Hello, and welcome to the Ezdan Holding Group earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at this time, just press star followed by the number one on your telephone keypad. If you would like to withdraw your question, just press star one again. Thank you. I will now turn the call over to our moderator, Dana Al Suwaidi. You may begin.
Hello, everyone. This is Dana Al Suwaidi from QNB Financial Services. I would like to welcome everyone to Ezdan Holding Group's third quarter 2026 financial results conference call. On this call from management, we have Tamer Fouad, Group Chief Financial Officer, and Taha Moursi, Financial Controller and IR Officer. We will conduct this conference call with management first reviewing the company's results, followed by a Q&A session. I will now turn the call over to Taha. Please go ahead.
Hello, everyone. Thank you for joining us today for Ezdan Holding Group Q3 2026 conference call. Our investor presentation is available now on our website at www.ezdanholding.qa under the investor relations section. Considering that EZDAN has launched a new website, we hope it will be more beneficial for all of you. Before we begin, we would like to provide a disclaimer that some of the information that will be discussed here might contain projections or other forward-looking statements regarding future events or future financial performance of Ezdan Holding Group. Any forward-looking statements, including those that are not historical fact, speak only as of when it is made. EZDAN undertakes no obligation to publicly update or publicly revise any forward-looking statements, whether because of new information, future events, or otherwise. We will cover today three main areas.
First, we will work through our financial performance for Q3 2026 compared to Q3 2025. Second, we will compare financial position of 30th September 2026 compared to 31 December 2025. Third, we will cover a brief about cash flow statement for Q3 2026 compared to Q3 2025. For financial performance, during the period, EZDAN achieved a net profit attributable to its owners of around QAR 644 million compared to QAR 588 million. The main drivers behind this change were as follows. Finance cost decreased by QAR 161 million, other income increased by QAR 18 million, rental income increased by QAR 10 million. On the other hand, gain on sale of investment properties and assets held for sale decreased by around QAR 100 million. For the key ratios, operating gross margin remained stable at 82%, and the net profit margin slightly improved from 42% -46%.
For rental income, EZDAN recognized around QAR 1.35 billion compared to QAR 1.34 billion, reflecting an increase of around QAR 10 million or approximately 1%. Gross rental revenue was supported by improved performance across residential segment by 1%, mall segment with around 9%, while hotel segment decreased by around 6%. The main statistics for residential segment were as follows. Average occupancy rate improved by 2%, from 88.9%- 91.4%, and average revenue per unit remained broadly stable at around QAR 4,400 . While average total number of units available for rent decreased from approximately 32,900 for 2025 to 32,100 during the same period this year. The main statistics for hotel segment were average occupancy rate decreased to approximately 80% compared to 83.5%. The average daily rate at EZDAN Hotel West Bay decreased slightly from QAR 170 to QAR 168. Average daily rate at EZDAN Palace Hotel decreased from QAR 419 to QAR 398.
For mall segment, average occupancy rate reached approximately 94%, up from 91% in Q3 2025. For operating profit, it remained broadly stable at QAR 1.2 billion with a slight increase of approximately QAR 6 million or half percent. If we break this down by segment, we will find that residential segment's operating profit grow from QAR 994 million to QAR 1 billion with a gross margin remained at 85%. Hotel segment operating profit decreased from QAR 100 million to QAR 96 million, with the gross margin declined slightly from 68% to 66%. Mall segment operating profit has improved from QAR 53 million -QAR 58 million, with the gross margin rising slightly from 70%- 71%. For gain on sale of investment properties and assets held for sale, it decreased by QAR 110 million from QAR 116 million to QAR 5 million.
As during the previous period, there was a selling of a whole compound which resulted in a gain of around QAR 115 million compared to a gain on selling of individual units during the current period, which resulted in a gain of QAR 5 million. For foreign exchange gain or losses, the group recorded a foreign exchange loss of approximately QAR 3 million during the current period, compared to a gain of QAR 16 million in the previous period. This movement was mainly driven by changes in the British pound sterling exchange rate. For finance costs, decreased by approximately QAR 161 million from QAR 614 million to QAR 453 million, representing a reduction of around 26%. This was primarily driven by lower borrowing rates and improved profit margins on financing facilities. For financial position, total assets stood at approximately QAR 46 billion compared to QAR 45.6 billion.
Cash and bank balances increased to QAR 1 billion from QAR 510 million, an improvement of approximately QAR 528 million or 103%. Investment properties decreased by approximately half a billion, from QAR 44.1 billion to QAR 43.6 billion, mainly driven by disposal of properties and transfer of assets as held for sale. For assets held for sale, it increased by around QAR 320 million as a result of transferring assets from investment properties, offsetting by selling residential units during the period. Total liabilities decreased by around QAR 316 million from QAR 12.1 billion to around QAR 11.8 billion. For Islamic borrowings, they decreased by a net amount of approximately QAR 304 million during the period, primarily reflecting repayments of approximately QAR 760 million, partially offset by finance costs of approximately QAR 453 million and transaction costs of around QAR 3 million. Total equity, including non-controlling interests, increased from QAR 33.5 billion to QAR 34.1 billion, an increase of approximately QAR 0.6 billion.
The group share capital stands at QAR 26.5 billion. Retained earnings increased by QAR 644 million, primarily reflecting the net profit generated during the period. For cash flow, net cash flows from operating activities were QAR 1.1 billion, same as the previous period. Net cash flows from investing activities were QAR 221 million compared to QAR 401 million, and the net cash flows used in financing activities were QAR 757 million compared to QAR 740 million. Thank you for your attention. We are now happy to take any questions you may have.
We will now begin the question and answer session. If you would like to ask a question, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, just press star one again. Again, if you would like to ask a question, just press star followed by the number one on your telephone keypad. Your first question comes from the line of Ejayan Al -Ahbabi with Al Rayan Investment. Ejayan, please go ahead.
[Non-English content] Hello, can you hear me?
Yes.
Excellent. First of all, thank you for the opportunity. This is Ejayan Al -Ahbabi from Al Rayan Investment, and congratulations on the set of results. I have a couple of questions, actually. My first question is in regards to the held for sale movement in the balance sheet in the assets. Are you planning on selling any real estate this year?
According to the accounting standards, we classify this investment property that the management has decided to sell. Now we have available units to be sold in the units. These available units in the financial statement, this is the market value of these units that will be sold during the coming year.
[Non-English content] Excellent. My second question is with regard to the finance cost. I can see it going lower. Should I expect this run rate to continue?
For the current period?
[Non-English content] Excellent. Sorry to have so many questions, but the other income has been doing well. I just wanted to get an idea on what is driving it and what exactly is considered other income.
Other income has two parts. First, it was profit on Islamic deposits. As you notice, cash has been increased significantly from QAR 500 million- QAR 1 billion. So this increase has reflected in more fixed deposit during the period. Accordingly, more profit on Islamic deposits.
Excellent. Sorry, I didn't get the beginning part of the presentation. The blended occupancy for the real estate is about?
It is 91%.
[Non-English content] Okay. Sorry for so many questions, but the final question I have is with regards to units. How many units do you project to have by the end of this year?
We don't have any additional units in the pipeline, but the current units EZDAN has now, we are talking about the range from 32,000- 33,000 units.
Okay, thank you. That's all my questions. Thank you very much, gentlemen. And once again.
Thank you.
Again, if you would like to ask a question, just press star followed by the number 1 on your telephone keypad. There are no further questions at this time. I will now turn the call back over to our moderator for closing remarks. Dana?
There are no more questions. We would like to thank the company's management for the results update and for taking the time to answer all queries, and we look forward to speaking to you all for the fourth quarter results.