company has launched certain new products, so company had to spend on listing fee other expenses. So there is increase in selling and distribution expenses by 2%. Financial charges in terms of absolute value, it has gone up. However, company managed to maintain at 1% level. There is an increase in the borrowing cost due to increase in our inventory and receivables. So there's an increase in the borrowing, so there was the increase in the borrowing costs. Profit before tax was OMR 557,000 against OMR 891,000, although there is a degrowth in the profitability. In terms of percentage to revenue, it was 4%. So mainly 2% came down due to increase in selling and distribution expenses and 1% in the other expenses and which was 7% last year. Net profit for the year after tax was OMR 473,000, which is 4% over revenue against 6% of the last year. So there is a degrowth of 2% in the profit, which is mainly increase in our selling and distribution expenses. However, the company has maintained all other expenses at par with the last year. Coming to this balance sheet. So property and plant equipment was OMR 17 million, OMR 17.5 million against OMR 17.4 million of the last year. So it is more same level. Right-of-use assets is 2.1 against 2.2, which is mainly this leasehold land, which we have in Sohar and Rusayl area. So that is mainly -- is in the part of this right-of-use assets. Inventory is maintenance OMR 5.9 million against OMR 5.6 million, which has gone up because we are having the higher volume during this year. So we had to maintain the higher inventory in line with the sales and production plant. Receivables has gone to 7.5%, which is again due to increase in the sales. And there is a little slow process in local market for collection. However, there is no risk on our receivables part. And investment is OMR 101,000. This company had deployed in this investment of OMR 101,000. And total bank balance, OMR 883,000 against OMR 910,000 of the last year. So total assets for the period was -- as on 30th June was OMR 34.1 million against OMR 32.7 million. So there is an increase by OMR 1.3 million. Coming to equity part, there is no change in the equity except the retained earning, which changed in retained earnings. The last year profit, minus dividend, which was distributed plus the profit for the period, so which there's a difference of minus OMR 526,000 because of the profit OMR 500,000 come and OMR 1 million we paid the dividend, so net difference is OMR 526,000, which is absorbed in the retained earning part. Coming to noncurrent liabilities, so which is around OMR 4.9 million against OMR 4.9 million. So there is no change in this thing, which includes our lease liabilities, employed end of service benefit and deferred tax liabilities. Coming to current liabilities. Mainly this trade receivable has gone up to OMR 6.9 million. As I explained, this is at par with our increase in our volume, and plus some slow collections are there, but they noticed, so company will collect its -- all the receivables from the market. Bank borrowing has gone up to OMR 4.9 million against OMR 3.5 million of the last year. So as I explained that there's an increase of OMR 1.4 million, so OMR 1 million is mainly where we use for dividend payment, and OMR 400,000 because the increase in the inventory plus receivables minus trade payables, so which brings down to OMR 400,000. So there is a net increase of OMR 1.4 million. So total liabilities is OMR 17 million against OMR 15 million of the last year. The future plan of the company. Despite the challenge -- this is the factual thing, despite the challenge the company product division has recorded higher value sales compared to the previous year. The company has been able to maintain the volume market share of the Bahar in many key markets in GCC. NDC is primarily focusing on revenue growth, increasing efficiencies and better margins. The company has revamped its personal care portfolio and is launching new personal care products, along with other innovative fabric cleaning products, given the volatile global trade environment and company remain focused on optimizing costs and enhancing operational efficiency to sustain profitability and businesses resilience. The company is working towards keeping the growth momentum and cost control for second half of the year as well. However, the second half could be challenging for the business due to increase in input cost and any further disruption in the supply chain would lead to further increase in the cost. Additionally, uncertainty persists around the potential imposition of the further tariff in the certain countries, however the company is making all efforts to maintain and minimize the impact of the adversities. So thank you. This is from my side. If anyone has any questions, I will try to answer those questions. So if there is no question, then can we close this meeting for the day? So thank you very much all the participants for joining this presentation on behalf to the National Detergents Company. And any further new things, we will inform to the shareholders in due time. And when we'll go for the next presentation, we'll give more detail about the company's performance in coming periods. Thank you very much.