Good day and welcome to the WOQOD second quarter 2022 conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Roy Thomas. Please go ahead.
Hello, everyone. This is Roy Thomas from QNB Financial Services. I want to welcome everyone to WOQOD's second quarter 2022 financial results conference call. On this call from WOQOD, we have Pradeep Kumar, the Chief Financial Officer, Sultan Jassim Al-Maadeed, the Finance Manager, and Ahmed Saeed Al-Mansouri, the IR Officer. We will conduct this conference call with management first reviewing the company's results, followed by Q&A. I will turn the call now over to Pradeep Kumar. Go ahead, Pradeep.
Okay. Thank you, Roy. We will start with Ahmed Saeed Al-Mansouri on introduction. Ahmed, please proceed. Yeah.
Thank you, Roy. Good day to all the participants, and we hope everyone is keeping safe and healthy. We welcome you all to WOQOD's quarter- end June 2022 results conference call and appreciate your participation as WOQOD is committed to continuously enhance its investor relation initiatives. This is in order to strengthen our communication and improve transparency with all members of the global investment community. The presentation of this call will be available on the Investor Relations section of our website. Any statement that refers to expectations, projections, guidance, or any other characterizations of future events, including financial projections or future market conditions, is a forward-looking statement based on the assumptions stated. Actual results may differ materially from those expressed in these forward-looking statements. The company cannot disclose any commercially sensitive information due to the confidentiality agreements signed with the suppliers.
Please refer to slide number two for the full version of disclaimer statements. All figures expressed in this call are in QAR, and the conversion for the same to US dollar is QAR 3.64 to one US dollar. I would like to hand over the call to our Finance Manager, Mr. Sultan Jassim Al-Maadeed, to provide a brief overview of WOQOD and update on the key operational activities.
Thanks, Ahmed. Hello, everyone. Thank you for joining us today for the conference call of WOQOD. The key vision of WOQOD is to be the leading petroleum product distribution and related services marketing company in the region. I am on slide four now, which shows the overview of WOQOD Group. WOQOD started operation in 2002 with exclusive rights for storage and distribution of petroleum products in the State of Qatar. Operation started with two petrol stations in 2003, and we have grown to 119 stations by the end of June 2022. The chart on the right shows WOQOD station network. WOQOD also operate 13 FAHES centers for inspection of vehicles. I am on slide five now, which shows the key operation of WOQOD Group.
The key operation are diesel and gasoline fuel distribution and sales, jet fuel distribution and sales, shore-to-ship and ship-to-ship bunkering, LPG distribution and sales, natural gas distribution and sales, fuel bunkering, bitumen operation, C-store, and auto care activities, vehicle inspection services. I am on slide number seven now, which shows the diesel and gasoline fuel sales volume trend. As mentioned before, the core activities of WOQOD is fuel distribution and sales in the State of Qatar. For the quarter ending June 2022 versus quarter ending June 2021, diesel and gasoline chart on the top show the quarterly trend. Diesel sales volume were higher by 0.6% in the second quarter 2022 versus the same quarter of 2021, driven by macroeconomic factors.
Combined gasoline sales volume were up by 13% in the second quarter of 2022 versus the same quarter of 2021, driven by market demand and ease of restrictions. The table on the right shows year-to-date June fuel volume and price variance analysis. Total fuel sales were higher by 4% during year-to-date June 2022 versus June 2021, driven by market demand. Average fuel price were higher by 22% for the year-to-date June 2022 versus year-to-date June 2021. Turning to slide eight, which shows the jet fuel sales volume comparison. Jet fuel sales were higher by 30% in second quarter 2022 compared to the same period last year, driven by easing of COVID-19 related air travel restriction in many countries.
Sales for year-to-date June 2022 was 26% better than year-to-date June 2021, driven by improved uptake from airlines. Jet fuel average price was higher by 86 in June 2022 versus June 2021. Correction to the percentage, not 86%, 30%. Combined sales volume of all petroleum products increased by 14% for the year-to-date June 2021 as compared to the same period last year. Turning to slide nine, which shows the retail fuel sales volume quarterly trend. For the second quarter of 2022 versus second quarter 2021 overall retail fuel volume increased by 14% driven by increased market demand. Retail diesel sales increased by 10%, gasoline sales increased by 16%. Turning to slide 10, which shows the retail fuel sales volume comparison for the year June 2022 as compared to the same period last year.
Retail fuel sales volume at petrol station were higher by 10% for the year- to- date June 2022 as compared to the same period last year driven by market demand. The shares of WOQOD in the petroleum retail market reached about 86% for year-to- date June 2022. We would like to share some additional information on other business segments for the period year- to- date June 2022 versus 2021. Natural gas sales increased by 1% driven by market demand. Diesel bunkering sales increased by 12% driven by market demand. Non-fuel retail segment increased by 7% driven by various initiatives. Now I would like to hand over the call to our CFO, Mr. Pradeep Kumar, to discuss the financial results.
Thanks, Sultan, for all the volume updates. Good day, everyone, and hope everyone is safe and healthy. Now I would like to discuss the consolidated financial results of WOQOD for the half year ended 30th June 2022. Starting with revenue, I'm on slide 12 now, which shows the revenue trend of WOQOD. Revenue from fuel sales account for nearly 96% of the total revenue. WOQOD achieved total revenue of QAR 13.7 billion for the first half of 2022 as compared to QAR 8.3 billion during the same period last year, showing an increase of 65%, mainly driven by increase in fuel sales volume by 14% and increase in average price by around 54%.
As compared to first quarter of 2022, the revenue increased by 34% during the second quarter, mainly driven by increase in fuel sales volume by 7% and increase in average price by 15%. Turning to slide 13, which shows the net income. WOQOD has made a net income of QAR 501 million for the half year ended 30th June 2022, as compared to QAR 461 million during the first half of 2021. Increase of 9% mainly driven by higher sales volume and other income. Additionally, improvements in non-fuel segments also helped the increase in net income. On a quarterly basis, the net income for second quarter of 2022 is QAR 238 million as compared to QAR 208 million for the same period last year.
The detailed analysis of net income variance for first half of 2022 is given in the next slide. Slide 14 shows the key variance analysis of net income for the half year ended 30th June 2022 as compared to same period last year. The increase in net income of QAR 40 million is due to following major factors. Margin increased by QAR 44 million, mainly driven by increase in sale volume, sale volume net of expenses. Trading stock price variance driven by comparatively higher increase in fuel stock prices during the first half of 2021 as compared to first half of 2022. That is 60% fuel stock price increase during the first half of 2021 versus 20% increase only during this year, first half.
OpEx increase relates to expenditure incurred for improving safety and reliability of assets and to meet the requirements of World Cup 2022 events. G&A expenses lower due to lower provisions against the receivables in line with the IFRS requirements. Other income increases mainly driven by increase in dividend income. WOQOD's fundamentals continue to remain robust and WOQOD is committed to meet all its strategic goals while placing safety as a top priority. The company has taken several proactive steps and initiatives to ensure continuity of its business during COVID and will continue to do in future in coordination with relevant authorities. WOQOD has a strong leadership committed towards delivering the results to its shareholders. With this, we are ready for the Q&A session. Thank you.
Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for question. Again, press star one to ask a question. We'll take our first question. Moha from Al Rayan Investment. Your line is open. Please go ahead.
Thank you gentlemen for the presentation. I've got one question on your gross margins. Gross profit, actually. For the last two or three quarters, if I compare it on a year-over-year basis, your gross profit has been on a downtrend. The first quarter, the gross profit was lower by 2%. This quarter, it's lower by 7%. Prices are higher. The entire total fuel volumes are higher. Why is the gross profit lower? Thank you.
It's a good question, Moha. If you go to slide 14, which is clearly explained there, the increase in fuel sales volume is correctly captured, and we gained QAR 44 million from the volume increase of 14%. That's clearly shown in that graph. Now, on the other side, as I mentioned before, the fuel price increase last year first half was almost 60% versus this year first half was like 20% only. So we carried inventory there. So last year the price increase in the inventory was so high that we got that into net income. But this year compared to last year, it's not that high. So we suffered around QAR 37 million in that.
Also, the operating expense increase of QAR 33 million to meet, you know, last couple of years, the COVID and everything, where we need to spend a lot of money to improve the reliability and safety and to meet the requirements. We are incurring some additional expenditure. These are the reasons for decrease in the GP. On the other side, the volume increase is definitely captured in the margins.
Okay, thank you. One other question. Now that we are nearing the FIFA World Cup, what kind of preparations are you doing for the World Cup? Thank you.
We are doing all necessary preparation activities gearing up to the World Cup. We are liaising with all parties involved. Inshallah, all everything is gonna be fine. We are ready. We are ready with all increase in operation. We're just waiting for the event to take place.
Thank you.
Again, press star one to ask a question. We'll take our next question. Nikhil Phutane, your line is open. Please go ahead. Nikhil Phutane from CBFS, your line is open. Please go ahead. Just a reminder, please, unmute your line when speaking. Once again, press star one to ask a question. We'll take our next question. Ildar Khaziev from HSBC, your line is open. Please go ahead.
Yes. Hi. Thank you. Just a couple of small quick questions. Could you please remind us the nature of the dividend income which you report as part of the income, where it's coming from exactly. Also equally, what is the dividend which you pay into non-controlling interest? What are those entities like exactly? Thank you.
The dividend income represents the income from equity investments we made in Qatar Stock Market. This year we made around QAR 84 million as compared to around QAR 60 million last year. There's an increase of QAR 24 million, which is reflected in the other income. Now, regarding, if I understand correctly, you asked for the dividend payment for this year by WOQOD, which will be kind of decided in the January board meeting and subject to approval by the AGM based on the financial results and other commitments of WOQOD. We need to wait until February to hear the final outcome of the dividend for this year. You can always see historically WOQOD paying healthy dividend to our shareholders.
Yeah. Yes. Thank you. That's clear. My second question was about the dividend which you have paid to the non-controlling, I mean, equity shareholders. I think in some of your subsidiaries maybe. You have this line in the cash flow statement.
Can you please come closer to the speaker? Because honestly, we cannot hear the question.
Oh, sorry. Yes. In the cash flow statement you have this line which is about dividends paid to non-controlling interest, and I think about QAR 48 million in the first quarter of this year. Could you tell us, you know, who is the entity which is getting this dividend?
All right. We have a joint venture, which is QJET, in our jet fuel operations. This money represents the dividend payout to our non-controlling interest.
Oh, okay.
Which is QJET.
That's clear. If I may, maybe could you, I mean, do you provide any guidance for the CapEx, like, for this year or maybe for the next few years? Is there any guidance you could share?
Well, this year, so far we've spent around QAR 188 million, and we are doing a lot of CapEx projects, which is kind of. You know, last year our spending was so low. As you know very well due to the restrictions from COVID, we couldn't execute a lot of projects. Definitely we'll be doing a lot of projects, reliability improvements, safety improvements, et cetera, in the coming months. That's kind of the plan. So far we spent this year QAR 188 million.
Okay, thank you.
Again, press star one to ask a question. We'll take our next question. Govinda Kumar from HSBC, your line is open. Please go ahead.
Yeah. Hi. Hi, thank you. I have another couple of questions. First one is related to World Cup, football World Cup. You're expecting some growth, so what kind of growth you are expecting in, you know, fuel consumption because of the World Cup? Secondly or another question on the North Field Expansion. That project is going on, and what kind of growth are you expecting as a result of that in terms of, you know, bunkering fuel sales growth for Qatar Fuel? Thank you.
Yeah. For the World Cup, definitely we expect that fuel segment is going to improve, especially on the jet fuel segment. That's what our expectation. Regarding North Field Expansion, yes, when the real work happens on the ground, we believe that a lot of additional fuel requirements will be there, whether it's bunkering or bulk fuel supplies, and we are looking forward to that.
Just to follow up if I could. Currently, what percentage of total fuel sales is bunkering?
That's relatively very low percentage compared to the overall. You know, I told you 96% is the total fuel sales share in the revenue, and bunkering is very minimal. Less than 5%.
Okay, thank you.
Again, press star one to ask a question. We'll take our next question. Eldar Khazi from HSBC, your line is open. Please go ahead.
Yeah. Thank you. Just one more question for me, please. In, you know, when I'm looking at some of your some of the markets in the region like UAE, for instance, it has become quite popular for the retail network traders to expand via the, you know, smaller format stations like mobile stations maybe. Is this something you have been looking at? I mean, is it something which kind of makes sense for Qatar you think? You know, do you have any such stations at all in your network? That'd be very useful. Thank you.
Yeah. Go ahead.
Just to answer that question, we already have mobile stations and, yeah, there is an opportunity to expand on that angle. We would definitely take it.
We are looking into such type of stations in future like mini stations. Yeah.
I see. Thank you.
Once again, if you would like to ask a question, please press star one. There are no question at this time. I would like to turn the conference back to the speaker for any additional or closing remark. We have one question just came in. Can I open it?
Go ahead.
We open our next question. Govinda Kumar from HSBC, your line is open. Please go ahead.
Yeah. Hi. I have one question on a slightly long-term basis. A lot of growth in the sales fuel volumes have come from jet fuels. Probably this will happen again in this year because of FIFA World Cup and, you know, other restrictions going away. Going forward, how will the sales volume growth, you know, grow? Will it be coming from gasoline and diesel? How much will it be coming from gasoline and diesel, and how much do you expect it to come from jet fuels?
Well, purely depending on the market demand. Of course, this temporary increase this year, which we expect is relating to FIFA. Going forward, you know, it's purely based on the demand from the segment, which is based on the macroeconomic factors in the country.
Okay. Thank you.
Operator, I think that we will take this as a, you know, as the last question.
Okay. We have one more in the queue. Can I open it?
Sure, go ahead. That's gonna be the last question.
Okay. Eldar Khazi from HSBC, your line is open. Please go ahead.
Thank you. Yes. Sorry, just a follow-up to what Govinda was asking, about bunkering operations. You said it's only less than 5% of the total volume. Can I just ask you whether, you know, you are the only provider of those, bunkering services or you just, you know, or you are just a small player, and what's your kind of a market share there?
The State of Qatar, we are the only fuel provider and distributor. Yeah, I hope that answered your question.
Yeah. I mean, is this because that market is relatively small? Is it because you know, the
Yeah, you can refer to the Emiri decree of 2002.
Okay, I understood. Thank you very much. Thank you, Pradeep Kumar.
Thank you very much. Thank you, guys. I'll see you in the next quarter.