Thank you for standing by, and welcome to the Qatar Electricity and Water second quarter financial results call. Please note today's call is being recorded. I would like to hand over to Shahan Keushgerian from QNB FS to begin the call. Shahan, over to you.
Thank you very much. Hello, everyone. I want to welcome you to Qatar Electricity and Water's second quarter and first half 2024 financial results conference call. On this call from management, we have Shahzad Iqbal, Chief Finance and Planning Officer, and Gojy Augustine, Head of Budget Reporting and Control. As usual, we will conduct this call with first management reviewing the company's results, followed by a Q&A session. I will turn the call over now to Shahzad. Please go ahead.
Thank you very much, Shahan. [Non-English content] . Good morning. Good afternoon, everyone. I welcome you to Qatar Electricity and Water Company's quarter two, first half results call. Let me go through the introduction first. You might be hearing me for the first time. I am Shahzad Iqbal. I am the newly appointed Chief Finance and Planning Officer of QEWC Group. I have been part of the group for last seven years in a different role.
I was working as Nebras Power's CFO in my last role. I have been associated with power and water generation for a large part of my career. As you might be aware, through our announcements recently, that QEWC and Nebras have gone through an integration in July. As part of the integration, Nebras personnel systems and processes have been moved to QEWC. This integration ensures operational synergies, harmonizing internal systems and processes across the group.
This will also foster a bigger and better knowledge base within the group. We believe this will set up the group for the challenges of today and also to take advantage of the opportunities that are in the market internationally and locally. You can refer to more information about this on our website. I am very excited to embark on this journey, on this new chapter with the organization. Present with me today is Gojy Augustine. I will take you through the operational and finance highlights while Gojy will go through, excuse me, the details and results of the quarter and first half of the year along with the comparison. With this, allow me to dive into the numbers. As a snapshot for first half of the year, 2024, the revenue posted or booked by QEWC is QAR 1.4 billion, which is 4% up from last year same period.
When we go to EBITDA, it stands at QAR 670 million . This is lower than previous year by 12%, and we will get into the details of that. Also, net income, QAR 680 million net profit, 12% lower than previous year same period, mostly driven by non-recurring items, but we will dive deeper into that. Just a snapshot of our operating capacity, before we get into the numbers. Our total power capacity stands at 20 GW gross basis today, out of which renewable capacity is 4.3 GW gross. And water capacity stands at 541 MIGD, whereas we also have under-construction projects, and the capacity for those under-construction projects is 3.2 GW. With this, I'll move to operational performance for first half of the year. Sent-out power is 6.4% higher, and sent-out water is 2.2% higher compared to the previous year.
Sent-out power was 14.2 million megawatt hours compared to 13.3 last year. Sent-out water, 228 million cubic meter compared to 223 last year. The plant availability, slightly lower by 1%, stands at 94.6% compared to last year same period, 95.6%. And water availability stands at 99%, slightly higher than last year, 98.6%. Now getting to the quarter results, Q2 results. Revenue has been slightly higher at QAR 473 million compared to same period last year, QAR 721 million. EBITDA, QAR 350 million this year for quarter two, and for the same period last year, it was QAR 332 million. I'm going through this, but as I said, we'll get deeper into the numbers later in the presentation.
Net profit, QAR 361 million compared to QAR 368 million last year for Q2. Earnings per share stand at the same level, QAR 0.33 this year versus Q2 last year, QAR 0.33 . I've already taken you through the revenue, EBITDA, and net profit for the year-to-date. What I want to mention here is earnings per share for first half of the year-to-date is QAR 0.62 , versus last year first half, QAR 0.70 . And with this, I'll hand it over to Gojy, who can take you through the details of the numbers. Gojy, over to you, please.
Thank you, Shahzad. I'll try to complete the review within the next 10 minutes so that we'll have sufficient time for the question- and- answer session. First, as usual, we will look into QEWC performance for Q2 2024 in comparison with Q2 2023. You will see that the revenue has gone up by 3%, which is mainly due to increase in sent-out power and water. The operating expenses also increased. Mainly gas cost also increased in line with the increase in sent-out power and water. So the gross profit is QAR 234 million against QAR 229 million during the last year. So there is a 2% increase. The EBITDA shows 5% increase, which is mainly due to higher one-off items in Q2 2024 when compared to Q2 2023. So there had been significant drop in share of profit from JVs and associates.
This is mainly driven by some of Nebras JVs and associates, mainly some planned outages at Paiton Power Plant, Indonesia, seasonal lower generation in U.K. wind portfolio, and some Forex losses in Bangladesh project. This U.K. wind project, as well as Bangladesh project, were not part of QEWC's profit and loss statement during Q2 2023. This is because U.K. wind portfolio project was acquired by Nebras during December 2023, and Bangladesh project was commissioned in Q1 2024. Okay, interest and other income is higher, mainly due to a one-off item, approximately around QAR 50 million, which is a compensation received by one of the sponsors of an international project. Interest income, it is partially offset by lower interest income in 2024, which is mainly due to availability of lower cash balance.
This is, as you all may remember, QEWC has repaid all the short-term loans, and Nebras also made some new investments during this year. The interest income is comparatively lower when compared to last year. The net profit is QAR 361 million against QAR 368 million during the last year, a 2% drop. I already explained the reasons for this. Coming to the H1 2024 performance in comparison with H1 2023. The revenue is increased by 4%, and gross profit also increased by 6%. This is mainly due to higher sent-out power and water, and we already explained regarding this. The sent-out power was 6% and water was 2% higher when compared to last year. There have been significant drop in EBITDA, net profit, and other income. The main reasons behind this are inclusion of some one-off items in 2023 H1.
Mainly, the profit on sale of Siraj Energy, QAR 77 million, reversal of provisions no longer incurred, QAR 26 million, and Brazil EPC LD settlement of QAR 26 million. All these were included in H1 2023 financial profit and loss statement. Also the dividend income in 2023 was around QAR 18 million higher than what was received in 2024. This is partially offset by the one-time compensation of around QAR 50 million, which has been explained previously. The net profit is QAR 680 million, against the QAR 769 million, which is 12% lower when compared to last year. Coming to the statement of financial position, the total assets of the company remains almost same as last year. Cash and cash equivalents, there is a 22% drop. This is mainly due to payment of dividend of QAR 946 million during this year.
Approximately QAR 300 million new investments done by Nebras in various projects during H1 2024. The available-for-sale investments, 4% increase is there. It is only due to the change in the market value of shares. Total equity, although the company made a QAR 680 million profit during the first half year, the equity remains almost same as last year. This is mainly due to payment of dividend and movements in the hedge reserve. The total debt dropped by around QAR 100 million. This is mainly due to repayment of project loan installments by QEWC. Net debt increased by 24%. This is due to drop in cash balance. The reason for the drop in cash balance has already been explained. With this, we will conclude our presentation. Now the floor is open for questions. Over to Shahan.
Okay, we can go to Q&A now, please.
Thank you. We are now open for questions. To ask a question, please press star one to raise your hand and join the queue. We do request when called upon to ask your question that you please unmute your device. Today, we do allow multiple questions, but please ask your question and await the answer before asking additional questions to allow our presenters to provide the most complete answer possible. Again, that's star one to join the queue. Your first question is from the line of Mark Krombas from TFI. Please go ahead.
Yeah, thanks for the call, gentlemen. I noticed today you made an announcement that you're going to have a board meeting and an EGM to approve interim dividends on the 15th. I just wondered if you've formally announced the dividend for this period or not, or if you're planning to pay one. Could you clarify, please?
Yes. We are indeed planning to pay one. We have not announced the dividend yet, but soon you will hear an announcement on that.
Can I ask, because all the other Qatar energy companies have announced this in conjunction with their results. Do you know why you haven't been able to do that? What the proposed dividend might be?
Yeah. The reason was, as you heard, that we were going through the transition and some documents were being changed, some commercial registrations and all those. We did not know the exact timing, how much time it will take, but now we know that we can do that, so we will announce the dividend soon.
Is half of last year's dividend an approximate value that is something as a ballpark range that we should consider?
Gojy?
Yes. This is something to be decided by the board. At this point it is difficult to answer this question.
Okay. The second question is about proposed potential tax payments for OECD and all those companies in Qatar that have a turnover of over EUR 750 million and have international subsidiaries. Your company is really on the cusp, very close to EUR 750 million but just under in terms of sales and revenues. Have you sought tax advice on whether or not you would be eligible to pay this tax? Is there any plans in place to potentially keep the sales below that figure to avoid it? Could you talk about that, please?
Yes. We have sought advice. We have engaged one of the Big Four for this. At the moment, because it is still in the draft form, the analysis is being prepared. Therefore, I am not able to share, but there are ways that we can avoid paying this tax. As a very high-level analysis, we have been above the threshold of 15% in all the international jurisdictions in any case. So if there is any issue, it is going to be in Qatar, but there are ways to avoid it.
Okay. That is comforting. I will let someone else ask a question. Thank you.
Before we move on to the next question, a reminder, if you would like to join the queue, to please press star one. Your next question comes from the line of Seki Mutukwa from Ashmore. Please go ahead. Seki, your line is open. Your next question is from the line of Nikhil Phutane from CBFS. Please go ahead.
Hi, good afternoon, gentlemen. Thanks for your presentation. You have mentioned certain things in terms of drop in JVs, especially because your plant outages in Asia has been significantly lower along with projects, especially in U.K. and Bangladesh. So wanted to understand now, do we see further provisions likely to happen, especially in Bangladesh, given the situation currently there? Any other which we could be talking about or likely in terms of increasing provisions in the third quarter, fourth quarter of this year?
Let me ask you about, your question to Bangladesh is specifically about the FX losses or?
Yeah. I am talking about the Bangladesh project in which you have mentioned there has been a share in drop on that because of Forex losses and other things. Wanted to understand what is the current situation regarding that—
Yeah.
—how much? Yeah.
The Forex losses, as you can imagine, is due to the currency movements. Political situation there is, at the moment, volatile. However, the plant is available and operational. We do not see, as of now, any issues in the operating of the plant. If your question is about the impairment, we are still far away from that.
Okay. But, in terms of any other things, because this has been going around for some time. You had Ukraine issues earlier. Bangladesh has come up. Wanted to understand holistically, are we seeing any other projects where there could be projects which are getting on their delays front? Maybe that could have been an issue later on, which will come up. I suppose you could be transparent on the projects existing and whatever upcoming projects that will be at risk. Thank you.
Yeah. Look, our projects that we've gotten into are on the website, and you would see it's a mix of different types of markets. There are mature markets, and there are emerging markets where our projects are. Bangladesh is one of the markets that is, at the moment, volatile, but at the same time, we have invested in U.K. We have, in the past few years, invested in Australia. So we always are very careful to balance out the portfolio that way and also in terms of technologies. There has been investment in Uzbekistan recently as well, and those two projects are under construction. So I don't see any issue politically. It's an emerging market. It's gone stable. There is a vision by the government on the plan for electricity capacity increase. So we are working on that.
As far as I see for now, I don't think there's any other risk that you would see in the near future.
Okay.
Given the situation in the world, as you know, there have been It's been an election year for most of the countries, plus the U.S. elections coming up and all that. So there is some expectation of currency movements and all that. Otherwise, what we have seen in Bangladesh, nothing to that extent in any other markets that we foresee.
Coming to your home turf, in terms of your operations out here, you mentioned about plant availability being lower. Can we know the reason behind that? I mean, it is from the government which taken it across the lower and lower rates. Sorry, in terms of lower availability, which has affected to certain extent your revenue.
No. Actually, the lower revenue is due to some scheduled outages which was planned ahead. There used to be scheduled outages for gas turbines once in five years or four years. The lower availability, it's just due to the planned outages only.
Okay. So basically, you're saying that this could come back to normal?
Yes.
Okay. Thank you.
Your next question is from the line of Seki Mutukwa from Ashmore. Please go ahead.
Hi there. Hope you can hear me. Sorry, my phone line dropped off, so hopefully I am not repeating the question. But on page six of your slide deck, you talk about capacity under construction. Are you able to give us a sense of timing of that net new capacity of 1.1 GW and related CapEx that you are supposed to be funding towards that? Thank you.
This capacity is supposed to come, half of it, 1.1 GW net is supposed to come online, in 2026, and the rest of the capacity, other half, in 2027, first half of 2027. And in terms of the investment in these projects, it is somewhere to the tune of approximately $100 million. Some of the investments, equity has already been invested, and the rest to the tune of $100 million.
Okay. Sorry, so yeah, that is $100 million outstanding. Just the contribution from QEWC to those projects.
Yeah.
Okay, perfect. Thank you very much. One more question, if I may. In terms of what you would like to see, let's say by 2030, a mix of renewables as a percentage of the total capacity, is there any indication or targets you can share?
I can say up to 2028, our five-year plan
Sure.
It has a renewable mix of 50%.
50%. Okay. Thank you very much.
And—
Your next question is from the line.
—can I, sorry, just elaborate on that. This is, I am talking about Nebras Power's plan, international markets. When you get or when you add on top of that QEWC portfolio, there is some gas capacity that is coming up in the coming years.
Your next question is from the line of Aashish Agarwal. Please go ahead. That line has dropped off. There are no further questions at this time. I would like to hand the call back to Shahan for closing remarks.
Okay, great. If there are no more questions, we can wrap up this call. I would like to thank management for giving us an update, and we can pick this up again in the third quarter. Thank you.
Yeah. Thank you very much.
Thank you very much, Shahan.
Thank you.
This concludes today's conference call. Enjoy the rest of your day. You may now disconnect.