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

Hello, and welcome to the Zad Holding Q3 2022 Earnings Call Conference. I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome Abdul Salam Abdul Hakeem, Vice President, Finance, to begin the conference. Abdul, over to you.

Good afternoon. Welcome to the conference call to discuss on the financial Zad Holding Company for the third quarter 2022. I would be giving a brief note about revenue, gross profit, net profit, EBITDA, and leave it to the floor for the questions and answers. We achieved revenue of QAR 1.15 billion for the third quarter 2022 as against QAR 883 million the same period last year. We also track gross profit of QAR 209.06 million in comparison to the last year QAR 197.43 million for the same period. We achieved net profit of QAR 131.33 million in comparison to QAR 134.84 million against last year's same period. We achieved EBITDA of QAR 179.48 million compared to the last year EBITDA of QAR 178.91 marginal increase. I'll leave it to the floor for the discussions.

[Operator Instructions] Your first question comes from the line of [ Mustafa Amir ].

[Foreign Language] Just wanted to ask in terms of the costs -- direct costs. How are you seeing them? And how have they been from Q1 to Q3? And what are your expectations cost for Q4? And how do you see -- I mean, I assume there's been a buildup of inventory, which I assume has been catered to the Q4, the World Cup, et cetera. So how is Q4 looking for you?

Good question, [ Mustafa ]. You could have seen the financials up to the quarter -- third quarter ending. There is a cost pressure from -- and for various reasons like the material costs have gone up due to the war right now [indiscernible] and the edible oil, right? We have also built up inventory, right, that is also going to push the cost down to the third quarter also. But we are trying to manage through like passing on to the customers like -- so the similar -- there's not a level of thing we expect. So we'll have to wait and watch like how it goes for the fourth quarter. So since we are talking about the -- up to third quarter, I see that like the similar kind of levels only.

Okay. Just want to ask being in Qatar, the prices are regulated. And if you want to ask for a price increase, it has to be through the Ministry. Have you been successful in raising the prices for your items? Or has the ministry not allowed you to do so?

See, we keep on asking for the price increase, but we are successful partially, but not fully right now. We are able to put forth and we're able to testify, but then we are not getting what actually we are expecting of. Could -- somehow we get something right now. I won't say that it's not there, but not fully.

Okay. So I mean -- so definitely -- so the cost side is definitely hampering you more than any price increase?

Absolutely right. If you see the gross profit level, it will show you that.

Right. Just to understand more, I won't take much of your time. Just to understand if the cost price pressure had not been there, given the population increase and everything, sort of what level you have seen in your gross profit at in terms of percentage, how much higher would it have been?

Similar level of last year, like nothing else rate like now. We maintained a similar level of last year rate. 2 to 3 -- 3% to 4% level, maybe.

[Operator Instructions] It seems like we don't have any more questions. There are no further questions at the moment. I would now turn back the call over to Abdul. Abdul, over to you.

To me, I'm through. Like, if there's no questions, like, can we wind up?

[ Connie ], can I close?

Yes. I already turn over the call to Abdul for closing remarks.

All right. Okay, let me close. Am I audible?

Yes, you're audible. Yes.

All right. If there are no questions, it brings us to the end of our conference call today. Thank you all for joining us. I want to thank you all for joining us. And I also want to thank the management team for answering investors questions. Should you have any more questions, don't you hesitate to contact us at QNB Financial Services or the Zad management directly. Please join us again in Q4, and have a good afternoon. Thank you.

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

Thank you.