Good afternoon, ladies and gentlemen, and welcome to Spinneys' Q1 2026 earnings call. My name is Jean Jacque van Zyl, Investor Relations Officer for Spinneys. Joining me today are our CEO, Sunil Kumar, and our CFO, Mukesh Agarwal. Thank you for being with us this afternoon, and our thanks to Closir for hosting today's call. Before we begin, I'd like to draw your attention to the disclaimer on slide two, which contains important information regarding today's presentation and discussion, particularly in relation to forward-looking statements. Today's call will follow a familiar structure. Sunil will open with our business overview and an update on the execution of our strategy, with particular focus on how we navigated the regional challenges that shaped Q1. Mukesh will then walk you through the financial highlights in detail.
Sunil will close with our strategic focus and 2026 guidance, after which we will open the floor to questions. Before I hand over, I want to acknowledge that Q1 2026 was an extraordinary quarter, one that tested our supply chain, our teams, and our operational agility in ways we had not anticipated. I am pleased to say that Spinneys responded with resilience, and the results we are presenting today reflect that. We look forward to taking you through the detail. I will now hand you over to our CEO, Sunil Kumar. Sunil.
Good afternoon, everyone. Thank you for joining earnings call today. As Jean mentioned, we had a very eventful first quarter. It represents what the numbers, what you see now. The revenue grew by 12%, we are happy to see the like-for-like sales growth also was at 7.4%, and EBITDA margin is in 18.2%. It is an industry, if you are considering supermarkets, margin is still intact. e-commerce is growing faster than brick-and-mortar stores. In fact, it is 34.9%. Profit after tax, it is AED 87 million, despite the uncertainties and the month of March we have faced, still we grew by 2%. Of course, cash and bank balance is AED 871 million.
Now two, when I measure our business, a couple of metrics is very crucial for retail, particularly a food supermarket like us. One is transaction count, which is crucial to see the customer's trust and confidence is still with the brand, what the value proposition we offer to the customers, and they are happy with that. That is an indication normally you see that's a transaction growth. Other two pillars which actually carries this brand is our fresh food business, which is almost grew from 64% to 64.6% is a growth which is visible. Another one is very competitive range of products with quality which we offer, the private label, and that's also moved from 44.2% to 46%.
These three top-line metrics on the chart shows the confidence and trust of our customers, and we continually delivering them what the customers are expecting from us. The other indicator for the metrics of the business is also an average basket, and the basket also grew from AED 89.8 to AED 92.9, which I'm very happy that to see the transaction and particularly basket size growth. We had 81 stores last year, 12 months, Now we have 93 stores. Of course, as I mentioned, e-commerce is growing faster and from 15.6 to 18.8 within one year span. The challenge which everyone has seen, known, and through the media, as a supermarket chain like Spinneys, we face more critical issues because of the products which comes to our store.
Availability is measured from whenever the customer comes to the store, availability is measured. If they come to buy something, it is the responsibility of the business to give the product to the customers. We manage that crisis through different approach. We anticipated to a certain extent a bottleneck of supply chain. We navigated around that crisis through pivoting air freight immediately, whatever the product which we can bring on getting to the shelf. Also looking at other option, one was the road freight from the U.K. or from Europe through the road and bringing those products into the UAE. Couple of things has affected our revenue. One, if I split that into three, the store formats. One, we have mall-based stores.
We have Dubai Mall, for example, Dubai Mall, Nakheel Mall, Marina Mall, mall-based stores. The other stores formats are in business towers, where we are catering to a lot of office people. The other one is community centers. Now, community stores did extremely well in this crisis, I should say. More stores as well as office-based stores because of remote working as well as distance learning had an impact on. Of course, the tourism is the biggest major impact on the mall stores. Luckily, as a business, we have a right ratio, 80%, 88% of the business is still in the community centers and in local neighborhoods. Those stores did well compared to the malls as well as business towers.
The crisis management, as I mentioned earlier, as soon as the crisis started, disruption started, the air was not possible, and within two days to three days' time, we got an opportunity to tie up with Emirates as well as Etihad, and there are some chartered cargos were coming from different countries, and we managed to get those products onto the shelf. The ports was congested. We were looking at Jeddah as an option, Oman is an option, Khor Fakkan is an option. We were looking at all these three options. The end of voyage, which is a vessel is coming, and they can't go to Hormuz through, and those voyages were going through, going to India or Sri Lanka or in African countries, and they were offloaded the end of voyage.
In March, we normally in a month, we take 180-200 containers, in March, it was almost a 62% drop in containers coming to UAE due to this crisis. We have to ensure those products range, which is crucial for the business, is available for our customers. We were focusing on credential range and how can we bring those credential range into the shelf, we were using air freight and road freight at the same time for getting things or for customers. I should say we are proud that we reached into an 82%-88% of the availability in the month of March, we continued improving to April and May.
I should say that the 82%-88% in comparison with normally any given time, it is a 90% is the availability. I think as a business, we have done extremely well to get products on shelf. The other impact of the crisis is the cost, definitely. A container cost has gone upwards from $3,000 reefer container to $25,000, from $3,000 to $25,000. As we know, we are a responsible retailer. We understand customers' behavior, and we have taken almost 40-60 years of confidence of the customers to get the loyalty into the brand, and we don't want to one day because of this crisis, we don't want to knock that loyalty and the trust and confidence with the brand.
We took a deliberate decision that we don't want to pass the cost of freight into customer, into the product, particularly on essential products range. Essential product we identified. Also, we followed the government guidance, but we were extra cautious and careful that we will not be passing that charges into customers. Therefore, you might have seen that 120 basis point compression on the margin, and we are looking at the best cost-efficient freight inwards, as well as utilizing our supply chain efficiencies, utilizing our sourcing offices, as well as our production unit here, and then looking at the ingredients where we can bring from alternative sourcing and bringing to a finalized products from our factories in UAE.
Now, I will pass to Mukesh to take you through the numbers, how we have achieved through this crisis time, as well as January, February, of course, it was a wonderful month, so I should not be complaining about it. March is was a crisis month, but we have navigated around it. The numbers, what Mukesh is going to explain, is a reflection of these three months. Mukesh?
Yeah. Thank you. Thank you, Sunil. Good afternoon, dear investors and analysts. Very happy to be present here, presenting the resilient results for the first quarter, despite the fact that the crisis started on 20th February, we have been navigating through the crisis since then. As Sunil mentioned, each of the steps taken by the business and by the management in ensuring that we are delivering food to the platter of our customers and making sure the products are available. Despite all those challenges, we have been able to deliver some good results.
You can see on your screen our revenue has grown from AED 906 million last year to more than AED 1 billion this year, almost a growth of 12%, which is again a combination of like-for-like growth of almost 7.4% on a year-on-year basis. The gross profit margin is more than 40% at AED 406 million. Last year, it was AED 374 million, a growth of 8.4% year-on-year. Our adjusted EBITDA still at 18.2%, despite the fact that there were significant cost pressures, we have been able to keep our EBITDA stable at AED 184 million, a growth of 1.2% year-on-year. Our profit before tax has been stable at, again, at AED 101 million.
Last year it was AED 102 million. A slight dip of 0.7% despite the fact that there was a significant pressure in the month of March on the freight and other elements of our product costs. Our profit after tax similarly has grown from AED 85 million to AED 87 million in the current period. Our free cash flow conversion has been 63%, equivalent to AED 78 million, which again gives us a very strong footing to pay stable dividend when it comes to second quarter, as we promised, and also to invest in our future growth of the business. Net debt is AED 130 million.
If you look at this number, this has been growing, going down significantly year-on-year because of the fact that we have been able to generate cash from the business. We generated AED 71 million worth of cash as of 31st of March. The balance on 31st of March. If you reduce from that the net lease liability of around AED 1 billion, you arrive at AED 130 million. You'll see our liquidity position is strengthening on a quarter-on-quarter basis. If you were to dissect the revenue further, you'll see that our like-for-like growth is 7.4% despite the headwinds that we faced in the month of March. Our overall revenue growth has retail sales has grown from AED 894 million to more than AED 1 billion.
Like-for-like is still 7.4% in quarter one. If you look at dissection further, almost 7% growth is contributed by the new stores. Six existing stores are around AED 65 million and AED 47 million came from new stores, which is almost 5.2% of the total growth that we get and that we got, and we lost around AED 3 million from the store that we closed. We opened 30 stores in the period, and we closed only one store. This is phenomenal considering the fact that despite all the challenges, we have been opening new stores. We opened three stores in the first quarter itself of 2026.
We also opened one store subsequent to the period end in JBR Marina. The fact that our value proposition continues to remain the same and our customers continue to like our products. We have been able to increase our sales by increasing our fresh sales and private label penetration by 0.6% and 1.9% respectively. Our GP, you can see overall GP margin has been quite healthy due to the fact that our private label has increased, our fresh participation has increased. Of course, there was impact in the month of March due to the fact that many of our containers were stuck in the sea and the transit.
There was a delay in transit, delay in ETA in terms of the timing that we received the containers from. The cost, there was charges on some of the containers. We had to pay the higher freight costs, especially the air freight costs, which went up as in the range of 37%-55%, depending on the origin. As a result of lower sales when, due to lack of tourism and school holidays and when people started working from home, there was impact on sales. As a result, there was higher wastage due to in the first few weeks of March.
Of course, we had to make some inventory provisions to ensure that whatever was, the products lying in, lying in the seas, if there was anything, chilled products, we made some provision on those line items so that we don't take a bigger hit going forward. Overall, the GP margin has gone down by 1%-1.2% as a result.
Despite the fact that our GP margin compressed by 1.2%, you can see our profit before tax has compressed by only 120 basis points, which is 1.2%, mainly because of the fact that the moment the war started, we started looking at each of our cost elements on the P&L and making sure that we limit our discretionary spending. Also at the same time, of course, because of the fact that we have depreciation rental payout, which are fixed in nature. Wherever there is a turnover impact, there is a saving, at the same time, depreciation rental continues to remain fixed in most of the cases. Profit before tax has gone down by 120 basis points.
Still we are at 10% profit before tax on revenue. Our adjusted EBITDA, mainly because the fact it went down to 190 basis points because our GP went down to 120 basis points. Also, there was an exchange loss of around AED 5 million, which we booked this year because euro and GBP on a period on period basis, they appreciated against the dollar. There was a one-off impact which came in the quarter. You can see the EBITDA erosion is slightly more than the GP or GP erosion. The profit erosion, after considering the disciplined cost management, the erosion is only 120 basis points. Similarly, profit after tax has decreased by 80 basis points.
Our effective tax rate has been 14.4% as compared to 16% in the last period. As a result, you can see our profit after tax has gone up from AED 85 million to AED 87 million. I already discussed this free cash flows slide. Our conversion is 63%. Our net debt evolution, you can see it went down from AED 387 million to AED 130 million net debt. If you exclude the lease liabilities, we are only the net debt is only AED 866 -, which is effectively our cash balance, giving us a very, very strong platform to fund our growth, not only locally, but investing in new opportunities and investing in our future expansion plans in the Philippines, Kuwait, and Saudi Arabia.
I'll pass it on to Sunil to discuss more about our outlook and the focus for the remaining period.
Thank you, Mukesh. As I mentioned earlier, our focus now is to ensure we provide product on shelf on timely basis and looking at what the best way optimizing the route and the voyage as well as the freight. That's what we are paying attention to. The second one is, of course, we will be going ahead with the store opening as we have planned, as we have given the guidance, and we will be opening the stores. In this mid of the crisis, in the mid of March, we opened a JBR store, which actually showcase our confidence in the market as well as what we are expecting out of a new store openings into the business revenue. Spinneys e-commerce, we are also looking at the marketplaces.
We are adding more stores to where a specific customer-based marketplaces, and we are allowing those customers to get products from our stores where they don't have any presence. We will be opening our first store in last quarter in Philippines as well as Kuwait. We are looking at and we have identified the location in Avenue Mall as the first store. We will be building that store from next month onwards. Hopefully, we will be opening on first quarter of 2027. What is happening?
Michael, the slide just seems to be stuck there. The last slide is the guidance slide, which Sunil can just talk through. Then we'll go straight into Q&A.
The guidance. Sorry, the slide is not moving, unfortunately. It is not deliberate that we don't want to show the slide. Some technical glitch, I guess. We haven't changed the guidance which we have given. My view on why we haven't changed the guidance because we will be very responsible if we change the guidance, and we will do as a business, we will do everything possible to achieve the guidance which we have given in the beginning of the year. Yeah, it came now. We will stick to that guidance. Because of the issue we are not sure about what may span around for the coming months.
What is in our control, we are focusing on what is in our control, which is, how can we ensure the supply chain optimization? How can we look at the capital deployment if it is not necessary to get a return on investment immediately? Which are the areas where we can alternative sourcing for bringing the ingredients for a finalized products in our factories? We are also looking at the sourcing capabilities wherever it is appropriate to get the products on shelf. Those are in our control and we are looking at in a efficiency mode, and we will be bringing those efficiencies which is in our control, so we haven't changed any guidance. We will be opening for the questions and answers now.
We will be in a position to answer you a much more clarity.
Thank you, Sunil. We'll now hand over to Klaus to moderate the Q&A for us.
Thank you very much for the presentation. Now we're moving to the Q&A part of the call. If you're dialed in via the telephone, please press star two on your keypad. That is star two on your keypad. You may also ask a voice or a text question if you are dialed in via the web. Okay, we have a text question from Mr. Nikhil Arora from Abu Dhabi Pension Fund. What is the like-for-like sales and GP margin in March alone for us to isolate the impact of the conflict? Did Spinneys increase prices since March beginning? If yes, by how much on average?
I started my statement starting it is an eventful first quarter. Why was it an eventful first quarter? Because of the January, February, it was a continuation of what we have been, what we achieved on the last quarter of 2026. In the March, suddenly we saw three days of an upscale, panic buying, rather I should say. The shelves were empty. It is normalized within one week time. The sales pattern got normalized. The issue when we were facing on those three, the first week of March, was to get the product onto the shelf, particularly the stock which we have got into factory production as well as the stock holding what we have it in our Qusais warehouse. That was getting depleted, and we were looking at an alternative freight, as I mentioned.
We are looking at the credential range of products, and we are bringing those credential range. The cost was increased, which we know. The freight cost has increased from 71% almost on freight, air freight. Other two, as I mentioned, from AED 1,500 cost moved into $15,000-$16,000, and AED 3,000 of reefer moved into $25,000. It was a cost pressure, but our objective and the purpose to ensure that we will give the customers an availability, and therefore, we have achieved 82%-88% of availability. I don't have a specific March number to give you, but we have actually, I mean, the, it was a growth, as I mentioned, on 26th last quarter, the growth was continuing.
Then March, when the incident happened, three days, which was not a normal buying pattern. Then it is normalized, and thereafter, it more or less stabilized. My take, because of the availability issue, which we had more, but the customer confidence and the basket you have seen, that was still continuing. That's one of the reasons why I said that. The metrics which we measure was predominantly is on our customer traction, customer count, as well as the basket expansion. Two particular core strength of Spinneys is the fresh food as well as private label. You have seen that growth, and that growth was also reflective in the month of March.
Okay, thank you very much. Just once again, star two for any questions. Our next question is from Dr. Javad Vaseghi from VASRO. Please go ahead, sir. Your line is open. Hi, Mr. Javad. Your line is open in case you are muted.
Could you hear me now?
Yes, we can hear you. Please go ahead.
Okay, awesome. Again, hi, good afternoon, everyone. I'm Javad from Frankfurt, and thank thank you for taking my question. Of course, congratulations on the resilient Q1, and especially given the March operating backdrop. Given Q1 was not only store opening story, as you mentioned, like-for-like sales grew around 7.4, and also online participation reached around 19%. We had also the fresh and private label penetration both in the higher numbers. The question is: How should we read the 2026 growth bridge, specifically more as traffic and in-store roll-outs or increasingly as mix and channel quality supporting margins?
Thank you for the question. I wanted to reemphasize, as I mentioned earlier, there are three format stores that we have. One is mall-based, second one is office-based stores, as well as community centers. The good thing is 88%, which we have mentioned in the press release, 88% of our stores sits in the community centers. Once the offices are started functioning naturally, it's almost now three weeks, and there was an disruption in between, and the school started functioning normally. We have seen a same pattern where we saw it in January and February. The biggest chunk of the revenue drop is still on mall stores, which is a bigger size of the stores, of course, but that is purely based on the tourism.
If you ask me, those stores, what we have taken a special precaution to ensure that that is not, it, that is not affected by the cost or additional wastage. These are the two things normally happens as store doesn't get a revenue as expected. One, the wastage will normally go up and the staff cost, which are in our control. The other, the rent stays as it is. Electricity and water, the consumption, which stays as it is. All other small factors we consider, and we are looking at it, and we have taken into consideration those cost-efficient model. We worked from, I should say from March itself, we started working, which the result is visible in the month of April as well as in the month of May.
Mm-hmm. Mm-hmm. Thank you so much. I appreciate it.
Thank you.
Thank you.
Thank you very much. Have a few more questions coming from the text. Next one is from Mr. Mike Sell from Alquity. Do you see any impact in community stores from expats returning to their home countries, so there are less consumers?
I'm sorry. I didn't get.
Do you see any impact in-
One minute. Let me Sorry, let me read this. Yeah, I can see that.
Yeah.
Do you see any impact in community stores from expats returning to their their home country? Yeah, it's, it says two, within the community centers, we have built in actually in three community stores. I said three phases, which you understood it. The community centers, we have local community centers which is actually growing despite March disruptions. It is growing those community centers purely based on locals, Emiratis, which is growing double-digit, I should say. The community centers were European-based and the school neighborhoods, which has a drop because of the school, distance learning. Since the distance learning started, it had a drop.
As soon as the school started operating, we have seen that, coming back, not to the extreme, but we assume that many of the families probably not here, many of the people might have moved. We can see that the gradual growth and the transaction into those stores coming back from April onwards.
Okay. Thank you very much. Our next question comes from Mr. Shankar from FIM Partners. Thank you for your call. Can you please talk about the supply chain costs in April and May? Have they started to normalize compared to March?
Shankar, in fact, the cost is still as it is, which is visible for anybody. The cost hasn't dropped down. What we have done is we are looking at the container mix, and we are looking at the ticket size products, whether we can put together and bring that cost into an average single unit into an acceptable manner. The other thing, luckily, we have our, as you know, our Spinneys' sourcing offices across, and we have our own factories. We are building the ingredients wherever we can bring it in a way, whether it can be by road instead of air and instead of sea, whether we can bring it by road or air. Why it is an important factor?
Normally a sea container to get onto the shelf, it may take from different countries, but normally take 25-45 days, whether it is Europe, U.K., or Australia, it will take normally 45-60 days. U.S., it will take normally 45 +, 50 days. You are actually losing an opportunity to get onto the shelf, and we are looking at that option by air as a credential range.
We are looking at if it is not a price elastic, commodity essential range, we are looking at whether we can pass that cost into those SKUs, which we are looking at without pissing our customers off. We are managing as a basket together. We are not specifically. It will not be visible for a one SKU level, but we are looking at a category as well as a subcategory level inflation.
Okay. Thank you very much. Our next question is from Miss Elena Jouronova from J.P. Morgan. Please go ahead, ma'am. Your line is open.
Yes. Thank you so much. On the gross margin in Q1, I have a question. Can you quantify, what was the drop related to the inventory provisioning, and what was the impact of price investments?
Hi, Elena. See, the impact is coming from there's a slight decrease in input margin due to the fact that there was a increase in cost of the freight and also because of some of the wastage since the lower sales base in the month of March. Once there was impact on the sales, especially in the mall stores. You see an impact of on the wastage which goes up. Also for all the chilled products which were on high seas, and we're expecting delay because as they near expiry, we also made a provision in the books.
There was a net impact, if you look at the balance sheet to balance sheet movement, from 25th December to 21st of March, which is clearly reflected in the financial statements, which have been shared yesterday. The impact is around AED 7 million on the inventory provisions.
Okay. AED 7 million on inventory, and then the rest, cost of supply chain costs versus price investments, like roughly equal, or how can we think about it?
Yeah. Then also, as I said, also, increase in wastage on the fresh products because if there is less sales on the fresh product, then they have to go to the wastage.
Yep. No, that's clear. Am I right in thinking that we've seen the biggest magnitude of your gross margin pressure in Q1? Because from Q2, we're seeing normalization. You know, the provisioning was already there. You've adjusted the range. Am I right just directionally thinking that we've seen the worst for your gross margin this year?
Elena, in the month of March, there is a mix of category shift. What I meant by that is your meal solution is a high margin negative. For example, if you are in DIFC, we used to have nearly AED 100,000 sales per day, and that moved into a AED 15,000 sales. Likewise, Terminal 1, DAFZA, [Pfizer], as well as some of the Wafi. Wherever we have a higher percentage of revenue coming from meal solution, which normally gives us an above 50% - 60% margin. That mix changed because, of course, the offices are not working and that there are offices completely stopped bringing people into the offices, et cetera. It has an effect.
It is not one particular reason of cost and a price cost increase, but it is a mixed change, that's what we saw. Second, in March, as soon as the biggest panic buying happened, after that, the customers became a bit of a behavior change because they are looking at it, at the essential products rather than a high margin accretive products range. They were hesitant to buy. I understand why, because that is a bit of an crisis time. We have seen it in the past, exactly the same pattern. What I wanted to say, in from April onwards, it has started coming back and we have seen the higher ticket size products, which gives us a higher margin, has been working well since, say, second week of April onwards.
The other thing, one more thing I wanted to say, some of the stores were, it was dependent on the tourism-based boats. You know, they used to come to the stores and buy high products for in Marina. I am talking about Marina Mall as well as Marina Spinneys, Golden Mile. There are four or five stores which was purely on the bulk buying for the boats, and that also completely stopped. I was looking at the basket size in the month of March, and there are AED 3,000-AED 6,000 basket size has a big drop. What we noticed at the same time, there is an 50% of the transaction coming for a smaller basket, and the smaller basket means it is their breakfast, lunch or dinner. That has also dropped. It came back immediately.
The offices started functioning, schools, getting to the children into the school. That behavior, I can see that it's coming back from April, second week of April onwards. Thank you for the question.
This is good news. Thank you for the answer. Appreciate it. Can I just ask one more question about inflation in your basket? What is your current expectation for how it's gonna change in Q2, Q3? By how much inflation on the shelf can accelerate?
Okay, Elena. If I look at the current trends, since March, overall cost inflation has been in the range of 6%-7%. Post-March, as Sunil mentioned, other than the essential products, we have around 500+ product lines we have decided not to pass on the increase to the customers. For other products, which could be premium or any sort of value-added products, we have decided to pass the increase to customers. The RSP inflation or the RSP increase may not be exactly in line with the overall cost increases for certain categories. As Sunil mentioned, the product mix is also changing.
It is becoming more favorable for us because there was significant impact on the meal solutions, for example, as a category in the month of March when everyone was working from home. That is now recovering. Thank you.
I'm sorry, but this, retail price increase for the, for the other products which are not within the 500 SKUs, you've already started taking prices up in, March or at only in April?
To a certain extent, Elena, because as I mentioned, I was looking categorically and careful and conscious that I don't want to piss customers off when they see a pricing. We are looking at a subcategory-wise. For example, store fruits, how much inflation I can charge into the customers. Like a table fruits, how much I can add in. A chicken protein-wise, white protein as well as red protein, how much I can, I can afford to charge the customers. What we are focusing on, how can we get that, the, sourcing differently without compromising the quality of the product, and how can we source it better? That's what we are looking at it. I'm happy with the numbers, what I have seen it in March I mean, April. It is better than March.
It is moving now. I can see it in May. I should not be giving the guidance on May, but I can tell you that I'm more than happy to see the numbers are coming back as I expected.
Sunil, can I just clarify something? When you say that you are very careful in passing on pricing not to piss off consumers. I would have thought your consumers are less price sensitive to staples. How are you doing this? Are you taking prices up to then follow the volumes of a certain SKU? Are you managing it so that you don't have a like-for-like volume drop? What's the thinking behind that price pass-through strategy?
Elena, as I said, as I mentioned earlier, the customers' behavior change, they may not be a price sensitive customer. When the crisis comes and all the media are saying that the fright has gone up and inflation is going to come, and everyone will be watchful on the product range.
I have to be very responsibly look at those aspects, understanding a non sensitive customer on the products, but it is the responsibility that I don't want to just do a blanket approach towards the business and bringing those costs directly into the customers. Of course, some of the range which there is no price elasticity at all, which we have charged the customers, but it is a kind of a scientific approach we are looking at to get that margin what we expected on the going forward in this crisis time. At the same time, we understand the customers' behavior pattern may have changed because of their looking at the prices, et cetera. We are looking at the tiering of the products.
We are looking at within the tiering what we can increase and what we cannot increase. Thank you.
Okay. Thank you. I'm sorry, can I ask one more question?
Elena, you're not giving a chance for others.
One last question.
I have a couple of other questions.
I'm sure it's interesting for all. Okay, I can come back in the queue, that's fine.
Okay. Thank you, Elena.
Yeah. We will be in a position to answer your questions. We can contact IR and we will give you or we can have a coffee, of course.
The next question is from Mr. Ahmed Kamal from Azimut Group. Is there any change to dividend plan?
No, there is no change in the dividend policy of the company, and we'll continue to propose the dividend, not pay. That is, that's for the board and the shareholders decide. We'll continue to propose the dividend policy as per our dividend policy. Thank you.
Thank you. The second question from Mr. Ahmed. Is the company planning to do any increases for SKUs that are not under government price control measures?
Is, Sorry, planning to do any price increases for SKUs that are not. Yeah, as I mentioned, we are looking at, I've been trying to explain to Elena, the customer's behavior, not necessarily they are sensitive towards the pricing, but this crisis time, because of the inflation, everybody is looking at watchful on the price on the supermarket. Now, we are looking at in a category, sub-category-wise approach, where we can increase the price, where we cannot increase the price. Of course, whatever the SKUs we have decided, not because of the government, but because as a company, we wanted to ensure that the key essential products we will not be touching the price, even if the cost has increased.
Rather, we will be looking at a different sourcing, whether it can bring it by the cost-effective model. We are looking at that option. Wherever it is not a price elasticity, it is not a concern for the customers, we are charging that cost into customers.
Okay. Thank you very much. It looks like there are no further questions at this point. I'll be passing the line back to the management and IR team for the concluding remarks.
I wanted to say thank you very much. First of all, a crisis time, we have investors who understand the complexity as well as the dynamics of the situation. It is a business which have been always resilient. You have seen, since I've been a CEO, I have seen many of these crisis, and we have overcome successfully those crisis. Of course, whatever within our control, with the best interest for the customers as well as shareholders, we will do our best to achieve what we have given as guidelines. Thank you very much.
Thank you. Thank you, everyone.
Thank you very much. This concludes our conference call today. We'll now be closing all the lines. Thank you and goodbye.