United Development Company Q.P.S.C. (UDCD) Earnings Call Transcript & Summary

Hello, and welcome to United Development Company. Please note that this call is being recorded. [Operator Instructions] I'd like to hand the call over now to our moderator, Dana Sowaidi. Please go ahead.

Hello, everyone. This is Dana Sowaidi from QNB Financial Services. I would like to welcome everyone to United Development Company's Second Quarter 2026 Financial Results Conference Call. On this call from management, we have Karim Farhat, Executive Director of Finance, IR Officer, who will conduct this conference call with management reviewing the company's results followed by a Q&A session. I will now turn the call over to Karim. Please go ahead.

Hello, everyone. In order to announce our results for the Q2 2026, I would like to note that our net profit attributable to shareholders stands at QAR 119 million, and our revenues do stand at QAR 885 million. Our revenues went down by 20% and our net profit went down by 19% to shareholders and to 16% -- by 16% for the whole period comprehensively. Major highlights that we have on our financial statements. Basically, we have reduced our common area -- sorry, our master community service charges going forward from QAR 3.5 per square meter to QAR 3 per square meter to accommodate for the recent political things that's going around the region. Other than that, there is just a slight reduction in our performance, and this is due to lesser sales that has been achieved during the period. This is a summary, and I leave it to others to -- for questions.

[Operator Instructions] So your first question comes from the line of Ejayan Ahbabi with Al Rayan Investment.

So I've been noticing some demolishing happening within different areas. Could you please give us some insight on what's happening exactly? And yes.

Yes, sure. The demolishing basically is for the Perlita project that we have announced earlier this year. This is a land that we have repossessed and it had some construction on it. We are demolishing the site and we are basically developing -- to develop on it our new announced development, which will be constituted of 150 villas in the same area. And those villas are being built for the purpose of sales.

What was the reason behind the repossession?

Well, the customer defaulted over the years. This has been hanging for some time now over 7, 8 years. And the purchaser was not able to complete the price of the land.

Will we see any impact on the financial statement anytime soon?

Well, on the revenue side, you will be seeing it in 2.5 years' time in a time schedule understanding. This is where we complete construction and start handing over the villa. This is the only impact that is there. The project is fully funded, and it is currently in -- we're finalizing the design stage and the award of the construction as well. And mind you, this is a few land that is remaining on the Pearl itself.

Okay. Okay. And no impairment for the demolishing?

No, no impairment. The demolishing is an immaterial cost compared to the size of the project.

[Operator Instructions] We have another question from Ejayan with Al Rayan Investment.

This is Zohaib from Al Rayan Investment. Could you give us some numbers or some sense of where the occupancies are for your different segments? And how is the pricing currently? Are you seeing any discounts being asked by clients because this year, because of the war, we have got less visitors? Or could you give us some sense of what is happening on the business front for these -- for your different segments?

Yes, sure. Well, as occupancies for the 6-month period, actually, they're improving weirdly enough. But yes, when it comes to retail, we have like around 5%, 6% improvement in our occupancies. Residential leasing, I mean, our occupancies as well have been increasing, and they've increased heavily accordingly. Mostly, people are shifting to the Pearl. As far as pricing is concerned, we did not revise our prices. We don't believe revising our prices at this stage would make any change or any difference. We have -- our products are in demand per se, and we've already revised our pricing a while ago. And for this whole situation in the region to unfold, I think we'll be revisiting that towards the end. But we're currently satisfied at our residential leasing. It stands around 80%. So we are not opting to reduce pricing to increase -- to see any significant increase. The only change that we are seeing is definitely softer sales. And from the product that we have on the market, sales have been -- showed a little bit of a slowdown, and it's understandably so. But yet again, we're not revising pricing in the near future. It's something that we will revisit in Q3 or Q4, depending on the outcome of the region and how this whole thing would unfold on all of us.