Widam Food Company Q.P.S.C. (WDAM) Earnings Call Transcript & Summary

Good afternoon, and welcome to Widam Foods. Please be advised that this call is being recorded. [Operator Instructions] I'd now like to hand the call over to the moderator, Roy Thomas. Please go ahead.

Thanks, Calvin. Hello, everyone. This is Roy Thomas from QNB Financial Services. I want to welcome everyone to Widam Food Company's First Quarter 2025 Financial Results Conference Call. On this call from Widam Food Company, we have Yasin Ibrahim, the Finance Manager. We will conduct this conference call with Yasin first reviewing the company's results followed by Q&A. I will turn the call now over to Yasin. Go ahead.

Thanks, Roy, for the introduction. First of all, thank you, everyone, for attending the conference call. I would like to inform you that Widam reported a net loss of QAR 10.3 million in Q1 2025 compared to a net profit of QAR 10.5 million in Q1 2024. A significant factor behind this change, the reduction in revenue of our international business and reduced margin in domestic products. Another factor contributing to the loss incurred is the expected credit losses provisions taken during the year. These provisions are required by the international accounting standards depending on the hedging of receivables. However, the company is working effectively to collect these receivables, and that is in line with the other provisions that we are making. Now let me provide further details on our revenue. Domestic sales has declined by 16% compared to last year. Also, the drop has been witnessed in gross margin due to lower demand in competitive market. Operational costs reduced by 13% compared to same period last year. Despite facing severe competition from smaller market players impacting our margins in certain segments, Widam continues to look for ways to improve its processes to maintain its market share and competitiveness. B2B segment, which is mainly HORECA industry, traders, retailers and wholesalers were overall underperforming in this period, witnessing a decline in revenue by 23% and B2C segment, mainly home delivery and butcheries, saw an overall 7% decrease in revenues. We continue to explore new butchery locations, ensuring that we perform appropriate research and due diligence to achieve growth in revenue and margins. Now going back to the other income, the total amounting to QAR 9.7 million, of which QAR 9.2 million is related to the reimbursement of cost by the State of Qatar for services provided to date on the slaughter houses. And then cost of sales, Widam has been collaborating with suppliers and expanding our partnership with foreign suppliers to secure a steady supply of high-quality production at competitive prices. We are consistently working on this to improve our margins and the good quality meat. The next, G&A expenses, we have witnessed a 19% decrease in G&A expenses, primarily due to an ECL provision of receivables based on accounting standards. We are continuously managing our cost, maintaining them at reasonable level or reducing them where possible. Now let's talk about the opportunities and challenges for 2025. The domestic market has been challenging over the last 2 years due to increased competition. However, Widam is continuously working on strategies to achieve growth in market share, revenue and margins. Widam has announced the receipt of a letter from the government awarding the company QAR 38.4 million as a compensation for the costs incurred by the company for services extended to the government for the year 2025 on the slaughter houses. Additionally, the company announced winning a tender to support the red meat for the month of Ramadan and Eid Al-Adha for three years, which includes the national initiative, Mubadara, to encourage local production and consumption. That was all about on profit and loss side. On the balance sheet side, there is not much movement, but mainly there is an increase in the cash and bank balances, which is mainly due to we have received QAR 38.4 million from government in the month of Feb in the first quarter, and that is related to 2025 full year. At this point, that's all I have for you. Please feel free to ask any questions you may have. Thank you.

[Operator Instructions] There are no present questions at this time. I would now like to turn the call back over to Roy Thomas. Please go ahead.

If there are no questions, we'd like to thank Yasin for the Widam Food Company's results update. And we look forward to speaking to you all for the second quarter 2025 results conference call. Thank you.

Thank you, everyone. Thanks, Roy.

This concludes today's conference call. You may now disconnect.