Hello everyone and welcome to Milaha Qatar Navigation conference call. Please note that this call is being recorded. I'd now like to hand the call over to Bobby Sarkar. Please go ahead.
Thank you operator. Hi. Hello everyone. This is Bobby Sarkar, Head of Research at QNB Financial Services. I wanted to welcome everyone to Milaha's fourth quarter and fiscal year 2025 results conference call. On this call we have Akram Bashir Iswaisi, who is the EVP of Finance and Investments, and Sami Shtayyeh, VP of Financial Planning and Analysis. We will conduct this conference with management first, going over the company's results, followed by a Q&A. I would now like to turn the call over to Akram. Akram, please go ahead.
Thank you so much, Bobby. Thank you everyone for joining Milaha's full year 2025 earnings call and your interest in the company. 2025 was a remarkable and record-breaking year for us, with all our segments posting year-over-year growth, with the exception of only one. In our core marine-related segments, Offshore continues to shine with over 50% net income growth and consistent yearly gains in operating profit margins. We remain committed and bullish on this segment, and we continue to invest in new vessels and capabilities to ensure continued success. In Gas and Petrochem, there were several moving parts impacting our financials, which we'll come into in a few minutes. Aside from net profit growth in our largest segment, we strategically divested from the historically volatile VLGC business.
Much work behind the scenes went into that and is another example of us enhancing what fits in strategically and cutting loose of what doesn't. Our maritime and logistics business faced headwinds that we've been talking about for quite some time. Container shipping rates remain well below levels of 2024, with geopolitical issues, additional vessel capacity coming online, and basic supply and demand economics each impacting our business in a negative way. In logistics, the competitive landscape is intense, with margins remaining razor-thin and under pressure. But with the addition of new products and service offerings such as pharma and chemicals, we're confident that things will move in the right direction. Overall, a good year that we're very proud of. Now on to the results. I'll start by discussing our consolidated financial results and move into our segments.
The key highlights of our financial results. Milaha's operating revenues came in at QAR 3.3 billion for the year 2025, compared with QAR 2.8 billion for the same period in 2024, for an increase of 17%. Operating profit came in at QAR 669 million for the full year 2025, compared with QAR 536 million for the same period in 2024, for an increase of 25%. Net profit for the full year of 2025 was QAR 1.27 billion, compared with QAR 1.12 billion for the same period in 2024, for an increase of 13%. Lastly, our earnings per share was 1.12 QAR for the full year of 2025, compared with 0.99 for the same period in 2024. Now, digging deeper into our segments, starting with maritime and logistics.
Operating revenue for Maritime and Logistics increased by QAR 36 million, going from QAR 828 million in 2024 to QAR 864 million in 2025, led by our container shipping unit. This was largely the result of the full year benefit of our China routes that picked up in the second half of 2024. Operating expenses increased by QAR 70 million and broken as follows. QAR 19 million of the increase being variable in nature and tied to the revenue growth, QAR 38 million of the increase coming mainly from the right of use accounting for two chartered in container vessels that joined our fleet in Q4 of 2024. QAR 31 million increase in salaries and wages due to increased crewing costs in our Offshore segment, along with additional staffing in our other units.
15 million increase in other operating expenses, mainly attributable to a one-off excise tax payment recorded in 2025. Lastly, we had a 38 million in increased fleet and technical costs transferred to our Offshore segment due to additional fleet expenses related to new vessel additions. Non-operating income increased by 27 million, with better performance from our two terminal joint arrangement, more than offsetting lower gains on the sale of assets that were recorded in 2024. That brings us to an overall bottom line decrease of 7 million versus last year. In Offshore, our operating revenue grew by 471 million or 32% versus last year. Increased project work and a specific EPC-related work, and the addition of three vessels from mid-year 2024 drove that growth. Overall expenses increased by 328 million.
QAR 173 million are due to operating supplies and expenses being directly variable in nature and tied to the growth in revenue. QAR 52 million increase in salaries and wages from increased staffing to support current and expected future expansion. Lastly, a QAR 45 million increase in depreciation and a QAR 39 million increase in vessel technical expenses, both primarily driven by fleet additions and fleet growth. At the non-operating level, there was a QAR 35 million increase in expenses, primarily driven by increased tax provision tied to the recently enacted Global Minimum Tax, which was implemented in Qatar in 2025. The net income result was year-over-year growth of QAR 107 million or 52%. Moving on to Gas & Petrochem. Operating revenue increased by $57 million, going from $246 million in 2024 to $304 million in 2025, for an increase of 43%.
That increase was driven by two VLGCs that were primarily part of the Gulf LPG joint venture that we had with Nakilat, which we took full ownership of in early 2025. After we took ownership of the vessels, we started recording results line by line, in the operating revenue, as opposed to recording below the operating profit level as our share of results of JVs, which was done previously. Operating expenses increased by $20 million, driven mainly by the full consolidation of the two VLGCs we acquired. At the non-operating level, profits decreased by $6 million, driven by the following, an $84 million gain on the sale of the two VLGCs that I just referred to above, $119 million lower results from our joint ventures. This is mainly Gulf LPG and is due to us consolidating line by line fully in 2025, along with us divesting from the business.
A $31 million impairment. Lastly, a $12 million increase in our tax provision. Net profit for the segment came in at $575 million, versus $726 million in 2024, for an increase of 4%. Our trading business unit recorded a slight increase in revenue going from $196 million in 2024 to $201 million in 2025, mainly from higher marine related and bunker sales. Operating expenses came in lower by $5 million, driven by reduced provisions for obsolete and slow-moving items.
With the end result being a $10 million upward swing in the bottom line versus last year. Lastly, in Capital, revenues dropped by 9% or $38 million versus the same period last year, with $19 million drop from lower Qatar Quarries sales and $24 million drop coming from our investment unit. Investments was impacted by $33 million in lower local equities dividends income due to a one-time additional midyear distribution in 2024.
The lower dividends were partially offset by higher returns from the rest of the investment portfolio. On the cost side, total expenses came down by $16 million, with $15 million of that related to lower Qatar Quarries cost of goods sold tied to the reduced sales. At the non-operating income level, there was $29 million pickup versus 2024. We had $54 million in lower real estate impairments, partially offset by $13 million in higher tax provision and $10 million in lower interest income. All in all, Capital recorded a net profit increase of $7 million compared to the same period last year. That wraps up the segments, and I will turn this over to Sami to discuss our outlook for the rest of the year.
Thank you Akram. Starting with Maritime and Logistics. On the container shipping side, we expect rates to remain volatile given political and economic trade and tariff issues. In logistics, pretty much the same story as before. The environment remains very competitive and challenging, but we're optimistic that new product and service offerings and turnaround efforts will improve results. In Offshore, on the support vessels and services side, we expect to see continued growth, particularly longer term, with all the expansion work in Qatar's oil and gas industry. For the harbor and industrial logistics operations, we expect stable revenue given the long-term nature of most contracts. In Gas and Petrochem overall, we expect limited volatility due to the long-term nature of contracts we have in most business units, particularly after exiting the VLGC business.
In trading, our focus remains on optimizing the segment and continuing our focus on profitable growth and margin improvement. Lastly, in capital, where we will continue to focus on yield enhancement. With that, operator, we'll now open up for the questions.
We are now opening the floor for question and answer session. If you'd like to ask a question, please press star followed by one on your telephone keypad. Your first question comes from Mohammed Al-Thunayan of Jadwa Investment. Your line is now open.
Yes. Hi, thank you for having us on the call, and congratulations on the great set of results. Two questions from my side. The first one is related to the significant improvement in the offshore segment, and more specifically during the fourth quarter of 2025. The segment's Q4 revenue is $560 million a bit over $118 million. Should we expect this improvement to continue, I mean, with us during 2026? Or was there any one-off positives or faster execution to some of the company's EPC contracts during the fourth quarter of this year? That's the first question.
Okay. Thank you for the question. I mean, if you look at our business and our revenue mix, we have a mix of largely contracted revenue, so we have visibility on long-term cash flow, essentially. We also have a percentage of our revenue that's also tied to contracts. There are gonna be some volatility all in all. For the next 2-5 years, in our plan, we're expecting a significant number of service contracts, EPC work, and so the momentum will continue for the next few years. We're very optimistic. I've mentioned that in previous calls, we have a large CapEx program with a big chunk of that actually going offshore that continue to invest in new vessels and new capabilities and equipment because we're very optimistic on offshore.
Offshore is gonna be a major driving engine for Milaha for the next 2-5 years, at least.
Yeah, that's clear. The second question is related, again, to the significant improvement in QTerminals. The company reported direct income of QAR 52 million, up from QAR 23 million last year, due to higher revenues, which were up by approximately 7%. Should we expect this momentum to continue as well? What's the reason behind the decline in depreciation and amortization for QTerminals? It dropped from QAR 120 million last year to QAR 112 million this year.
Well, I don't want to comment too much about, again, it's a company that we're invested in. Let me tell you, let's start off. We hired a new CEO for QTerminals, a very capable and seasoned executive who, right off the bat, already started restructuring the organization, cleaning up the balance sheet, cleaning up the P&L, and you're beginning to see the results of that in the performance of QTerminals. That's number one. Number two, in the past, QTerminals was impacted by various geopolitical issues. Outside of Qatar, effectively, we have investments outside of Qatar, so there was an impact there, and that had an impact on volumes. In general, there is a growth strategy for that company, and we're very optimistic on the, let's say, the growth plans for that business unit, for that entity, okay?
Mm-hmm.
If you look at... Aside from that, I don't want to comment too much on their P&L.
Yeah.
Again, there's been cost-cutting. There's been exiting of, let's say, selling of non-performing assets.
Mm-hmm.
You see that reflected in potentially lower depreciation, improvement in existing asset utilization. That's basically what's happening. There's a good amount of optimization that's happening, not only across QTerminals, but a lot of the business units that we are invested in.
Yeah. Just to follow up question maybe on the first question, since you mentioned that there is a significant CapEx that will be basically invested in the offshore segment. By looking at the capital commitments from the financials, it seems that's around QAR 2 billion, up from QAR 1.7 billion last year. Is it fair to assume that majority of those capital commitments would go toward the offshore segment?
Not all of them.
Okay.
As an organization, if you look at recently, we've announced our joint venture with Fincantieri. What we've done is we have a new strategy for the organization that we will share more in the future, but part of that is focusing on defense and defense services. Milaha, as the oldest shipping company in Qatar, has the platform and the capabilities and the depth to continue to serve the various Qatari, let's say, pillars, Qatari entities, including the defense sector or different sectors between oil and gas, we're already invested in the oil and gas sector, and we are a major supporter of the oil and gas sector in Qatar. The defense is another area where we will continue to grow. We're already doing work in that space on a minor scale, but that's going to be a key area of our strategy going forward.
Because again.
Sure
We do have the capability to serve our stakeholders. If you look at Milaha as an organization, it's an integrated platform, and we have the ability to serve trade, oil and gas, and defense.
That's very clear. Thank you very much. Over.
You're welcome.
Your next question comes from the line of Nikhil Patel of QNB Financial Services. Your line is now open.
Yeah hi. Thank you for taking my questions. Well, regarding your first of all, Gas and Petrochem division, the addition of your VLGC which took place in the second quarter. Yes, the initial bump up was there in the second and the third quarter. I mean, second quarter. From third quarter, fourth quarter, we are seeing a downturn. Am I right to assume that that has got to do with some loss of contract? Because largely, it looks like a stable revenue stream for you.
You're talking about Gas and Petrochem, right?
Yeah.
Well, if you look at Gas & Petrochem, if you're comparing Q3 to Q4?
Right.
Okay. Well, if you look at Q3 to Q4, Q3 had a huge pickup, primarily because we booked the gain on the sale of the VLGC vessels. Right? About QAR 84 million. There's also Nakilat. If you look at Nakilat's numbers, which get reported in Gas & Petrochem, Q4 was lower than Q3. Again, it's a function of timing. Again, Nakilat's results and the timing related to the gain on the sale of the VLGC. Because Gas & Petrochem, essentially most of our vessels are contracted. The only variability we'll have would be Nakilat, and then one-off items like the gain on the VLGC sale, which was recorded in Q3, and obviously will not recur in Q4.
Okay. Coming to your other things in terms of maritime and logistics, container shipping, for example, again, we are seeing dipping down. You mentioned about China, a factor. No doubt it has improved initially in 2024, and later half and first half of 2025. Of late, we are seeing a downturn in that also in terms of container shipping revenues. There has been a substantial downturn actually in the fourth quarter. What has been the reason behind that?
Well, that business is tied to, it's a spot business, right? Rates are not fixed. They're tied to the market itself. That spot business in general, any spot business in shipping will experience volatility. If you look at tankers in general, if you look at CPP, clean petroleum products, extremely volatile. Container shipping is also volatile. If you look at the Shanghai Containerized Freight Index, you will see that last year, freight rates were extremely high. Close to, let's say if you're talking about maybe 3,800 to 4,000, in 30th December 2025, it's about 1,500. Again, if you look at that index, that will tell you exactly what happened in the market. Again, that's a function of a lot of different things. Extra vessels in the market, the deliveries of vessels, geopolitics.
Geopolitics can increase rates, things normalize, rates come down. That's primarily what has impacted container shipping. You'll see that when you look at the container, if you look at the Shanghai Containerized Freight Index, you'll see that volatility, you'll understand that.
How do you see it right now currently going on in the first quarter? How can we assume going forward in 2026?
I can't give you a forecast. Again, it's driven by the market. What we continue to focus on is how do we manage our costs, right? How do we react to that? That business is volatile, but what matters is how you react to the market and how you position yourself. What goes down, again, rates come down, eventually they're going to have to come up again. You have to look at the fundamentals of the market and understand how you position yourself. Do you buy vessels when the market goes down? Do you position yourself for the recovery of the market and the pickup in the market? That's how we operate that business.
Yeah. In that case, do you see, to a certain extent, let us assume first quarter could be again in an, what you call that volatile situation, but price and your freight logistics and your CPP could support it, whatever downturn then we are seeing so that overall revenues for maritime could be stabilized. Do you see that going forward?
Again, it's very difficult to predict that. If you look at, again, you go look at the Shanghai Freight Index, it dipped in the Q4, but it picked back up again. If that trend continues, that means in Q4, rates will go up. Again, we're impacted by a lot of geopolitical issues today, which again could mean that rates will end up going up again. Very difficult to predict.
Okay. Lastly, on any impairments which you likely see it going forward in any divisions?
We don't have a forecast of impairments. I've mentioned that in previous calls. We follow the accounting standards, we engage with the auditors, and we deal with it accordingly. You cannot forecast impairments and what they should be or should not.
Okay. Thank you, sir.
Thank you.
Again, if you'd like to ask a question, please press star followed by one on your telephone keypad. Your next question comes from the line of Hussam Moatassem of Ashmore. Your line is now open.
Hi, good afternoon. A couple of questions from me. Just the first is if we can get a little bit more color, when you're talking about the expansion in the offshore segment. Is that specifically in the services sector and is that linked to North Field? And just on that, is that kind of ongoing servicing or is that just in the expansion phase?
Well, if you look at the expansion of Qatar, there's significant amount of work in North Field expansion, clearly. Some of it has to do with the initial phase or construction, right? There's a lot of work that relates to ongoing support, and that's what we're focused on. What we're looking at is how do we continue to build resilient cash flows and resilient revenues. When we invest in CapEx, we have a big budget for CapEx. I've mentioned that it's gonna be anywhere in the range of QAR 1 billion-QAR 1.5 billion. We're not going to invest CapEx in short-term projects. Our plan is to invest in long-term contracts, supported by resilient cash flow, and that's really what we're focused on. Repairs and maintenance is gonna be an ongoing work as well.
The beauty of that work is that it doesn't involve CapEx. Because we have the platform, the vessels, the assets, and the capabilities, that will be additional work that just adds to the bottom line and it's higher margin work.
Okay. Basically, any revenue that's gonna come in or any CapEx spend is gonna be linked to the long-term kind of visible-
Largely, yes.
Revenue.
There'll always be an element of services that we'll provide.
Yeah.
There might be some varied business from quarter- to- quarter, because that's, again, services could be a one-year project, it could be six months, it could be a three months project. Most of the work or revenue that we're targeting is recurring revenue, because again, we are investing heavily in CapEx, and we want to make sure that investment is supported by contracted long-term platform.
Okay. No, that's clear. Just one more. In terms of just the Gas and Petrochem segment. So am I right in assuming there's kind of no more spot exposure and the vessels within that are now all on long-term charters?
That's correct.
Okay. No that's great. Thank you. That's all for me.
Thank you very much. Appreciate it.
We don't have any pending questions. I'd now like to hand back to Bobby for final remarks.
Okay. Thank you. If we don't have any further questions, we can end the call for today. I want to thank Akram and Sami for taking the time to go over the presentation and answer all our questions. We can pick this up again next quarter. Thanks everyone.
Thank you so much everyone. Appreciate it.
Thank you for attending today's session. Have a good day.