Hello, welcome to the Milaha 2022 earnings conference call. I would like to advise all participants that this call is being recorded. I'd now like to welcome Shahan to begin the conference. Shahan, over to you. Thank you very much. Hello, everyone. I wanna welcome you to Milaha's fourth quarter and fiscal year 2022 financial results conference call. On this call from the company's management, we have Akram Iswaisi, Executive VP of Finance and Investments, Sami Shtayyeh, VP of Financial Planning and Analysis. As usual, we'll conduct this conference with first management reviewing the company's results followed by Q&A. I will now turn the call over to Akram. Please go ahead. Okay. Thank you very much. I appreciate it. Thank you everyone for joining Milaha's year-end 2022 earnings call and your interest in the company. I will be starting with our consolidated financial results, then we'll go through our various segments before turning it over to Sami to go over our outlook. As usual, we will end the call with questions and answers. The key highlights of our financial results for 2022. Milaha's operating revenues came in at QAR 3.3 billion for the full year of 2022, compared with QAR 2.8 billion for the same period in 2021, for an increase of 18%. Operating profit came in at QAR 487 million for the full year of 2022, compared with QAR 250 million for the same period in 2021, for an increase of 92%. A net profit for the full year of 2022 was QAR 1 billion, compared with QAR 724 million for the same period in 2021, for an increase of 40%. Lastly, our earnings per share was QAR 0.89 for the full year of 2022, compared with QAR 0.64 for the same period in 2021. Now moving on to our segments and starting off with Maritime & Logistics. 2022 was a great year for the segment and the best in recent memory. If not, the best in a long time. Maritime & Logistics benefited from strong container shipping rates that stayed elevated for much of the year. At the same time, we had significant increase in volumes in our logistics business, both contributed to an overall revenue growth of 26% or QAR 286 million, with variable expenses growing very much in line with the revenues. Despite a decline in shipping rates in the last few months of 2022, we ended the year with a net profit of QAR 85 million or 43% versus 2021. Offshore similarly posted fantastic results in 2022, with operating revenue growing by 26% or QAR 247 million versus the same period in 2021. This growth was driven by increased vessel chartering activities, increased utilization, as well as additional projects and work that we picked up, you know, in 2022 and the years before. In addition to that, we had employment of the lift boat, which was essentially idle in 2021, but it was working in 2022. Overall, you know, Offshore did a fantastic job compared to the same period in 2021. Now, variable expenses increased in line with revenue, and various accounting provisions, impairments that had a negative impact on our 2021 numbers did not recur in 2022. The net income result year-over-year was an increase of QAR 196 million or 167%. With respect to the Gas & Petrochem segment, we recorded a 14% drop in revenue. We also had a pickup of 28% in operating profit versus 2021, primarily due to our divestment of both the tanker and gas carrier assets. The tanker assets in specific performed poorly in 2021, due to low shipping rates. By divesting these assets, we essentially cut our losses. At the non-operating level, income increased by QAR 51 million, driven by the following four factors. Number one, QAR 66 million in additional income coming primarily from our share in Nakilat. A decrease of QAR 10 million coming primarily from our Gulf LPG joint venture. Gulf LPG, you know, has been impacted by low rates in the same period, basically this year compared to the same period last year. We had a QAR 19 million gain on sale of assets. Lastly, we took an impairment on an LNG carriers. Therefore, we had an additional loss or an impact of QAR 30 million this year. Net profit for the segment ended up QAR 70 million or 14% versus the same period in 2021. In our Trading segment, we were able to cut losses by QAR 7 million versus the same period in 2021 by selling more marine-related products and heavy equipment, thus improving margins. Lastly, Milaha Capital, on the investment side, revenue increased by QAR 43 million. In real estate, revenue increased by QAR 11 million coming from the full impact of our villa compound, which was leased in Q3 2021. On the expense side, we recorded, you know, a bad debt provision, QAR 27 million, all of which resulted in an overall operating profit growth of QAR 17 million or 11% versus same period in 2021. On the non-operating income level, however, results came down lower by QAR 85 million from an impairment on one of our real estate properties. Overall, we ended with a net profit drop of QAR 69 million, compared the same period last year. With that, I wrap up the analysis on the segments, and I turn it over to Sami to discuss the outlook. Thank you very much. Thank you, Akram. Starting with Maritime & Logistics. On the container shipping side, we saw rates drop dramatically in the last few months of 2022. They are almost back to pre-COVID levels, where we expect them to stabilize. In logistics, we expect to slow down in the first half of the year. We expect an uptick during the second half of 2023. In Offshore, on both the support vessels and services side as well as the harbor side, we expect a continuation of what we saw in 2022. Longer term, we expect the expansion in Qatar's oil and gas industry to have a positive impact on the segment. In Gas & Petrochem, overall, we expect limited volatility due to the long-term nature of contracts we have in most business units. Our VLGC JV is the exception where performance is difficult to predict due to volatile spot prices. In Trading, we were able to improve performance substantially in 2022, we will continue to work on growing the business and margins. Lastly, Capital, we will continue to focus on yield enhancement. With that, we'll now open up the questions. Operator? At this time, I would like to remind everyone in order to ask question, press star then 1 on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Our first question comes from the line of Nikhil Phutane from CBQFS. Your line is now open. Well, hi. Good afternoon, gentlemen. Thanks for the presentation. Good set of results, especially in context of 2021. Now, my question actually related with, you know, certain key segments. Firstly, in terms of your Gas & Petrochem, what we are seeing is your operating expenses normally varied a lot. Wanted to understand what is the logic behind it, because in fourth quarter, there has been a quite, you know, a steep drop in fact. We needed to understand from that point of view. We can understand gas carriers have been, you know, wind off, but still, it looks quite steep as compared to what we see in the previous quarters. My second question has got to do with, again, Gas & Petrochem in terms of any further impairment could likely be seen. My understanding was, you know, the figures was going to be much more higher. Again, 2023, are we going to be seeing further impairments on vessels? Coming to your Maritime & Logistics division, we see again in the fourth quarter, you know, your shipyard and shipping agencies, our understanding, there has been kind of a loss the way it looks like. What has been the reason behind that? Partly in terms of your provisions for impairment of trade, this was also gone quite high up in the fourth quarter. The reason behind this? Yeah, that is where expecting, please. Thank you. Okay. That's a lot of question in one shot. Let me start with the first one. You said Gas & Petrochem. I mean, listen, the performance of basic Gas & Petrochem is essentially steady with the exception of Gulf LPG, which is subject to certain volatility because we're talking about LPG tankers that are essentially exposed to the spot market. You know, there will be variations from perhaps month, quarter to quarter. That's, you know, and that's really what essentially would cause volatility quarter over quarter. Now, in Q4 2022, we did take an impairment, so, on two of the LNG vessels. If you look at operating profit before impairments, it's relatively steady, and that impairment impacts primarily the profitability. This is really the main impact on our Gas & Petrochem. What was the second question? Yeah, I mean, in terms of your, you know, you mentioned about impairments actually last time, I suppose I remember. Impairments, you mentioned will not be there likely in, you know, further going around. Still we are seeing around QAR 18 million which came up in the fourth quarter. Wanted to know what is it and, what to expect in future, sir? Sure. Sure. I mean, listen, again, In our previous calls, we've said we're not gonna take, you know, we're likely not gonna take large impairments like we've done in the past, but there will be impairments to adjust the market conditions. Now, the impairments we took are on the long-term LNG contract, on LNG vessels, there's a long-term contract. You know, the impact of that, again, when we value those LNG vessels because they're fixed on long-term contracts, is we use the DCF. The various assumptions that go into the valuation, including operating costs, financing costs, when do we have to refinance the vessels? There are a host of different variables that go into that calculation. Naturally, as per IFRS standard, we have to make adjustments accordingly. Again, we said we're not gonna take significant impairments, but we also said we will take them in accordance with IFRS, and that's exactly what we did. Do you believe that I mean, the future cash flows have been affected, and that's where exactly this impairment has come into picture, right? Well, that's what I just said. We use DCF, we have to use cash flow. Yeah. these are the contracts. It's a long-term contract, so it's a DCF valuation. Okay, okay, fine. Yeah. Of course, I mean, wanted to understand in terms of, you know, what has happened on your Maritime & Logistics. I mean, the run rate of around, say, QAR 350 million, you know, per quarter has been quite. I'm not gonna be saying very steep, but you know, it has come down to a level. What has been the reason behind it? You know, in terms of your. Let's start- Yeah. Let's start with one question at a time because too many, I will forget the question if you keep going on. As it relates to M&L, I think we've clearly said that container shipping rates that have been experienced by container shipping industry are unprecedented. This year and last year, container shipping markets globally have enjoyed, you know, significant profits, phenomenal rates. The gravy train has run its course, the rates are coming down. We started experiencing that in the fourth quarter of 2022. The drop, you know, that you're seeing, we talk about Q4, has largely to do with the fact that container rates are coming down. This is not a phenomenon that's unique to us, but it's also a global phenomenon of everybody, who's in the same business is beginning to see, you know, container rates coming down significantly. Okay. I just wanted to clarify. I mean, I can understand that, but in fact, container shipping actually has moved up, suppose I'm not mistaken, but your shipyard actually, I mean, is it right to say that it has shown a loss, something like this, on your shipyard business for your fourth quarter? Well, the shipyard, the shipyard is going through a repair and upgrade. There's a transition period right now that we're going through. Again, we've undertaken a major upgrade initiative for the shipyard to be able to accommodate market needs and to be able to grow the business in the future. Again, we're in a transition period where essentially the shipyard is going through a major upgrade. You're talking about the floating dock, which is, which where you were looking at it. I think, that's where exactly you mentioned that it will be. Floating dock, and again, and it's not a dock, it's something. I'm talking also about upgrading the shipyard as well. I mean, indirectly, that has given a huge loss the way it looks like for the fourth quarter, right? What's that? I can't hear you. Sorry. Repeat that question. That has, there is contribution to your operating losses in a huge way for, I mean, the fourth quarter. Again, part of it is a slowdown in the business because we are making those upgrades right now. There's work that's being undertaken right now. When exactly we could be seeing, you know, the fruition of all this going forward in 2023? We're gonna see some in the by the end of next year. This is a major initiative. That's gonna take a little bit of time. Okay. impairment on your trade- Upgrades. Yeah. Lastly, I mean, in terms of your trade receivables, I mean, there has been some impairments. I mean, you know, what has been there? I mean, it's not in line with what has been in the past. Any, can you give us some ideas what has been the reason behind it? Listen, we use, you know, an ECL model, I have, as per IFRS standards, so it adjusts to the market. If there are delays in the payments, you know, the provisions go up higher, so nothing major. Again, last year, there's a lot of business, there's a lot of growth. We also have projects, long-term projects, and there are some delays in the payments on those projects, but nothing really, material right now. Okay. Honestly, the reality is. Let me add one more thing. We are actually much more conservative in the way we look at provisions. Our model is quite conservative. We usually take a much more conservative approach to the way we look at receivables and allowance for bad debt. This is again, this is something very standard with them. We don't like to be very aggressive, but we're typically very conservative in how we look at the receivables. Okay. lastly, I mean, a good set of results of Milaha Trading actually. can you just, you know, make us explain on how that has been contributing in terms of 2022 going forward in 2023, how we foresee that? Well, listen, if you look at Milaha Trading, it's a small business unit. Contribution to the bottom line has been insignificant, right? Right. negligible. We've been working on restructuring this business unit. Yeah. Potentially maybe looking at, you know, merging some, certain business units with others to be able to gain, cost efficiency and perhaps exiting certain businesses and really focusing on, you know, high margin business. These are strategic decisions that are being evaluated and will be taken in Q1 2023, as it relates to this business. Okay. Thank you, sir. Thank you, sir. Thanks a lot. Thank you. Our next question comes from the line of Faisal Al Zaabi from NBK Capital. Your line is now open. Thank you, gentlemen, for the presentation, and congratulations on a strong year. Thank you. Just a very basic question on how do you expect things to pan out for the upcoming year. As you've kindly mentioned, the level of container and shipping rates that we have been seeing for the past two years due to COVID are abnormal. Is it a fair assumption to say that we shouldn't be expecting any earnings growth this year given that the section represent the largest of the pillars, business pillars? Okay. Thank you very much for the question. You know, when rates started going up, you know, we knew that this trend is not sustainable. There's been heavy investments in basically Milaha Offshore, which is gonna be one of the main growth drivers in the future. You know, I think you're well aware that there's significant amount of oil and gas activities happening, not only in Qatar but also in the region. You know, we've got a good pipeline of work and opportunities coming up in this segment. As you can tell from the profitability, it continues to improve. In our view and from our perspective, you know, there's a lot more potential in that segment, again, in terms of how we're operating the business but also in terms of the market that we're serving. We are very well-positioned again in Qatar to be able to take advantage of those opportunities. I think it's everybody is well aware that Qatar is really The oil and gas sector is one of the really, you know, promising, let's say, sectors or areas of growth in Qatar for the next few years. We're well aware of the fact that, and we anticipated that revenue is gonna drop on container shipping, but we've also been making investments to replace that revenue and continue to grow the business in the future. Okay. Thank you. Again, if you would like to ask question, press star then 1 on your telephone keypad. Our next question comes from the line of Jagdish Thanvi from Avalon Global Research. Your line is now open. Hi. Thank you. Thank you for the call, and thank you for the good results. Yeah. I have one question. In the Trading business, I mean, the company has made profit for this quarter, whereas it has been incurring losses. Can you tell me what was the reason? Like, is it due to the prices or due to cost cut down or like what exactly? Listen, as a company, we are really focused on... we're in a business that's, you know, globally quite challenging, right? It's a business where you have to leverage technology, where you have to look at how you run your business on a day-to-day basis, your ability to really deliver good service, as fast as possible, and as efficiently as possible. We really have taken a much harder look at our business and started going back to basics. Say, "Okay, how do we deliver the service? Where can we cut costs?" We've been doing a lot more of that and trying to focus on outcome as quickly as possible and as efficiently as possible. You're beginning to see some of those results. A big focus on, you know, profitable growth. That's an area that we're focused on. Growth just for the hell of growth is not really what we're looking for. Effectively, we're looking at profitable growth. This is one of the things that we started looking at in this business. As I mentioned earlier, there will be some, you know, certain product lines that we may just decide to shut down and really focus on where we can make money. You know, we have choices, and we're beginning to make decisions, and really, you know, execute on some of those choices. This is exactly what you've seen. We have a, you know, honestly, we've got a good management team, the guys who are running this business, especially in a very difficult environment, 'cause as you're well aware, this business has historically been tied to infrastructure spending in the country. We've benefited like any other company that's in the same line of work, you know, on the back of strong infrastructure spending, selling of, you know, trucks, equipment, construction equipment and whatnot. This basically business is not as attractive as it used to be. A big part of our focus is focusing on serving vessel owners, which is what we are good at. We are historically and we still are a vessel owner. Ship chartering, supply chain services to vessel owners is an area we're gonna focus on more and more, because we think we can add value in that space and make money at the same time. I hope that answers your question. Hello? Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. I got this. I got this. This is one more follow-up question. In the Offshore segment, I mean, the company has recorded a tax expenses of around QAR 2.7 million-QAR 2.8 million, which was not there in the last two, three quarters. Is it just a one-off item or like it is going to be recurring tax expense in near future as well? If you can give me some guidance on the same. On what? On the tax expense? Yep. Or in the Offshore business, yeah. it's one-off items, right? I mean, 'cause, you know, if you... You know, we've had international operations, all right. We had the liftboat working in Nigeria. You know, we have legal entities in Europe and Asia. There's always gonna be some degree of tax exposure, but it's not material. I don't think. Again, as we continue, if we expand outside of Qatar, there will be tax exposure, of course. I can't tell you if it's not gonna be recurring or not because, again, this is an expense that we have incurred this year. If we expand, if we start, you know, operating, let's say, outside of Qatar, there could potentially be exposure, tax exposure wherever we operate. I think you're well aware that, you know, global minimum tax is being implemented globally, even in the region. In the long run, there will be tax exposure coming up. This is not going to be recurring, right? In the near future. What's that? This is not going to be a recurring expense in the near future. Again, I can't answer that question because if we take an action on our business this year in somewhere outside of Qatar, there may be tax exposure. We may have to pay taxes, but this is a one-off item. Okay? Okay. Businesses do pay taxes if they operate in certain jurisdictions. Okay. Okay. Got it. Thanks. If you would like to ask question, please press star one. Our next question comes from the line of Nikhil Phutane from CBQFS. Your line is now open. All right. Thanks. You know, I mean, it just went through all the questions which had been given across. One, of course, which had been mentioned in terms of outlook for 2023. If you don't want to specify in terms of how it will pan out, you know, 2023 itself, but given the fact that, you know, we are seeing rates still not very great. I mean, very lukewarm and it indirectly means the first quarter, especially for your, you know, certain segments like Offshore and logistics could be under pressure. Do we expect that, you know, I mean, can you give some through light in terms of how it will be panning out for the first quarter, especially given the background that, you know, everything is becoming very challenging across the world? I'm talking about recession, but slowdown generally. Okay. Well, listen, I mean, container shipping, as I mentioned, rates are coming down. We will see an impact on container shipping business right now in Q1. Logistics business, you know, done very well in Q4. Volumes have gone up. We expect a dip in Q1 as well. You know, obviously in Q1, we typically have, in terms of our results, we have, you know, income or dividends pick up from our investment portfolio. You'll see that pick up in Q1. On the Offshore side, even on Gas & Petrochem, we are looking at a number of tenders and opportunities, within Qatar and even certain opportunities outside of Qatar. You know, depending on when we're able to win those tenders, potentially looking at asset acquisitions as well that will add a substantial top line and bottom line, you know, to Milaha's numbers as well. But Q1, I think will be a bit challenging, but we expect things to start improving in Q2 all the way on to Q4 as we execute on a lot of these tenders that we have on these asset acquisitions that we're looking at. Again, I think Offshore, and as I mentioned again before, looks very promising. There's a lot of upside that we see in the market. We are a leader in Qatar in the Offshore space. We have a large fleet and a strong track record with oil majors. We're very well positioned to take advantage of these opportunities. Again, at the same time, listen, at the management level at Milaha, we recognize there's a lot more that we can do in terms of operating, you know, how we operate our business. Again, I think this is the, a theme globally, digitization and doing more with less, improving processes, removing complexity. We are going back and looking at the way we run our business. How can we do things faster, more efficiently? A key theme for us is doing more with less. We're looking at, you know, essentially cost-cutting, digitization, which in my view go hand in hand. You know, your ability to digitize your business allows you then to build scale really into your business. Going forward, it generates more incremental improvements to the bottom line. It's a really big focus for us this year, more so than I can remember in the past 10 years, to be honest with you. You'll see much more on that this year, and we'll try to disclose as much as we can, in the next earnings call on what we really have done. Again, digitization, using technology, we do have a lot of tools at our disposal, but there's a big emphasis all the way from the top at the board level to really look at how we run our business to become much more efficient. Yeah. I mean, we understand that. I mean, you know, digitization, of course, will help you in cutting down the cost and other things. Since you mentioned about Offshore and you mentioned about LNG, I just wanted to understand, given the NFE, you know, South project, which is now I hope is started to design stage and after that, maybe it'll start hopefully. That's what the banks are saying by the mid of 2023. What do you foresee for QNNS from that point of view? I mean, is there something, some kind of tie-up which could help given the fact that, you know, Qatargas is also there in, up and running for the gas supply? How much you could be seeing that getting attribution, say, in the second half of 2023 for your Offshore business. Can you just throw some light? Unfortunately, we can't disclose that information. I mean, again, there's a lot of tenders in place and there are a lot of discussions, and we can't disclose anything to the public at the moment. Whether we win the tender or contract, we'll be able to disclose it at some point. Again, right now we can't really speculate on our win rate or success rate on these tenders. Clearly, as I mentioned, we are a national champion here in Qatar. We are supportive of these initiatives, and the oil and gas activities. We're working actively to really, you know, to win these tenders and grow our business. 'Cause we're what... You know, guys, as I mentioned, we're very well-positioned. We have the fleet. We have the know-how, the capabilities, so we're very well positioned to be able to win that business. Disclosing numbers, I can't disclose any numbers to you. Okay. I appreciate it. Much appreciated. Just the last question actually on your biggest division, Gas & Petrochemical. In terms of your, you know, margins has been quite nicely maintained over the last, you can say two to three years. What do you foresee going forward? I mean, this kind of margins is, you know, quite, I mean, very difficult to look forward to. I mean, going forward, do you see that? I mean, in 2023, these margins could be coming down. Listen, in all honesty, I mean, we, you know, operating costs in general are going up. You see that everybody's struggling with inflation and cost to operate. We are in that space looking at various opportunities to grow that business. We are looking at investing in maritime assets, but very much focused on assets with long-term contracts and predictable cash flows. The margins are, I can say they are sustainable, and I don't expect a big drop in those margins, but in the long run, we are looking to grow that business even more. We've exited certain segments of that business which are volatile. Tankers is a very tough business these days. It's very difficult to make money. you know, best way to make money in tankers is really by flipping assets, and we're not in the business of really flipping assets. We're very focused on cash flow. We are looking at assets and asset acquisitions potentially that can add more, more profitability to the company and really focused on cash flow. Cash, cash. Just. Okay, fine. Just one small question, since you mentioned about your, you know, vessels, long-term contract. Can I have an idea about what is the average rate now for your vessels, average tenure for your LNG vessel? For which vessel? For your LNG vessel. LNG vessel? Yes. We have. What's last? We got nine and 11. Okay. I mean, I'm talking about average tenure of the contract. Is it nine-11 years? That's what you're saying? For this segment or for all of the segments? Okay. For this segment or all of the segments? I mean, we have a lot of different types of vessels. No, I'm talking of your- Our vessels are very complex. I'm talking only for your Gas & Petrochemical. Yeah. Well, listen, we have. If you look at, we have, let's say average from seven-10 years. Okay. seven-10 years. Okay. Thanks. Really appreciate it. Thank you. No problem. No problem. At this time, there are no further question. I'll turn the call back over to our speakers. Okay. Well, thank you very much, you know, for your interest in Milaha. We had a great year, and, we look forward to a fantastic year in 2023, and I guess we'll see you in Q1, 2023 earnings call. Thank you very much. Have a good weekend. This concludes today's...