Barwa Real Estate Company Q.P.S.C. (BRES) Earnings Call Transcript

Thank you for standing by. My name is Janice, and I will be your conference operator today. At this time, I would like to welcome everyone to the Barwa Real Estate Conference Call. [Operator Instructions] I would now like to turn the call over to [indiscernible] .

Thank you, and hello, everyone. I want to welcome you to Barwa's Second Quarter 2025 Financial Results Conference Call. So on this call from management, we have Tamer El-Sayed, Group CFO. And as usual, we will conduct this call with first management reviewing the company's results followed by a Q&A session. I will turn the call over now to Tamer. Please go ahead.

Thank you, [Foreign Language]. Good day, everyone, and a warm welcome to Barwa Real Estate 30 June Post Results Conference Call. I am Tamer El-Sayed, the Group Chief Financial Officer, and I am joined by our team to share our performance and outlook. First, I would like to express our gratitude to QNB Financial Services for hosting this call on behalf of Barwa Real Estate. Before we begin, a brief note on forward-looking statements. Except for historical facts, any projections or expectations shared today regarding future events or financial performance are forward-looking. These statements are based on current assumptions and are subject to risks and uncertainties. Barwa undertakes no obligation to update or revise them based on new information or future development. Barwa Real Estate announced its half 1 2025 financial results on 29th of July 2025. The financial statements and the investor presentation are available in the Investor Relations section of our website. For those new to Barwa, we are one of Qatar's leading real estate developers, specializing in developing, leasing and managing a diverse portfolio of assets. Our operational portfolio spans approximately 5.6 million square meters of built-up area, including 14,221 residential units and 54,646 labor accommodations room, warehouses, retail showrooms, offices and hospitality properties. These assets generate roughly 80% of our operating revenue and 91% of our operating profit as detailed in our investor presentation. Additionally, Barwa holds a strategic land bank of approximately 1.9 million square meters with 1.84 million square meters in Qatar. Out of this, we own 847,000 square meters with the remainder under lease. Moving forward, we plan to selectively monetize this land bank through sales or development guided by the market demand. Now let's review our half year -- first half 2025 performance highlights. Revenue. Total operating revenue reached QAR 899 million compared to QAR 919 million in half year 2024. Operating profit. Our operating profit was QAR 625 million, down from QAR 632 million in the half year 2024. Net profit. Our net profit attributable to equity holders remained stable at QAR 560 million, slightly up from QAR 557 million in half year 2024. For the balance sheet, our financial position remained strong with net debt at QAR 11.1 billion, resulting in a net debt-to-equity ratio of 0.49. Our great liquidity balance and balance sheet strength position will help or support our growth strategy. We are also actively refinancing selected facilities to optimize liquidity and cash flow projections. With that overview, we are ready to address your questions. Thank you for joining us. And now I will hand it over to the moderator from QNB Financial Services to facilitate the question-and-answer session. Thank you.

[Operator Instructions] And your first question comes from the line of Seki Mutukwa of Ashmore Group.

Hope you can hear me. A few questions, please, and then I'll go back in the queue. The first one was, could you talk a bit about the potential implications of the law banning unorganized labor market accommodation? I think you mentioned it in your slide deck. Just want to know how big a deal that is, what it could mean for the group? And then the other question is on your slide deck, you have rental revenue for the first half of the year, about QAR 719 million. Could you talk a bit about what you're seeing trends-wise in terms of the market rental rates or lease rates in the residential side, commercial versus also office, just to get a sense of how the market is shaping up.

So regarding your first point about the law regarding the unorganized market, [indiscernible] is on it. We, at Barwa, we take it quite positive in a sense because it will help us organize this particular sector. So we were quite facing it in the past. There was a lot of -- the concerns were happening because the unorganized sector was not able to pump up the demand of the labor market. So there are contractors who are kind of increasingly consolidating their labor accommodation into different positions in order to kind of reduce the rents and to mitigate those things. So we consider it that it is too early to say, but we see how the market will behave in the years to come. And it should give some impetus to the Barwa's labor accommodation portfolio. Regarding your second question about the -- if you really see the Barwa's portfolio performance, it remains very stable with strong contribution coming from the income-generating assets. So if you really ask, there was a moderate recovery that we have seen it in 2025 first half. And it is basically supported from the -- I don't remember -- if you have seen there is a lot of regulatory framework, which has been carried out by the government of Qatar, including the introduction of [ Wakrah ] last year. And in the month of July, they have unveiled a new real estate platform. And the basic purpose is to provide digitization from the inception, and it is -- they are making it very compulsory to make this particular platform digitalized so that the entire purchase journey from day 1 to completion will be easy and it will bring more maturity into the market. And we have also seen that the investors are gradually shifting. There is a demand -- pent-up demand for ownership of the assets rather than leasing because for the long-term visa holders and the domestic end users. And this is, we believe, kind of a positive impact from the new mortgage law, which is now coming into the picture and the government has also come out in terms of having an escrow account in order to safeguard the interest of the investors and the clients.

Your next question is coming from the line of Zohaib Pervez from Al Rayan Investment..

Could you tell us what led to the..