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

Hello and welcome to Zad Holding Conference Call. Please note that this call is being recorded. [Operator Instructions] I would like to hand over our call to our moderator, Phibion Makuwerere. Phibion, please go ahead.

Thank you, Mark. Good afternoon to you all, and thank you for joining us for the Zad Holding Company 3Q and 9 months 2024 Earnings Conference Call. My name is Phibion with QNB Financial Services. On the call today, we have from Zad management team, Abdul Salam Abdul Hakeem, who is the CFO; and Abdella Ali Ismail, who is the Head of IR and the Board Secretary. And as usual, they will go over the performance and we'll have a Q&A session immediately afterwards. I now turn over the call to Abdul, the CFO, to begin the call. Over to you, sir. Please go ahead.

Thank you, Phibion. Good day to all of you. Welcome to the conference call to discuss the financials of Zad Holding Company for the third quarter of 2024. As usual, I'll give a brief note on the performance of the company with respect to revenue, gross profit, net profit and EBITDA and leave it to the floor for the question and answers. We achieved revenue of QAR 1.122 billion for the third quarter 2024 as against QAR 1.226 billion for the same period last year. Gross profit for the third quarter 2024 is QAR 270.3 million in comparison to QAR 247.62 million for the same period last year. Net profit remained at QAR 135.5 million for the third quarter 2024 in comparison to QAR 132.2 million for the third quarter same period last year. The EBITDA for the third quarter of 2024 is QAR 205.6 million as against QAR 207.4 million for the third quarter 2023. Now I'll leave it to the floor for the question and answers.

Your first question comes from the line of [ Ashish Agarwal ].

I have a couple of questions. So the first is with respect to the increase in the gross margins. Can you please explain the drivers behind the increase in your gross margins for this quarter? That is my first question. My second question is, what is your outlook on the population of Qatar? And where do you expect the growth to come from in 2025? And my third question is do you have any guidance to offer for the second half of 2024 and for the full year FY '25? And if I may just squeeze in one more question here. Given that I understand dividends are the decision of the Board, do you have any comment to offer on how the dividends will be for the financial year 2024?

Thank you, [ Agarwal ]. I'll go one by one. The first question you asked about the how the gross margin has gone up. Now that has been consisting of 3, 4 business units. Like last year -- compared to last year, this year, the cost of a few more products have gone -- like raw materials have gone down, okay? That is the reason the gross margin is up. That is the answer for your first question. So the previous conference...

Sorry to interrupt. So the raw material's prices, which has gone down, is this like with the respect to just market forces, is this -- like is this sustainable over the future?

I may not be able to comment on is it sustainable or not. But I don't see any form of factors which will affect our raw materials go up in the next year or so. But it depends like we don't know like what the social political conditions and that. The first question, I hope I've answered you. This conference call, [ Agarwal ], is basically meant for like the discussion on the performance of the company up to the third quarter 2024. But we won't be able to give any opinion on like 2024 or '25 projections like in this call. Okay. When you talk about your projection when you talk about your dividend perspective, I won't be able to answer on this call. With regards to population, I don't have -- say, we go by with only the statistics from the government like whatever they publish in the website with the Ministry. That's how we go. So I also don't -- I won't be able to comment on like how do we expect the population go. You've been hearing from the government like what is the population expected to go up. So we believe on that. And based on that, we proceeded. I hope I have answered your question.

[Operator Instructions] Our next question comes from the line of Ejayan Al-ahbabi with Orion Investment.

So my first question is related to your assets. So the due from the government of Qatar as went down by almost half from the beginning of the year. Could you please provide some color on that? And also, your finance cost has not went down after the lowering rates. Could you please give us some guidance on both?

As far as the first question is concerned, like due to government of Qatar, what you have asked, like it's a matter of what we are paying to the government, we have been paying...

No. From government, the asset.

That's what I'm saying due from the government of Qatar. We have been receiving, correct? We have been receiving towards the subsidy component. And we have been also paying to them as there are a lot of loans also. It's a combination of 2 factors. So they have been paying us in time, and that's one of the reasons. And the subsidy component value has also gone down. That is one of the reasons. There are 2 reasons because of that due from Qatar has gone down. Is it clear? Second question, finance charges, it is -- finance has recently got reduced, correct? The impact will come only in the fourth quarter.

There is no further question at this time. I will now turn the conference back over to Phibion for closing remarks. Phibion?

Thank you, Mark. If there are no further questions, it brings us to the end of our call. Please join us for the fourth quarter call. And thank you for -- I'd like to thank the management team for addressing investors' questions. This brings us to the end of our call. Good afternoon.

That concludes today's call. Thank you all for joining. You may now disconnect.