Dhofar Beverage and Food Stuff Company SAOG (DBCI) Earnings Call Transcript

[Foreign Language].

Good morning, and my name is Idrees, Finance Manager. We will be sharing our financial highlights today. This discussion session is designed to present the financial statements for the first half of 2026. And these are the assumptions taken to prepare the financial statements that these are from January to June 2026, and these are -- this presentation is derived from the company's financial statements and some prior years comparatives are also presented with budgeted figures and other year-to-year comparisons. And some of the presentation is also containing the looking forward statements like budgeted management focus areas and the new product launches into the market with the new canning line products. And here is our company information that we are the SAOG company listed on the stock exchange, Muscat Stock Exchange with a share capital of 2 million with shares of 20 million, and we have a distribution sectors in Salalah, -- and the reporting period is 2026. So these are the latest products we have recently launched into the market with Khaleej brand. So we have cola, pineapple, strawberry, orange, lemon mint, these are our flavors that we are dealing into beverages sector. And why it matters for the investment is existing brand equity. Al Khaleej is an established locally produced brand rather than the new entrant, the canned range extend the name already carried across the company's depot network. And we probably say that we are the only Omani company, local manufacturers in the carbonated drinks that we are producing these beverages locally. And ready-to-made distributions, we have owned logistics across our branches, from Salalah, Maabilah, Nizwa, Ibri, Algamil, Amarat and across other sectors all through in Oman started the cans. Cans are a standard format on an on the go modern trade and hotel, restaurant, cafe sales in the regions and complementing the company's existing PET bottle offerings. Here, in the next slide we have the financial results for the first half of 2026. So our revenue reached to OMR 2.37 million. That is higher than year-to-year comparison of 5.4%. So negative results also impacted from the geopolitical situations in the region. That is mainly because of the raw material prices in need the closure of Strait of Hormuz and the shipping lines have been disturbed. And ultimately, correspondingly, we can't increase our sales prices to be in competition in the markets. So these are the highlights from the financial statements. The next slide shows our revenue achievement during the period that 5.4% is the revenue growth on a year-to-year basis. And the budget, we met the budget almost 81%. That was OMR 2.97 million. Also, we are reassessing second half of 2026 based on the current geopolitical situation of the region and due to increase in the shipping cost and raw material costs. So gross margin narrowed as of cost of sales revenues that is 28.2%, and it was 37.8% year-to-year basis. That is slightly high due to the ongoing geopolitical situation. The gross profit and the expense analysis is we have a gross profit of OMR 668,000 and distributions are OMR 624,000 and admin expenses are OMR 369,000 and operating results are OMR 325,000. Finance cost is OMR 90,000, directors and other remuneration. But there is a slight loss during the first half that is OMR 0.15 per share. These all financial position as of 30th June 2026 that our fixed assets increased as of 2025. We have implemented our new can line machine, and we are doing another warehouse. So our assets value has been increased as year-to-year comparison. These profit margins and current ratios has been decreased because our raw material prices have been increased and accordingly, our suppliers' payments have been increased, that's impacted a negative impact on the current ratio that is 0.06%. You can see our operating cash flows increased on year-to-year basis that went to OMR 442,000 as compared to OMR 116,000 in 2025. So that is a positive sign that company is generating enough cash flows to manage the expenses and other operating expenses. Also, our cash and bank balances also stood good within the first half of 2026 as compared to 2025 as we stood at OMR 112,000. These are the main focus that the management is carrying forward for the second half that is the margin recovery in packaging and freight costs along pricing across the product portfolio to rebuild gross margin toward historical levels, working capital management, monitoring receivables, payables, inventory level to support liquidity, including the company's current ratio. The revised second half plan is updating revenue and cost assumptions for the remainder of the year in the light of first half performance against budget. Financing position, continuing to manage the company's borrowing facilities and financing costs in line with the operating requirements. These are the focus areas that the management is keeping an eye for the second half of 2026. And that's what was all from the financial sectors. And if anyone have any questions on the financial figures, please ask. If anybody have any questions, please ask. Otherwise, we can wind up the discussion session.

[Foreign Language].

Thank you, everybody, for joining the meeting. If anybody need any further information, our financials are available on the Muscat Stock Exchange website on our portfolio. And the same presentation discussion session will be uploaded on the MSX website. And goodbye. Have a good day. Thank you.