Zad Holding Company Q.P.S.C. (ZHCD) Earnings Call Transcript & Summary

Good day, and welcome to the Zad Holding Company Second Quarter 2022 Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Roy Thomas. Please go ahead, sir.

Hello, everyone. This is Roy Thomas from QNB Financial Services. I want to welcome everyone to Zad Holding Company's Second Quarter 2022 Financial Results Conference Call. On this call from Zad Holding Company, we have Abdul Salam Abdul Hakeem, the VP for Finance; and Abdella Ali Ismail, the Head of IR and Board Secretary. We will conduct this conference call with management first reviewing the company's results, followed by Q&A. I will turn the call now over to Abdul Salam Abdul Hakeem. Go ahead, Abdul Salam.

Good afternoon, everyone. Welcome to the conference call to discuss on the financials of Zad Holding Company for the first half year 2022. I'll be giving a small brief note on the revenue, gross profit, net profit and EBITDA and leave it to the floor for the question and answers. We have achieved QAR 809.42 million in the first half year revenue as against QAR 551.31 million compared to last year. We have achieved QAR 134.93 million as gross profit compared to last year, QAR 135.56 million. The net profit stood at QAR 96.1 million in comparison to QAR 104.3 million compared to the last year. The EBITDA stood at QAR 130.67 million compared to [ QAR 140.17 million ] for the last year -- last first last year. And I'll leave it to the floor for the question and answers.

[Operator Instructions] And our first question comes from an Ejayan Al-ahbabi from Al Rayan Investment.

This is Mr. Ejayan from Al Rayan Investment. Just wanted to ask in terms of the cost pressures that are being faced with the rising inflation globally. How are you being affected by those cost pressures? And what are you trying to do to mitigate them?

Good question. Actually, definitely, there is a cost pressure now on the current situation. The economics of prices have gone up, but simultaneously we have been getting price increase. We have been applying for price increase in the government. It's going on, but there is a lag on. But now the market -- the commodity prices are going down. So I hope we will be able to manage. And we are also attempting through the different sources. So we're trying to like mitigate those through that. Like the other vendors and other suppliers, we are able to get competitively procured bookings. So that's how we are now managing.

So do you expect the cost pressures to be lower in Q2 -- sorry, in second half of the year?

Yes, definitely. Definitely. We expect that to go down, yes. Already you can see oil [Foreign Language] gone down the -- it's almost 20% compared to the second quarter. Almost 20% has gone down. So definitely, we look forward. Yes.

Yes. And with regards to the World Cup Q4, are you increasing your inventories at this stage in anticipation of the World Cup? What are your plans for in place for the World Cup?

Actually, if you see the inventory levels like in the balance sheet, it will show the higher side, it's also the part of the preparing for the World Cup. So we are actually -- we have already started increasing. We already started, and it is going on. So it's a part of our strategy to build up the staff for the FIFA World Cup. It's also incentive -- it's an initiative from the government, the government is also actually coordinating activities with the companies. Yes, as we are aware.

There are currently no further questions in the queue. [Operator Instructions] And we have a follow-up question from Al Rayan Investment analyst.

This is actually Akbar from Rayan Investment. I just had a question on your investments over the course of over the course of the year, the value of your investment -- or the amount that you have invested has gone down. Is that because you have made some sales? Or is that because the value of the investments have fallen?

You are talking about the investment securities or investment commodities?

Well, I was just looking at the investment securities.

Okay. Investment securities, its value has gone down.

Right, right. And those investment securities are predominantly in Qatar or around the world?

Not in Qatar, they are fully outside Qatar. U.S. based. Outside of Qatar.

Right. Okay. And in terms of investment in commodities, and I guess I'm referring to gold in particular. Have you made any changes during -- in the first half?

Yes. We have sold some. The reason in reduction is on account of sale of part of our commodities as a part of strategy. So we wanted to sell and keep it on cash. So it's a continuing strategy, right, it goes on. So we will be now entering into the third quarter. We'll see how the market goes. And accordingly, we will keep our prepayment of the commodities.

And there are no further questions in the queue. With this, I'd like to hand the call back over to our speakers for any additional or closing remarks.

All right. If there are no further questions. We'd like to thank Zad Holding Company's management for the results update and answering all the queries and look forward to speaking to you all for the third quarter results. Thank you.

Thank you.

Thank you very much.

This concludes today's conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.