Qatar Cinema and Film Distribution Co. (Q.P.S.C) (QCFS) Earnings Call Transcript

Hello, and welcome to the Qatar Cinema Conference Call. Please note that this call is being recorded. [Operator Instructions] I will now hand the call over to Dana. Please go ahead.

Hello, everyone. This is Dana Al Sowaidi from QNB Financial Services. I would like to welcome everyone to Qatar Cinema and Film Distribution Company's Second Quarter 2026 Financial Results Conference Call. On this call from management, we have Abdel Rahman Najdi, General Manager; Gamal Eldin Elbanna, Finance Manager; and Walaa Sayed, IR Officer. We will conduct this conference call with management first reviewing the company's results followed by a Q&A session. I will now turn the call over to Gamal. Please go ahead.

Thank you. Thank you. Good afternoon, everyone. It is my pleasure and honor on behalf of the management of Qatar Cinema Company to present the annual financial statement of 2026 report to you, which include a brief overview of the key performance indicators and financial results for the 6-month period ending 30 June 2026 and discuss important factors affecting our business. The company relied on multiple revenue streams to avoid the risks associated depending on a single source of income, thereby ensuring continuation and sustainability in its operation. The company generated total revenue of QAR 12,050,470. For the business ended June 30 2026, representing a decrease of [indiscernible] compared to the same period 2025. This decline was mainly due to the decrease in revenue resulting from the amendment of Qatar Cinema and Film agreement during the [ compensatory ] of the previous year. In addition Cinema revenue was negatively affected the earnings February and March due to impact of U.S. Iran war. The company revenues came from the following 4 sources: one, operation and management of cinemas. The company owns 4 cinemas for which they are located in well-known shopping complex in addition to the high-quality cinema located in Katara Cultural Village. Cinema revenue represented 29% of the total revenues. However, the company's cinema recorded a 5% decline in the performance in Q2 2026 compared to the same period last year, mainly due to the lower revenue in the months of February and March as a result of the impact of U.S.-Iran war. Two, real estate sector. The company-owned portfolio of prime real estate assets, some leased to Qatar Airways and other to different tenants. Rental income constitutes the largest portion of revenue, accounting for 56% of the total revenue. Revenues from royalty rental increased by approximately 8% compared to the same period last year, mainly due to leasing several residential [indiscernible] properties. Three, investment portfolio in the securities market. The company holds a diversified liquid security portfolio on the Qatar Stock Exchange, enabling us to seek quick investment opportunities when liquidity is needed. Dividend income contributed 9% of the total revenue in Q2 2026. Four, other revenues. Additional revenues excluding the 3 sources mentioned above accounted for 6% of total revenues representing a decrease of approximately [ 89%] compared to the same period last year, which is significant decline or mainly due to the reduction in the revenue resulting from the amendment of [ Katara ] Cinema film agreement as I mentioned above. The significant decline in other revenue contributed a decrease in the net profit to QAR 3,410,929 represented a decline of approximately [ 61% ] compared to the corresponding period of the previous year. However, the company remains to maintain above [indiscernible] performance across its operating activities. The company's total investment amounted to approximately QAR [indiscernible] million distributed between 34% in equity investment and 66% in the real estate investment. Investment activities contributed 65% of the total revenue. The company does not rely much on loan to finance its assets and currently funding assets through equity and other liabilities. The company's liquidity decreased by approximately QAR [indiscernible] at of the end of June 2026, representing about [ 6% ] as the cash balance at the end of June 2026 was approximately QAR [indiscernible] million. The decrease was mainly due to dividend payment for the year 2025 and an increase in general and administrative expenses providing the payment of board remuneration and staff bonus made in March 2026. However, the available cash continues to support the company's financial liquidity position and ensures the sustainability of its operation in the long term. Future plan of the company. Regarding the Memorandum of Understanding signed with Qatar Museums concerning the redevelopment and operation of the Gulf Cinema building, the company will continue its ongoing effort and discussion with the concerning authority to rejoin agreed solution regarding the acquisition of the cinema land, wherein it want comply with the requirement of [indiscernible] project and safeguard the right of the company shareholders. It involves noting that Gulf Cinema land, if you listened, it was terrific, achieved how the company had formed an integral part of its future plan and investment. In light of the visibly changing market conditions and increasing competition in the cinema division sector, the company will continue to implement promotional content and increase cinema revenue by signing agreement with a number of other organizations. This reports are intended to attract their employees and [ bear ] the company's cost on all gains. The company also continue to [indiscernible] its cinema ticket sales channels through its online platform contribution to [earning] [indiscernible] its sales to the target base. The company may even seek to expand its cinema portfolio by increasing the number of cinema screens, thereby supporting sustainable growth and improving its long-term competitive advantage. It is in due course also agreement with the shopping mall owners that take into consideration the increasing need in competition will definitely return capital. The company is currently engaged in the discussion with the shopping mall owners regarding the development and improving the existing cinema packaged it through a number of upgrading and encouragement for -- to enabling more [indiscernible] and improve the cinema [indiscernible] in line with the customer satisfaction and expectation. Thank you for joining today's conference call and we are ready to questions.

[Operator Instructions] There are no questions at this time. I will now hand the call to the management for closing remarks.

As there are no questions, we would like to thank the company's management for the results update, and we look forward to speaking to you all for the third quarter results.

Thank you for joining the call today. You may now disconnect.