Gulf Cable and Electrical Industries KPSC : Transcript of the Analysts Conference

Gulf Cables & Electrical Industries Group Co. K.S.C.P

Transcript

Mr. Mahmoud El Mahmoud: Good afternoon, ladies and gentlemen, welcome to you all to Gulf Cables Group's 2022 earnings conference call. This is Mahmoud El Mahmoud, Deputy Investment Manager at Gulf Cables & Electrical Industries Group. Today, we have, Mr. Basel Kanaan Gulf Cables' Chief Executive Officer and Mr. Ahmad Tayem Executive Director of Finance of the Group, on the call with us.

Before we begin, I would like to bring to your attention that certain comments in this presentation may constitute forward-looking statements. These comments reflect the organization's expectations and are subject to risks and uncertainties that may cause actual results to differ materially and may adversely affect the outcome and financial effects of the plans described herein. You are cautioned not to rely on such forward-looking statements.

Gulf Cables does not assume any obligation to update its view of such risks and uncertainties or to publicly announce the result of any revisions to the forward- looking statements made herein. Also, I would like to draw your attention to our full disclaimer in the presentation for today's call. By participating in this presentation or by accepting any copy of the slides presented, you agree to be bound by the foregoing limitations.

We will answer your questions after the management's presentation and in the order that they are received. Additionally, you can send any follow-up questions to our Investor Relations email address. Without further delay, I now hand the conference over to the Chief Executive Officer, Mr. Basel Kannan.

Thank you, and over to you, Mr. Basel Kannan

Mr. Basel Kanaan: Thank you Mr. Mahmoud,

A very good afternoon to all of you.

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Gulf Cables & Electrical Industries Group Co. K.S.C.P

It's a pleasure to connect with you back again after the 2022 results, which we had just declared last week.

I'll take you through some business highlights very quickly. In terms of business

highlights, we continue to see positive momentum with strong financial foundation in the Group. Our revenue and profitability has been moving in the right direction. We are happy and proud that, we could continue where we stopped in the 3rd quarter of 2022 and maintained the momentum, which enabled us to achieve another remarkable year to our Group credit.

2022 was a spectacular year for the Group marked with both our total revenue and sales & contracting revenue crossed the 100 Million benchmark. Our total revenue reached to KD 113 million and our sales & contracting revenue displayed a 49.6 percent increase from year 2021.

It is remarkable that we could achieve this result, in the current volatile global political and economic scenarios; the yearlong unending and intensified Russian- Ukraine war which disrupted the supply chain and caused escalated raw material prices, continuing high inflation rates in key economies: European Union, China, United Kingdom and United States of America.

It was also not different in the Kuwait economy. Lesser award of new projects in the Public Sector, stringent monetary policy of CBK and continuing high inflation rates overcast over the market during 2022.

The project activity picked up in fourth quarter as we forecasted in our third quarter call. However, the total value of awarded contracts of KD 832 million during 2022 is considerably lesser than compared to year 2021, a whopping minus 47 percent, the lowest figure since 2005. This had a direct effect on our sales to local public sector which shows a 47.1 percent decline.

Apart from our Cable manufacturing business, the board of the Group is always looking for suitable investment opportunities to meet the expectations of the shareholders upon them. The results from our investment sector justifies the vision

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Gulf Cables & Electrical Industries Group Co. K.S.C.P

of the Group's board for the diversification of Investments. Dividend income displayed a growth from KD 1.6 million in 2021 to KD 6.8 million in year 2022 and Share of results of associates & joint venture jumped from a mere KD 0.4 million in 2021 to KD 3.8 million in 2022.

With that, I will conclude my comments and leave you with Mr. Ahmed Tayem, to cover the financial performance results of the year in more detail.

Mr. Ahmad Tayem: Thank you Mr. Basel,

Good afternoon to everyone, thanks for joining the call and I hope you are all doing fine.

We come to the financial highlights for year 2022. Here we go first to our performance highlights in slide No. 5

As our CEO stated, the highlight of the year is that we could cross the 100 million milestone in both our total revenue and Sales & contracting revenue. The total revenues, we are up by 39 percent for the year 2022.

The Group's total revenue increased from KD 81.3 million of year2021 to KD 113 million in 2022. Sales & contracting revenue displayed a 49.6 percent increase from KD68.5 million in 2021 to KD102.5 million in 2022

EBITDA decreased by 6.8 percent in 2022, to KD18.1 million, which was KD 19.4 million in 2021.

The Group's net profit also shows a decrease by 19.6 percent to KD 13 million in 2022 compared to KD 16.1 million in 2021 and earnings per share is 62 fils compared to 77 fils in 2021. This decrease to be noticed in the context that in 2021 our net profit was benefited from the 10.8 million gain on bargain purchase of associate which of course, could not repeat again in 2022.

The total assets show an 8.1 percent decrease whereas, total liabilities displayed a 30 percent decrease as of 31st December 2022 in comparison to that of 31st December 2021.

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