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

Hello, everyone, and welcome to Widam Conference Call. Please note that this call is being recorded. I'd now like to hand the call over to Dana, our QNB representative. Please go ahead.

Hello, everyone. This is Dana Al Sowaidi from QNB Financial Services. I would like to welcome everyone to Widam Food Company's Second Quarter 2026 Financial Results Conference Call. On this call from management, we have Yasin Ibrahim, Finance Manager. We will conduct this conference call with the management reviewing the company's results followed by a Q&A session. I will now turn the call over to Yasin. Please go ahead.

Thanks, Dana, for the introduction. Hi. Good morning, everyone, and thank you for joining today's conference call. I would like to inform that Widam recorded a net loss of QAR 56.9 million in half year 2026 compared to a net loss of QAR 108.6 million in the same period last year. There is a significant improvement in net margins despite a 31% year-on-year decline in revenue, reflecting the effectiveness of our margin management and cost discipline. Notably, we delivered an increase in gross material margin of QAR 14.9 million, underscoring our ability to adapt in a challenging operating environment. The domestic market continues to experience heightened competitive pressure, driven primarily by smaller market players offering aggressive pricing and by evolving consumer preferences. These dynamics have intensified price sensitivity across the sector. In parallel, rising livestock and material costs at origin influenced by regional supply volatility and geopolitical developments have added pressure across the value chain. Despite these unfavorable external factors, Widam remains focused on reinforcing its core operations, enhancing pricing discipline and pursuing targeted strategic initiatives aimed at restoring sustainable growth and improving profitability over the medium term. While domestic sales declined by approximately 31% across all revenue segments, it is encouraging to note that all segments delivered higher margins compared to the same period last year. This performance reflects proactive pricing strategies, tighter cost control, and operational efficiencies implemented across the business. In parallel, operating expenses were reduced by 28% year-on-year, contributing meaningful overall profitability improvement. General and administrative expenses for the period excluded QAR 24 million, representing a reduction of QAR 7.1 million or 23% compared to the same period last year. This reflects sustained efforts to streamline operations, optimize organizational structure and eliminate nonessential costs. Cost discipline remains as core management priority, and we continue to maintain expenses at prudent levels while supporting essential operational and strategic initiatives. On the balance sheet side, there is no big movements and trade and other receivables decrease is primarily due to reduction in sales. Cash and bank balance increase is primarily due to collection against Mubadara program, which will be used to settle the liabilities of Mubadara suppliers. There is a change in recycling of translation reserve as a result of the Board decision to close the Sudan branch. The foreign currency translation reserve is required to be recycled through profit and loss in accordance with IFRS. This recycling does not affect total equity as it is merely a reclassification within the equity. And thank you very much for your continued trust and support. Now I would like to welcome any questions you may have. Thank you.

[Operator Instructions] As of right now, we don't have any pending questions. I'd now like to hand the call back to Dana for closing remarks.