Good day, welcome to the Qatar Navigation first quarter 2021 results conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Bobby Sarkar. Please go ahead. Thank you, Diane. Hello, everyone. This is Bobby Sarkar, Head of Research at QNB Financial Services. I wanted to welcome everyone to Qatar Navigation's or Milaha's first quarter 2021 financial results conference call. On this conference call, we have Akram Iswaisi, who is the EVP in Finance and Investment at Milaha, and Sami Shtayyeh, who is the VP of Financial Planning and Analysis. As usual, we'll conduct the call with management first reviewing the company's results, followed by a brief Q&A session. I would like to turn the call over now to Akram. Akram, please go ahead. Okay. Thank you very much. Welcome, everyone, to Milaha's first quarterly earnings call, and your interest in the company. First of all, as well, Ramadan Kareem. I'll start with our consolidated financial results and then dive into the segment results. After that, I'll turn it over to Sami to go over the outlook for the rest of the year. Then, we'll end the call with questions and answers. The key highlights of our financial results are as follows. Milaha's operating revenues came in at QAR 675 million for the first quarter of 2021, compared with QAR 692 million for the same period in 2020, for a decrease of 2%. Operating profit came in at QAR 131 million for the first quarter of 2021, compared with QAR 200 million for the same period in 2020, for a decrease of 34%. Net profit for the first quarter of 2021 was QAR 297 million, compared with QAR 283 million for the same period in 2020, for an increase of 5%. Lastly, our earnings per share was QAR 0.26 for the first quarter of 2021, compared with QAR 0.25 for the same period in 2020. Moving on to the segments. Milaha Maritime & Logistics. Top-line revenue decreased by 4%, or QAR 10 million, but operating profit increased by QAR 18 million, and this was primarily driven by our container shipping unit. We right-sized capacity to better align with volumes, which allowed us to, number one, shed costs we otherwise would have borne. Two, get rid of unprofitable revenue. Additionally, at the segment level, we recorded a QAR 6 million drop in the provision for bad debt as compared to the same period last year. At the non-operating level, we had a drop of QAR 5 million as a result of not recording a gain on sale of vessels, which we did last year, along with lower profit from our JV company. These factors drove the 40% increase in net profit we recorded this year. Now moving on to offshore. Operating revenue dipped by 6%, or QAR 12 million, and operating expenses increased by QAR 9 million, both of which drove the drop of QAR 22 million in operating profit compared to the same period in 2020. Higher revenue from the addition of new vessels compared to the same period last year and higher third-party chartered-in vessels more than offset the negative impact of vessel dry dockings, maintenance issues, and COVID-19 off-hires. COVID-19 is not fully behind us yet, and although we've done a very good job at mitigating the impact on our operations, it still affected Q1 offshore results. QAR 99 million in lower impairments recorded last year versus 2021 boosted our overall performance for the segment. Last year, we had close to QAR 99 million recorded impairments. This year, we did not. That has helped improve the financial results, going from a loss of QAR 77 million to a profit of QAR 3 million in Q1 of 2021. Moving on to Gas and Petchem. Operating revenue and operating profit both dropped and we were the results of plummeting tanker rates. As a point of reference, and to give you an idea of the magnitude of the drop, in Q1 of 2020, tanker rates averaged $20,000-$30,000 per day, and that's kind of a range. In Q1 of 2021, it fell to about $10,000 per day. On the non-operating level, income increased by QAR 50 million, with QAR 10 million additional coming from our share of Nakilat and QAR 5 million additional from our VLGC joint venture, which is Gulf LPG, which benefited basically from higher VLGC rates compared to the same period last year. Net profit for the segment ended down QAR 7 million from QAR 150 million in 2020 to QAR 143 million in 2021. Moving on to our trading segment. A 29% increase in revenue coming from virtually all units under that banner improved the bottom line by QAR 1 million versus the same period in 2020. Margins are thin in this segment, so revenue and volume growth are key to improving results. Lastly, moving on to Milaha Capital. Investment income decreased by QAR 27 million, with around QAR 40 million drop in lower dividend income, partially offset by QAR 5 million in higher bond income and QAR 9 million in reduced losses recorded last year in our held-for-trading portfolio. Real estate revenue decreased by QAR 7 million, driven by lower rent income. At the non-operating level, we recorded a negative QAR 31 million in lower gains on the sale of property that was sold in 2020. That wraps up the segments, I will now turn it over to Sami to discuss our outlook. Thank you, Akram. Starting with Maritime and Logistics, we expect overall volumes to remain steady at Hamad Port, which is the main driver of our terminal share profit. On the container shipping side, we were quite optimistic about the rest of the year, and then India imposed a lockdown last week as they try to manage through their COVID-19 situation. To the extent that does not turn into a prolonged matter, we expect the unit to continue to outperform 2020. In logistics, utilizations are expected to continue increasing in the warehouse, and client sites that had been shut down due to COVID-19 are gradually reopening, allowing us to work on-site again. Both of these are good news. In offshore, although Q1 results came in weaker than expected, we feel cautiously confident that operations will perform better in the rest of the year. We do have many dry docks scheduled this year, and COVID-19 related expenses and downtimes could alter that view, but as we stand today, we feel good about Offshore's outlook. In Gas & Petrochem, the majority of our business is fairly predictable due to the long-term nature of contracts. Two parts of our business that are less predictable are the tankers and our VLGC joint venture, which are both exposed to volatile spot prices. How spot prices fluctuate throughout the year is difficult to predict, and so there is some uncertainty on these two units. In Trading, we saw a decent pickup in revenue in Q1 and are cautiously optimistic on the rest of the year, given sales efforts and what we're seeing currently in the pipeline. Lastly, on to Capital. On both the investment and real estate fronts, we don't foresee any major changes up until the new tenancy contract on our new villa compound starts up in Q3, which will have a positive impact. With that, we'll now open up for questions and answers. Operator? Thank you. Ladies and gentlemen, if you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. We will take our first question from Divye Arora with Daman Investments. Please go ahead. Hi, gentlemen. Thank you for the call. When we look at your profitability, most of your profit is coming from, I would say, three places. One is obviously is the Hamad Port, and then is QGTC, and third is the Capital business. If you exclude these three, then the other businesses, which is Maritime and Logistics and the offshore and Gas and Petrochemical, none of these are contributing much to the profits. That also reflects in the valuation of the company. We just want to understand, what is the strategy in each and every business? If you can just go business by business and tell us what do we see? What sort of operating profit can we expect from, let's say, offshore marine business, Gas and Petrochemical business, given these are asset-heavy business, Gas and Petrochemical, offshore marine, but they don't have that much profitability. What sort of a profit do you expect from these businesses five years down the line or three years down the line, if there is not that much visibility? Also on the other business, which is Maritime & Logistics. Thank you. Okay. Thank you for the question. I think it's obvious, and it's been obvious before, that most of our profitability is coming from Milaha Capital and, let's say, maybe non-operating businesses. We've alluded to this before, that number one, if you take Milaha Maritime & Logistics, we have been making investments in our logistics business, and that's been paying off. If you notice right now, this business, and I think I was asked that question as well last quarter, when will this business become profitable? If you look at 2021, Q1, this business is already profitable. We were showing a loss last year, and that loss has turned around. A lot of investment has been made in this business from optimizing your asset base, from bringing in new talent to be able to execute on the company strategy. Within MML, we focus primarily on the feedering. I mean, from a container shipping perspective, we're a feedering company. We've worked on optimizing our network, reducing costs, and really focusing on profitable growth, and that's the key. From a logistics perspective, we've made a lot of investments in optimizing our logistics facilities. We increased occupancy significantly, utilization is extremely high. We've focused now on adding value-added services, creating logistics solutions, and rolling those out to the market. Again, it takes some time to actually bear the fruits of our investment. You're beginning to see that right now, where we're beginning to turn a profit on MML, and we're optimistic that over the next couple of years, Milaha Maritime & Logistics profitability will continue to grow. If you look at the offshore business, this is not unique to the Milaha offshore. Okay? This is not unique to Halul. Globally, the offshore market has been struggling for the past two to five years, if not even more. The reality is, if you compare Halul to other companies, we have been much more lucky, if you will. Our business has survived, and we are profitable. Barring impairments, the business is doing quite well. Today, this business right now, asset ownership by itself doesn't generate profit. We've been focused primarily as well on adding services that can generate margin. In addition to asset ownership, which is critical, you need to start investing in services. We've been investing a lot in services. It's going to take time to show those results in our P&L. Now, we're also optimistic over the next couple of years of hoping to see improvements in oil prices, which will translate in, let's say, in a more improved market conditions for the offshore, for OSV market. I think those factors right now are going to help us over the next couple of years. Sorry. On the offshore business, do you see this business as strategic? You were saying that oil prices can improve. They can again fluctuate downwards given the move towards EVs and all. Do you see this business as strategic in your portfolio, or is it better to maybe you can also think about in some time to offload this business if the profitability in the next one to two years doesn't recover? No, it's strategic. It's strategic. For us, it's strategic for the country. It will stay. How much patience you will keep? For how many years can you if by any chance this doesn't turn around and this continue to be sort of a loss-making business or more or less, net net, not making much money to you and justify the return on assets? I don't think that's the question I'm going to answer right now. Okay. As I mentioned to you, right now it's a strategic asset to the company. We believe in this business, and it's also critical for the country, and this business will remain. At this point, I'm not going to answer any more questions on that topic. Okay. Okay. All right. Thank you very much. I appreciate it. Next question, please. The third one. Gas and Petrochemical. You have another question? No. No, I said like the Gas and Petrochemical division. The third division. The Gas & Petrochem division, we've changed the strategic direction of that business unit. We're primarily focused on niche markets like FPSOs and FSOs. This is the area that we're focused on these days. We're not investing in traditional maritime shipping assets like tankers, like MRs, LRs. We've seen a lot of volatility in the sector, and that market is still way oversupplied. We are focused on investing in assets that are backed by long-term contracts. This is where we're investing right now, especially in that segment. That segment, from profitability perspective, it's relatively stable, but from a growth perspective, this is the area that we're looking at, that we're investing in right now. I think a lot of the contracts in this business are on the spot market, right? For VLGCs that you have, they're on the spot market. Well, they were on a contract, now they're tied to the spot market, yes. The situation changes every couple of years. Any guidance you can give us? Within that segment. Yeah. I was saying, any guidance you can give us in three years? What sort of a operating profit you can see from this business? I can't give you a guidance in three years from now, to be honest with you. Okay. All right. Thank you. If you look at that business, again, the only volatile aspect within that business, the VLGC, is the volatile market. That's a known fact. If you look at the tanker, which we've been selling our tanker business. Our volatility or exposure to the spot market has been slowly reduced. Like I mentioned, we're changing the mix to continue to invest in assets that are backed by long-term contracts, FPSOs, FSOs. You'll begin to see less volatility to spot market rates going forward. That's all I can say at this point. What is the visibility on putting these VLGCs in the charter market? Can we see that happening? What are you waiting for? The rates to stabilize or the rates to go higher from here? Well, I'm not waiting for anything. That depends on the market. It's a view. Again, the market for VLGC is very volatile, and it really depends on the market dynamics and the view of the clients. When clients expect rates to go up, they tend to want to lock in rates. Again, it depends on market dynamics, and we're always looking at if there are opportunities to take advantage of rising spot rates, we will do so. If there isn't, then we'll lock it in and fix the rates as much as we possibly can. I can't give you visibility on that right now because, again, this sector is volatile, and it changes month by month, actually. Okay. Same as in the tanker business. You can't predict what the tanker business will do. As I mentioned, tanker market was doing exceptionally well last year. This year, the rates tanked significantly. Again, this business in general, tankers and VLGCs, it's a very, let's say, tactical business, and you have to manage it on a day-by-day basis or month- by- month. Yep. Okay. I'm good. All right. Thank you very much. Appreciate it. Thank you. It appears there are no further questions at this time. Just once again, it's star one if you wish to ask a question. All right, we do have another question now from Bijoy Joy with Qatar Insurance. Please go ahead. Hello. Hi. Thank you, gentlemen, for the call. This is Bijoy Joy from QIC. My first question is on your operating supplies and expenses. If you don't mind, can you speak up a little bit? Can't hear you. Sure. Can you speak up a little bit if you don't mind? My first question is on your operating supplies and expenses. Can you give some color as to what is happening with Qatar Quarries? Why is the expenses going up? Listen, on Qatar Quarries, revenue's gone up as well, and so has operating supplies and expenses. In that kind of business, it's more of like a trading business. It's natural that revenue's going to go up, operating supplies and expenses, cost of goods sold has to go up as well. It's that simple. Okay. I see that happening on your trading side as well. I understand it's a thin margin business and, the cost of expenses will also go up. Are you guys aggressive on that side? Is there an opportunity that is, going on in the market? How does it look for the year? Listen, I think, if you look at what we've done with that business unit, is we have restructured that business unit. We've sold the travel agency, or we shut it down this month, sold it. We have been focusing primarily on serving the Qatar Marine market as a supplier, as a service provider. We've had all the building blocks. We sell lubricants. We do fleet and technical services, ship repair. A big part of what we have tried to do is focus on serving the Qatar Marine market. That includes as well ship chandlery. Building the supply chain for vessel owners in Qatar has been an area that we're focused on, and we've been investing in that, to be honest with you. If you ask me about the outlook for the company, this is one of the areas that's going to be growing over the next couple of years, because we see a market for this in Qatar. We've been doing it in chunks, if you will. We have been working on building a structured supply chain to be able to serve the Qatar Marine market. You're going to start seeing more activities in that area. This is sort of a build-up to that, to be honest with you. Okay, understood. My second question is on the capital side. When do you think the rental from the villa projects will start kicking in the numbers? August. August of this year. August to September. Barring any delays, August to September. Okay. What kind of a tenure it will be, five years? Is it fair to assume that? Five years, yes. Five years. Other than that, anything on the warehousing side, which you think will start picking up? What is your expectation on that side? Listen, on the warehousing side, to be honest with you, the first thing we've done is we wanted to fill the warehouse, okay, to generate cash flow. We've done a good job of that. Now we're working on optimizing the warehouse that we have to squeeze more value out of it. Now it's about sweating the assets, and we've done that across the board. If we build more warehouses, we're going to build them to make money. We already know that there's already enough capacity in the market. We are constantly looking at what warehouses to build in the future. We're talking about additional capacity. We still have a large plot of land that's been developed, so it's got the infrastructure. It's well-secured. We have the capacity to continue to build, but we're only going to invest in profitable growth going forward. We're not going to follow the build it and they will come approach, but we're going to focus on profitable growth. Right now, what we're focused on is sweating the assets as much as we can. Then we could eventually look at, as our client base continue to expand, to grow, as our client needs continue to grow, then we'll look at building the additional facilities and additional warehouses. Right now, the main focus has been on sweating the assets. We've done a good job of that. Sweating the assets, filling that, maximizing basically the usage of that facility, adding more value-added services. It's not just about renting warehouse space, it's about the movements of inventory in and out. It's about the value-add services that clients need. This is how we're looking at that business today. Got it. Understood. How do you see the offshore market? Do you see any pickup expected or anything moving on that side? Honestly, I think you're reading the same information that you're reading, and we're looking at the same research that you're looking at. There's a lot of optimism, next year and the year after, about a global recovery, about potentially, I mean, oil prices have gone up this year as well, but the continued increase in oil prices over the next few years, which bodes well for the offshore market. We're already starting to see some potential, let's say, CapEx programs have been sanctioned, compared to the past couple of years, where there's obviously a moratorium or a freeze. There is some movement, and it looks quite exciting. Like I said, as I mentioned earlier, we are also expanding into services and new things, and if you noticed from our announcement to market, we've announced about our relationship with Schlumberger and our foray into well stimulation. We're doing a lot more things to enhance our value offerings, our service offerings to our client base, and invest in capabilities. I think we're quite optimistic over the next couple of years. Offshore will look better than the past couple of years. Will it go back to the old days? Not quite sure. But I think we're headed in the right direction and definitely there's optimism about an improvement in our market. Okay. Can you give me some color? There's a 20% or maybe 17%, 18% increase in fleet and technical expenses. Is it something that is happening? I didn't hear. Can you repeat the question again? Yeah. There's some increase in expenses on the fleet and technical expenses front for offshore. Can you give me some color as to where is it coming from? I can take. Do you want me to take that one? Go ahead. Yeah, go ahead. That's fine. Yeah. Hi, Bijoy Joy. The increase is primarily because we added some new vessels last year. Naturally, when you have new vessels, you're going to have crew costs associated with the vessels. You're going to have spares and maintenance expenses, all of that. That all falls under the fleet and technical, and that's why you see an increase there. The vessels were primarily in the offshore segment. Okay. Got it. Understood. Thank you. Thank you so much. Okay, we have one more question from Adil Rashid with Daman Investments. Please go ahead. Hi. You guys mentioned that the lockdown in India is an area of concern for you, within container shipping. Could you elaborate on sort of the exposure India has to the Maritime and Logistics revenue? Yeah, I can take that. India's a huge trading partner of Qatar. That's a common known fact. We opened up direct routes from India several years ago. When they instituted the lockdown last year when COVID first started, it definitely took a hit on our container shipping volumes and numbers. They've instituted a similar lockdown just late last week because of the huge surge in cases there. That's what we mean by that. Now, how long that's going to last, there's no indication. I think initially they said a couple weeks, but it's hard to tell. It's all going to come down to how well they manage or how well, or not, the COVID situation eases up there. Like I said, it's a concern. India is a huge trading partner. We have ships coming from there on a regular basis. To the extent the lockdown falls into weeks and potentially months, then that would definitely have an impact on our container shipping volumes and profitability. If you look back at 2019, would you be able to sort of mention what was the exposure before COVID? It could give some perspective of, and then maybe year-on-year, 2020, how is it looking? When you say exposure, are you asking how much of our business? How big is, yeah. How big is India as a contributor to your revenue within the segment? I don't know off the top of my head. I don't want to say something incorrectly. The best I can tell you to do is get ahold of me offline, and I'll have to do some research to get that information for you. Honestly, I don't know it off the top of my head. Sure. All right. Thanks. Can I add just a point to that? Operations will not shut down. What will happen is simply a slowdown. There may be congestion, there may be a delay, and that will have an operational cost impact, which is what we had last year as well, and we've managed through that. We're not expecting a complete shutdown, because business will still continue, but perhaps at a slower pace. There will be some congestion, social distancing will be an issue, processes will be a little bit more prolonged and lengthy. Regardless, business will still continue. We don't expect the impact to be material, but there could potentially be an impact. We had it last year, and we dealt through it, and we recovered from it as well. That's the way we're looking at it. We don't expect it to be that severe, but regardless, there probably will be congestions if it happens. If it becomes strict, there'll be congestion, there'll be prolonged processes, there'll be delays for paperwork, social distancing, and that will have an impact. All right. Okay. Thank you. There are no further questions at this time, so I would like to turn the call back to our host for any additional or closing remarks. Hi, guys. This is Bobby Sarkar again. If there are no further questions, I guess we can stop the call now. Thank you, Akram. Thank you, Sami, for taking the time to answer all our questions, and we will pick this up next quarter. Thank you so much. Ladies and gentlemen. Thanks, everybody. Appreciate it. Thanks, everybody. Appreciate it. Thank you for today's call. Thank you for your participation. You may now disconnect.