Qatar Fuel Company Q.P.S.C. ("WOQOD") (QFLS) Earnings Call Transcript
October 15, 2026
Earnings Call Speaker Segments
Hello, and welcome to WOQOD conference call. Please note that this call is being recorded. [Operator Instructions] Now I would like to hand the call over to Phibion Makuwerere. You may now begin.
Thank you, Mark, and good morning to you all. I would like to welcome you all to the WOQOD 3Q and 9M of 2026 Earnings Conference Call. On the call today from WOQOD's management team, we have Pradeep Kumar, the CFO. We have also Abdulrahman Al-Hammadi, the Finance Manager. And also, we have Ahmad Said Al-Mansoori, the IR Officer. And as usual, they will first go over the presentation, and then we have a Q&A session immediately afterwards. Let me now turn over the call to Ahmad to begin. Over to you, sir.
Thank you, Phibion. Good day to all the participants, and we hope everyone is keeping safe and healthy. We welcome you all to WOQOD's third quarter and September 2026 results conference call, and we appreciate your participation as WOQOD is committed to continuously enhance its Investor Relations initiatives. This is to strengthen our communication and improve transparency with all members of the global investment community. The presentation of this call will be available on the Investor Relations section of our website. Any statement that refers to expectations, projections, guidance or any other characterizations of future events, including financial projections or future market conditions, is a forward-looking statement based on the assumptions today. Actual results may differ materially from those expressed in these forward-looking statements. The company cannot disclose any commercially sensitive information due to the confidentiality agreement signed with suppliers. Please refer to Slide #2 for the full version of disclaimer statements. All figures expressed in this call are on Qatar riyals and the conversion for the same to U.S. dollar is QAR 3.64 to USD 1. Now I'd like to hand over the call to our Finance Manager, Mr. Abdulrahman Al-Hammadi, to provide a brief overview of WOQOD and update on the key operational activities.
Good morning. Thanks, Ahmad. The key vision of WOQOD is to be leading the petroleum product distributions and related services marketing company in the region. I'm on Slide 4 now, which shows the overview of WOQOD Group. WOQOD started operations in 2002 with exclusive rights for storage and distribution of petroleum products in the State of Qatar. Operations started with 2 petrol stations in 2003 and has grown to 129 stations at the end of September 2026. The chart on the right shows WOQOD's station network. WOQOD also owns and operates 13 FAHES centers for inspection of vehicles across the State of Qatar. On Slide 5, which shows the key operations of WOQOD Group. Key operations of WOQOD Group are diesel and gasoline fuel distribution and sales, jet fuel distribution and sales, shore-to-ship and ship-to-ship bunkering, LPG distribution and sales, natural gas distributions and sales, fuel bunkering, bitumen operations, C-store and auto care activity, vehicle inspection services and office leasing. Turning to Slide 7, which shows the diesel and gasoline fuel sales volume trend analysis. As mentioned before, the core activity of WOQOD is the fuel distribution and sales in the State of Qatar. Total fuel sales lower by 2% during YTD September 2026 as compared to YTD September 2025, driven by current circumstances. Diesel sales volume decreased by 6% during YTD September 2026 versus the same period last year, mainly due to lower sales in B2B bunkering and retail, driven by prevailing circumstances. Combined gasoline sales volume increased by 1% during YTD September 2026 as compared to YTD September 2025, driven by market demand. On a quarter-on-quarter basis, third quarter 2026 diesel sales volume increased by 13% and gasoline sales volume decreased by 2%. Average fuel price for diesel increased by 1%. However, the average fuel price for gasoline decreased by 1% during the reporting period. Turning to Slide 8, which shows the jet fuel sales volume comparison. Jet fuel sales decreased by 25% YTD September of 2026 as compared to the same period last year, driven by current circumstances. On a quarter-on-quarter basis, jet fuel sales volume for third quarter 2026 increased by 40%, driven by market demand. Jet fuel price for YTD September 2026 increased by 26% as compared to the same period last year, driven by change in crude oil price. Combined sales volume of all petroleum products decreased by 14% during YTD September 2026 as compared to the same period last year. Turning to Slide 9. which shows the quarterly trend of retail fuel sales volume trend. Overall, retail fuel volume of WOQOD petrol station decreased by 1% during YTD September 2026 as compared to the same period last year, driven by current circumstances. Retail diesel decreased by 4% and gasoline sales remained stable during YTD September 2026 as compared to the same period last year, driven by market demand. On a quarter-on-quarter basis, third quarter 2026 retail diesel sales volume increased by 4% and gasoline sales volume decreased by 2%, driven by market demand. The market share of WOQOD in petrol station retail market in the State of Qatar reached to about 84% during YTD September 2026. Nano fuel retail sales decreased by 7% during YTD September, mainly on account of decrease in Sidra and APC sales due to market conditions. Now I would like to hand over the call to our CFO, Mr. Pradeep Kumar, to discuss the key financial results.
Thank you, Abdulrahman, for all the volume updates. Good day, everyone. Now I would like to discuss the consolidated financial results of WOQOD for the third quarter '26 and the 9-month period ended 30 September 2026. Slide 11 shows the revenue trend of WOQOD. Revenue from petroleum products accounts for nearly 97% of the total revenue. WOQOD achieved total revenue of QAR 17.8 billion for YTD September 2026 as compared to QAR 19.2 billion during the same period last year, resulting in an increase of 7% -- sorry, decrease of 7%. This decrease is mainly driven by decrease in overall fuel sales volume by 14% during YTD September '26 as compared to same period last year, partially offset by increase in prices by approximately 10% during the same period. On a quarter-on-quarter comparison basis, the total revenue for third quarter '26 increased by 45%, mainly due to increase in sales volume by 20% and increase in average sales by approximately 25%. Turning to Slide 12, which shows the net income trend analysis. WOQOD has made a net income of QAR 852 million for the period ended YTD September 2026. higher by 13% as compared to same period last year, mainly due to favorable trading stock price variance during third quarter '26. For the third quarter '26, WOQOD has made a net income of QAR 454 million as compared to QAR 291 million during third quarter of '25, increase of QAR 163 million, which represents 56% increase, mainly driven by the trading stock price variance as mentioned above. On a quarter-on-quarter basis, the net income for third quarter increased by QAR 219 million, driven by the same reason, which is trading stock price variance. The detailed analysis of net income is given in the next slide. Slide 13 shows the key variance analysis of net income for YTD September '26 as compared to same period last year. The increase in net income of QAR 100 million, which represents 13% increase as compared to same period last year. However, after excluding the fuel stock price variance of QAR 209 million, which we earned mainly during the third quarter, the net income on a normalized basis has decreased by QAR 109 million, mainly due to the following 3 reasons: Fuel operating margin decreased by QAR 69 million. That's mainly due to sales volume decrease by 14%. B2B segment income lower due to prevailing circumstances. Non-fuel segment income also decreased mainly due to prevailing market conditions. On the other side, the favorable trading stock price variance of QAR 209 million is driven by higher jet fuel prices, which we believe is temporary in nature due to the prevailing market conditions. This is expected to reverse once the oil price gets back to its normal levels. With this, we have completed the financial review of results for the 9 months period ended 30th September 2026. Regarding the current geopolitical situation, adequate measures have been taken by WOQOD to ensure safety of employees and continuity of business operations across all segments in accordance with the directives from the authorities concerned. WOQOD's results reflect the resilience of our business, the financial strength and our continued focus on safety, reliability and operational efficiency. WOQOD's fundamentals continue to remain robust, and WOQOD is committed to meet all its strategic goals while placing safety as a top priority. WOQOD has a strong leadership committed towards delivering the results to its shareholders. With this, we are ready for the Q&A session. Thank you.
[Operator Instructions] Your first question comes from the line of Rob Skepper from Ashmore.
I mean just a quick one on the fuel stock variance gains. Just to understand, have these gains been realized, i.e., through selling lower-priced jet fuel inventory? Or are they accounting gains as inventory is revalued with prevailing prices?
I would say most of it is realized in cash.
Yes. Okay. Got it. And then so you expect, obviously, if the market were to change for any reason that you would effectively have high-priced inventory that you end up selling low should the market normalize?
Yes, that's the risk that we carry on our inventory. Yes, if it changes later or comes down, definitely, that will have an impact on us.
Yes. Got it. Okay. And then just -- yes, I mean, as we approach kind of the end of the year, kind of thoughts turn a little bit to dividends. What can you say at the moment? I mean, obviously, the earnings are tracking better. Obviously, a whole chunk of that is the inventory gains, which is temporary as you're saying. Balance sheet is in great shape, et cetera. Like how are you guys thinking on the dividends as we look towards the end of the year?
Well, we have one more quarter to go. As you know our history, we always paid healthy dividends to our shareholders. So definitely, that's our target, but we need to wait for the year to close so that Board can make the right decision at the appropriate time.
Your next question comes from the line of Ahmed Nassar from Doha Bank.
Again, I am asking about the dividends and the dividend per share. So for 2026, there was a payment of QAR 0.5 that was made out in February. And that's considerably less than what usually the company pays every year. So do we expect another payment this year? And if not, are we expecting the QAR 0.90 for the full year of next year? Or are we going to stick with what was paid out, which was QAR 0.50 this year?
Yes. Regarding dividend, yes, that's the final dividend that we paid during the first quarter relating to last year. That was the QAR 0.5 you're talking about. Regarding interim dividend for this year, we are not planning any interim dividend during this year. However, for the final dividend, as I mentioned before, please wait until our year-end is over and the Board meeting is over. And definitely, we will communicate in due course. Thank you.
Your next question comes from the line of Mohammed Al-Thunayan from Jadwa Investment.
I have a question on the jet fuel agreement with QatarEnergy. Just to make sure I understand it correctly. Is the month -- is the price set 1 month ahead of time? So for example, in end of October, would they set the price for end of November -- for the month of November and then you would buy at that price throughout that month and sell at spot to the airline operators? Or is that not how the dynamic works? And then the second question is roughly how much inventory do you try to keep on hand between retail and jet fuel in terms of [indiscernible]
Your first part of the question regarding pricing, it is decided by -- it's regulated by our upstream supplier, and we are a distributor and whatever price determined by them, we just follow the pricing rules, and we cannot disclose that due to commercial sensitive information. Regarding the inventory we carry, we -- on average, we carry 10 days of inventory across the product.
Sorry, I just want to understand what is the price set, if you can disclose that at least? Or is it set as a fixed price? Or can you not disclose that as well?
Well, price is regulated and whenever our upstream supplier changes the price, we change accordingly.
Can you let us know how many -- how frequently they reprice? Is it monthly, quarterly, annually? Or is that something you can disclose?
It's purely the prerogative and they can change the pricing any time they want.
Your next question comes from the line of Ejayan Al-ahbabi from Al Rayan Investment.
Congratulations for the good set of results. This is Ejayan Al-ahbabi from Al Rayan Investment. So I know you said that the jet fuel prices will eventually normalize, but I wanted to ask on your outlook regarding this normalization. Can we expect Q4 and Q1 '27 to remain the same if the prices are the same?
It's a very good question. It all depends on the market dynamics on this oil pricing, which once the price comes down, which we all know very well, we all watch the news, then definitely that will have an impact on the jet fuel. Is it going to happen in the last quarter of this year or first quarter of next year? We don't know. We are also watching on that. And we have no control on that.
So if the oil prices remain intact, we -- is it safe to assume that the margins will stay the same?
I didn't say the margin will remain the same. I'm talking about the price impact on the inventory we carry. So when the oil price come down, definitely, it will have an impact on the trading stock price variance.
Your next question comes from the line of Waruna Kumarage from SICO.
I have 2 questions. The first one regarding the diesel volumes. Although there's a sequential recovery still compared to the levels last year, there is still, I think, levels are lower. I guess this will represent the industrial activity in Qatar. So is there -- do you think that you will see sequential improvement? What is your expectation regarding volume growth in this segment going forward?
And your second question?
Yes. Second question is on the -- again, going back to the fuel -- the pricing -- sorry, the inventory valuation. And if I -- I mean, I'm not very sure what benchmark to look at. But even earlier in the year, maybe in 1Q, there was an increase in the market price of jet fuel, but you guys didn't record the inventory in that time. But now again, in 3Q, there is -- I mean, you can clearly see from the benchmark prices that there is a price in jet fuel -- the spike in jet fuel prices, which is reflected. So I want to understand why wasn't there -- going back to 1Q actually, not related to this quarter. Was there a -- I mean, what was the reason that there was no inventory adjustments in 1Q? Maybe I'm looking at the wrong benchmark, but I just want to get a clarification on that.
Well, first of all, regarding the diesel volume, it's purely relating to the macroeconomic situation, coupled with the current geopolitical situation. So yes, there is a general slowness in the diesel sales, which we expect once the situation is kind of settle down, we expect it might improve, but we don't know. We need to wait and see on that situation. Regarding the trading stock price variance, we clearly explained during the first quarter call about the first quarter variance. Now we are talking about the current variance, which is mainly attributable from the jet fuel trading price, and we account for every quarter the stock variance, and we explained in quarterly also.
Your next question comes from the line of Alowi Alimirah from Morgan Stanley.
I have 2 questions. The first, just to confirm my understanding. So in terms of the fuel prices, is determined by the supplier and then the risk positive or the exposure positive or negative is through the 10-day roughly inventory, correct? And then related to that, the margins, you don't disclose due to commercial reasons. Is my understanding correct?
Yes. When we purchase the inventory, definitely, we purchase at the current price. And when the price goes up and when we dispose the inventory, definitely, that get translated to a gain and can happen vice versa also. That's why I mentioned that the current gain that we got QAR 200 million is subject to fluctuations in future. And the price is decided by the regulators.
Yes. And then the margins, you don't disclose it due to commercial sensitivity.
Yes. Thank you.
Okay. And then just in terms of a good portion of your income comes from investments and is there any update you can share there in terms of how should we think about your large investment book?
Yes, that's an area where we continue to optimize our income to support the overall income. So definitely, that's an important area that we have continued to focus to make sure that we optimize wherever possible. We are continuing on that efforts on that area as well.
Phibion, we'll have one last question.
Your final question comes from the line of Aashish Agarwal from The First Investor.
Most of my questions are answered. I just need to ask these 3 new stations and 4 additional stations that you have opened and plan to open, respectively. Are these purely a commercial decision? Or there is an element of government authorities asking you to open these branches? And if it's because of the government authorities asking you to open these branches, what are the KPIs? Like can you share like -- I mean, if the new pumps are not generating enough profits, will you be compensated by the government in that case? That's my question.
As we are monopoly company, so we explore the business. And based on that, we decided to serve the committee also. For that, we have to find the opportunity.
That concludes our Q&A session, and I will now turn the conference back over to Phibion Makuwerere for closing remarks. Please go ahead.
Thank you, Mark. Sorry, just before I close, Pradeep, I've got 2 questions. One, it's my own question and the other one I got it from an investor who was not able to connect. So the first one relates to your 3Q profit. Basically, what I want to understand is this QAR 209 million fuel stock variance profit boost, how much of it is related to 3Q only? Was this QAR 209 million is for year-to-date, right? And then the second question relates to your -- on the balance sheet. There was a spike in leases at the beginning of the year, I think, of at least QAR 1 billion. So the investor just wants to understand what is that related to?
Yes. Regarding the first part of your question relating to the trading stock price variance, majority of it relates to the third quarter because the first 2 quarters, the pricing were pretty much constant, as you can see from that. The major price changes happened during the third quarter. Regarding the lease asset, it is completely in line with the IFRS requirement where our land lease got into -- onto the balance sheet in accordance with the IFRS requirements based on the contract signed for the petrol station land. That's all.
Thank you, Pradeep and I want to thank the rest of the management team for taking the time to engage with investors. If there are no further questions, it brings us to the end of our call today. I would like to thank you all for joining us, and please do join us in the future.
Thank you.
Thank you all.
Thank you, Ahmad. Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.
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