Hello, and welcome to Milaha. Please note that this call is being recorded. You will have the opportunity to ask questions to our speakers later on during the Q&A session. If you would like to ask a question by that time, please press star followed by the number one on your telephone keypad. I'd like to hand the call over now to Bobby Sarkar. Please go ahead.
Thank you, Gail. Hi. Hello, everyone. This is Bobby Sarkar, Head of Research at QNB Financial Services. I wanted to welcome everyone to Milaha's first quarter 2026 results conference call. On this call, as usual, we have Akram Iswaisi, who is E VP of Finance Investments, and Sami Shtayyeh, who is the VP of Financial Planning and Analysis. We will conduct this conference with management first reviewing the company's results, followed by a Q&A session. I would now like to turn the call over to Akram. Akram, please go ahead.
Thank you very much, Bobby. Thank you everyone for joining Milaha's Q1 2026 earnings call and your interest in the company. Before I get into the details of our Q1 results, I wanna go over two topics that I suspect most of you are interested in. The first has to do with last week's press release about our realignment of business segments, the second has to do with the regional conflict and its impact on our business.
Regarding Milaha's realignment, for those of you who are unaware or who have not seen the recent press release, Milaha announced that it reorganized two of its five business segments. Those two that were reorganized are Milaha Maritime & Logistics and Trading, basically. Milaha Maritime & Logistics now comprises container shipping, ports, and logistics operations.
These three units form the foundation for seamless end-to-end, door-to-door supply chain solutions, which is what we have been trying to build, and it was a natural step to bring them under one focus and unified segment. We also formed the MTS unit, Marine & Technical Services, and under that unit we put our shipyard, ship management, and shipping agency operations and combined them with our trading activities and renamed the segment Marine & Technical Services. Historically, the traded segment included heavy equipment sales as well as bunker and marine-related sales and services.
The marine-related activities serve the same customer base, vessel owners in our as our shipyard, ship management, and shipping agency businesses. They all serve one client, the vessel owners. By bringing all of these operations under one umbrella and focusing on serving the customer, we have created a dedicated segment that delivers a true one-stop shop solution for vessel owners and operators. Realignment did not happen in isolation and has been in the works for some time, with some synergies already delivered in recent quarters.
We are now formally closing the loop on this effort following the appointment of an Executive EVP to oversee the Marine & Technical Services segment, as well as the recent sale and divestment of the Hino dealership, which happened a few weeks ago, and which we owned since 1982. While relatively small in terms of contribution to the group, the exit of the Hino dealership reinforces our long-term strategy of concentrating on core business activities and exiting non-core activities.
Milaha's remaining three business segments will remain structurally unchanged. You will have seen that we started reporting financials under this new structure starting this quarter. In terms of the regional conflict, from the start of the war, the safety of our people was our top priority. With operations spread across multiple locations, ensuring that every employee returned home safely each day was our top priority. In parallel, we focused on maintaining and supporting supply chains to the State of Qatar and to our clients. We quickly diverted container ships to support supply lines, established new trade routes, and plugged into our agency network to keep cargo moving. We came up with creative ways to do this in the midst of a very disruptive environment.
That's operationally, but financially, we also took some preempted actions. We prudently implemented cost control measures and delayed some non-essential spend. Let me be clear, we have not stopped investments. We're still focused on growth and growing the top line. The operational teams and assets are on standby to support our clients once our clients resume normal operations and t his is our commitment. We firmly believe that our investments in our clients and relationships, in our people and assets, and in our growth initiatives will pay off post-conflict resolution. How has this war impacted our various segments?
Each one really needs to be looked at on its own and Sami will go through our view in the outlook section. In short, much of the impact is contained within our offshore segment. This segment caters to the energy sector with a concentration in Qatar. With the oil and gas production limited or on hold, we have had vessel suspensions impacted revenue, but also increased costs such as insurance, war risk bonus to crew, demobilization, etc. , all of which negatively impacted our results.
Ironically, while our Offshore segment was most impacted, we also are still most bullish on this segment once things settle down. The fundamentals are strong. We have a phenomenal, strong platform. We've invested in assets, and we believe we are primed to be beneficiaries of the work to come. Now on to our Q1 results. I'll start by going over our consolidated financial results and then move on to our various individual business segments before turning it over to Sami to go over our outlook. As usual, we will end the call with Q&A.
The key highlights of our financial results. Milaha's operating revenues came in at QAR 874 million for the three months ended March 31st, 2026, compared with QAR 759 million for the same period in 2025, or an increase of 15%. Operating profit came in at QAR 150 million for the three months ended March 31st, 2026, compared with QAR 212 million for the same period in 2025, for a decrease of 29%. Net profit for the three months ended March 31st, 2026, was QAR 297 million, compared with QAR 374 million for the same period in 2025, for a decrease of 21%. Lastly, our earnings per share was QAR 0.26 for the three months ended March 31st, 2026, compared with QAR 0.33 for the same period in 2025.
Now moving on to the business segments, starting with Maritime & Logistics. Operating revenue for Maritime & Logistics decreased by 15% or QAR 26 million, going from QAR 181 million in 2025 to QAR 154 million in 2026, driven by our container shipping unit, which saw volumes drop and thus revenue by QAR 38 million due to the regional conflict. In our logistics unit, higher project cargo movement, particularly in January and February, helped drive the QAR 11 million increase versus 2025 but then o perating expenses decreased by QAR 17 million, with most of that being variable in nature and tied to the revenue drop.
Non-operating income decreased by QAR 6 million, coming primarily from our QTerminals joint arrangement, largely due to reduced volumes at Hamad Port as a result of the regional conflict and t hat brings us to an overall bottom line decrease of QAR 15 million versus 2025. With respect to Offshore. Now Offshore continued showing top-line growth, with the revenue up 25% or QAR 102 million, despite vessel and work interruptions or suspensions faced in the month of March due to the regional conflict. The growth came from additional work and the inclusion of a new vessel in Q2 of 2025.
Overall expenses increased by QAR 132 million, with reduced margins on EPCIC work as that nears completion and war-related expenses driving the misalignment with revenue and thus impacting margins. Expenses for war risk insurance coverage, war risk bonus paid to crew, demobilization, and remobilization costs all drove expenses upwards. QAR 3 million of increased tax provisions drove non-operating expenses up and overall profit for the segment ended 51% or QAR 36 million down versus 2025.
Gas & Petchem. There was some modest growth in revenue versus 2025, totaling QAR 5 million, going from QAR 58 million to QAR 63 million in 2026. However, the non-recurrence of a favorable one-time item recorded in 2025, along with the loss of income from our VLGC divestment last year, reduced net profit for the segment by QAR 5 million, going from QAR 187 million to QAR 182 million in 2026. Our newly reported Marine & Technical Services. This segment reported a slight increase in revenue, going from QAR 89 million in 2025 to QAR 95 million in 2026, driven by proceeds from the sale of our Hino dealership, primarily, which I spoke about earlier.
Further revenue growth was hampered by the regional conflict, obviously, in this segment. Increased provisions for bad debt, added war-related costs, and other miscellaneous expenses reduced net profit by QAR 9 million versus last year, going from QAR 11 million to QAR 2 million in 2026. Lastly, in capital, there are some revenue expense moving parts, but in short, investments was impacted by QAR 4 million in lower dividends and QAR 6 million from the non-reoccurrence of a favorable one-off adjustment recorded in 2025. Those drove capital's net profit decrease of QAR 13 million compared to 2025 and t hat wraps up the segments, and I will now turn it over to Sami to discuss outlook for the rest of the year.
Thank you, Akram. Starting with Maritime & Logistics. In container shipping, most of our vessels are actually outside of the Strait of Hormuz and are working on moving cargo mainly from China and India to Oman. Surcharges have offset increased expenses such as insurance. The vessels in the Arabian Gulf are operating coastal routes and intra-Gulf with similar dynamics where surcharges are largely offsetting increased costs. In logistics, we can do what others cannot simply because of, amongst other things, linkages with our container shipping arm. We believe we're well-positioned for growth as clients are seeing how we're able to move their cargo.
Our QTerminals joint arrangement is financially exposed during the Strait of Hormuz closure. With limited ships calling Hamad Port, volumes are similarly limited, and that affects profitability. In Offshore, once the conflict is resolved, we expect to see strong recovery across the board. However, up until that happens, the segment is expected to underperform. In Gas & Petrochem, overall, we expect limited volatility due to the long-term nature of contracts we have in most business units.
There is some exposure during the conflict period, and particularly on the OpEx side with additional insurance and crew pay, but nothing material. In Marine & Technical Services, focus on this new segment will be on cross-selling services to existing and potential clients and extracting further synergies from the reorganization. While the conflict is ongoing, ship services are impacted due to fewer vessel calls to Qatari waters. On the flip side, however, the shipyard is active and operations are ongoing, so I t's really a mixed bag on performance up until the conflict is resolved for this segment. Lastly, Capital, where the focus will continue to be on yield enhancement. The ongoing conflict is not expected to have much, if any, impact on this segment. With that, we'll now open it up for questions and answers, operator.
At this time, I would like to remind everyone that in order to ask a question, please press star followed by the number one on your telephone keypad. We will just pause for a moment to compile the Q&A roster. Your first question comes from the line of Mohammed Al-Thunayan with Jadwa Investment. Please go ahead. Your line is open.
Yes, hi. Thank you for having us on the call. Congratulations on the great set of results, given the current geopolitical situation. One question from my side, which is related to the Offshore & Marine segment. Despite the conflict, the segment managed to grow revenues by approximately QAR 102 million, while, as you mentioned, EBIT went down due to some bonuses and costs that was incurred during the month of March. Can you shed some light on what was, I mean, the EBIT during the months of Jan and Feb, pre the additional cost incurred? Because it seems that it was really strong before the conflict impacting the cost structure of the segment.
Yes, thank you for the question. Listen, I think if... I mean, you highlighted, of course, an excellent point that we've been, we've been articulating, which was we're in a good growth trajectory the first couple of months until we got sucker punched, right? That's what I call it. In March, we got sucker punched. So, you know, we were at a good growth trajectory. We had a new vessel deployed, and there was plenty of work. So, you know, come March, you know, we had to deal with a, you know, difficult situation where we're effectively, you know, in a defensive position, trying to, first of all, ensure that we, you know, protect our people, you know, protect our assets and ensure that we, you know, support our clients, right?
Obviously, because we are, you know, we consider ourselves a, you know, an anchor in part of the key Qatar infrastructure, an anchor supporter of a lot of our clients and oil and gas clients in Qatar. We've been busy supporting our clients with a lot of different things, obviously, during March. As you've alluded to, the January and February were good months, and t hen March, you know, we've had to incur additional costs. Those costs include, you know, significant increased insurance premiums. And obviously, as you're probably well aware, you know, additional bonuses, additional crew costs that we had to incur. Usually our crew, you know, they are mobilized on vessels and then demobilized, and there were some delays on that because of, you know, difficulty in evacuating people.
You know, there were significant costs that we had to incur in the month of March to be able to deal with this situation. I can tell you that, you know, you know, post-March, you know, we're much more focused on managing these costs. You know, much more focused on replacing the revenue that we've lost. March was more of a, you know, when you get sucker punched, you're trying to recover from that punch and figure out, you know, what was the damage, you know, how was I impacted, and then coming up with plans on how to deal with it. This is exactly what we've done.
Just a follow-up on that. I mean, if it wasn't for the conflict, is it reasonable to assume an EBIT margin of around 20%, 19%, which is similar to the previous years, for the first quarter if things were normal or that might even be slightly higher, given the revenue increase that has been witnessed during the month of January and February?
Honestly, we've never given guidance on those margins. Our growth trajectory, we've said that again, historically, we've invested, we've announced and we've mentioned the market, how much CapEx we're investing in offshore. You know, and again, we've seen March and February, you know, the result of the acquisition of the new vessel, and there's plenty of work in Qatar. I mean, everybody knows that in the market. It's still a growing market, and there's significant potential, obviously, before the war. We were at a good growth trajectory, and we got primarily impacted because of the war. That's really, you know, that's all I can comment at this point. I cannot disclose much about margins because we've never discussed that publicly. We were a good growth trajectory.
And again-
Yes, that's reasonable.
You know, our view and as management, that once the conflict is over, we will come back. I mean, this business will come back roaring. You know, there's gonna be plenty of work, locally and as well as regionally. We're quite optimistic that once this conflict is over, and hopefully it's over soon, we will see significant recovery in this business.
Yeah. Thank you. Thank you very much. Thank you.
Your next question comes from the line of Hassam Muwatasim with Ashmore Group. Please go ahead.
Hello?
Hello.
Hi. Just a quick question, kind of in the same segment of Offshore & Marine. When we're looking at utilization, across vessel chartering and services, I mean, you know, where did utilization come in for the first quarter?
I mean, listen, it's difficult to give you an accurate utilization. I'll tell you why. Utilization was high for the first couple of months, and then in the month of March, we had some vessels that were temporarily suspended. Again, those vessels are being called in and out. It's not a number that I want to disclose right now in the market, just simply because of the fluidity of the situation and because of the, you know, the fact that some vessels were suspended temporarily, but then they were brought back to support the business. It's really one of those situations where it's a really fluid number. You know, month of March was, you know, a tough month for us. Some vessels were suspended, but some vessels were still working and t hat number continues to evolve on a daily basis, to be frank with you.
Okay. Thank you.
Your next question comes from the line of Nikhil Bhuta. Please go ahead.
Yeah, thank you, gentlemen, for taking the call. Actually, good to know that you guys are taking Q&A, and you're not afraid to bite the bullet. Okay.
Thank you.
To your, you know, in terms of your operating expenses, which has gone on the high. On the other flip side, wanted to understand in terms of managing your cargoes between Dubai and Oman, you know, how is it going on right now? I mean, maybe on the other side of U.A.E. also, the port. What is the current scenario right now? Can you tell us?
Well, listen, I mean, I think you probably are well aware that when the situation happened, you know, we had to react quickly to come up with solutions to serve our clients. I mean, at the end of the day, we worked with, you know, our clients as well as suppliers to find alternative logistics routes through Saudi and Oman. Let's put it this way, we've been able to create trade corridors through Oman and through Saudi to serve our clients, and that's been very successful. The fact that we already have a large platform with strong capabilities, and we were nimble enough to jump in, create solutions and execute. We are moving cargo from Oman into Qatar as well as Saudi.
You know, the other thing as well is that, you know, today, you know, we have some vessels, Milaha vessels that were basically stuck outside of the Strait of Hormuz, and we are leveraging those container ships to be able to complete the supply chain. That's the other thing that we've done. Again, we remobilize our vessels. We're able to use those vessels to support creating a supply chain that can serve Qatar today. You know, this is an area that, you know, we've done very well on.
We're able to come up with creative solutions to support the country, to support our clients. You know, we believe that even those relationships that we were able to develop during this crisis and our ability to show what we can deliver is gonna actually translate into long-term relationships which could help grow this logistics business.
Okay. Just a few words on in terms of your insurance premiums, which you mentioned, you know, have increased. How you are seeing it evolving right now in month of April as against March?
I mean, it's really, it's still more or less at the same level. Again, I think you know how insurance premiums are. You know, for some, you know, on average, I would tell you know, they've increased in March by a couple of million dollars . In April, it could go up a little bit more. It's still an evolving, you know, an evolving thing, but more or less it should be within that range.
Okay. Okay. Thank you, sir.
Thank you.
Your next question comes from the line of Ahmed Es'haqi with SICO. Please go ahead.
Hi, am I audible?
Hello? Yes, how are you?
I'm good. How are you? I have a couple of questions following up to the previous questions related to offshore. One question is related to the CapEx program. Do you expect any delays in the CapEx that is expected to be deployed? I think you've mentioned QAR 3 billion of CapEx and is the timeline changed?
Listen, right now it's very difficult to tell you. I mean, we already have some new builds in the process that we've already contracted and that will be deliverable, you know, throughout the year. The rest of the CapEx, it's very difficult to really opine on how we're gonna handle that. You know, we are, you know, looking at the situation month by month, we have plans. You know, if we reach the end of April, there are certain plans that will be triggered and executed. If we reach the end of May, you know, there are certain plans that are gonna be triggered and executed. In general, we've got a plan, a month-by-month plan of how to deal with CapEx items, OpEx items, and on top of that, to be frank with you, even revenue.
I mean, I can tell you know, coming out of the gates, we are pushing hard right now on growth. This is an area, you know, that we're really focused on because, again, we're not gonna sit here and, you know, continue to take punches as we did in the month of March. We are actually right now on the offensive trying to grow the business, you know, within Qatar and outside of Qatar, to be frank with you.
Mm-hmm.
You will see more of this over the next six months. Realistically speaking, it's difficult for me to come and tell you right now how this is gonna play out in terms of CapEx, we need to see how the situation evolves. You know, we're optimistic this conflict will get resolved soon. Then at that point in time, we can give you a little bit more visibility. I can tell you that we already have some contracted vessels that will be delivered, you know, effectively the second half of the year.
Got it. Thank you. If I could follow up, as of today, how much of the, let's say, CapEx that went off-hire are back and operational?
Have you seen some- Again, I mean, due to confidentiality, we can't really comment on that right now just because of the, you know. Again, due to confidentiality, we can't. The situation is fluid, to be honest with you. It's in and out on a regular basis. I can tell you that what we're doing is working closely with our clients, making sure that we support them. You understand the situation and the difficulty of the situation. What we, you know, what we committed to do is making sure that operationally, we're always on standby, you know, to respond to the call whenever the client calls and says, "We need you.
Mm-hmm.
This is our commitment right now to our clients, in Qatar.
Okay. One last question about the Maritime & Logistics segment. Do you have any plans to turn around the segment in the future? It looks like with the competitive nature of this segment, you've been facing some, you know, pressures. What is the long-term plan for the segment?
Well, I mean, I've mentioned at the beginning of the call that we restructured the organization, right? That should sort of give you an indication that we are restructuring because we're positioning ourselves for growth. I mean, this is, you know, this is something that we have been working on, which is, you know, building a- i f you look at logistics, container shipping and the port business, we are looking at building an integrated platform. Again, the reason putting it together is because we wanna be able to build a platform that we can grow, you know, regionally as well as internationally.
Part of the restructuring was to position the business for growth and to divest from non-core activities or distractions. We are very keen on growing that logistics and container shipping business. You'll see again, I think the second half of the year, we'll continue to see good results from logistics, as we continue to support the country and the region in terms of dealing with this situation. But the plans for turning around that division started already, a year and a half ago, and I've mentioned that on previous calls. I've also mentioned that we hired, you know, an executive, a seasoned executive to lead that business division and to turn it around.
In fact, that turnaround plan has been working, and that turnaround plan including, you know, restructuring the business, refocusing and looking at growth opportunities within Qatar as well as internationally. Again, our main focus right now is, you know, supporting the country, supporting our clients, and making sure that we support the country in maintaining its supply chain and being able to bring food and products into the country. That's our primary goal right now.
Perfect. Perfect. All the best for the rest of the year, and congrats on the good set of results.
Thank you very much. Appreciate it.
Your next question comes from the line of [Irkaz Anjir] with [Detent]. Your line is open.
Hello.
Hello. Thank you for the call. My question's on the Gas & P etchem outlook. As the majority shareholder in Nakilat, what are your expectations for the CapEx program? Do you guys expect that QatarEnergy will be able to, you know, fulfill the payments over the long term?
Unfortunately, we really can't comment on Nakilat. That's something I, unfortunately I cannot comment on this call. We have the absolute confidence in Nakilat and QatarEnergy, that they will continue, you know, to support the CapEx plans for Nakilat. Unfortunately, there's not much more I can say about that. There's nothing else I can comment on.
Sure. Sure. I mean, maybe on your own LNG carriers, which you have and, you know, both the jointly and the fully owned ones. I mean, you say that the outlook is stable. Do you expect, you know, the clients may default on any payments or the payments may be delayed if they're not being used? Or are these contractually-
Let's look into that.
They contractually have to be paid.
Listen, the vessels are contracted. The LNG market today, if you look at the spot market, they're phenomenal today. You're really in a fantastic market. The LNG market is a fantastic market to be in today. More importantly, I'm not really worried about, you know, delay in payments or default. We're confident in our clients' ability to be able to pay.
Okay. Thank you very much. Thank you.
Okay. Appreciate it.
Thank you, everyone. That concludes our Q&A session for today. I will now turn the call back over to Bobby for the closing remarks. Thank you.
Thank you, Gail. If this is all the questions we have for today, I wanna thank Akram and Sami for taking the time to go over the presentation and then answering our questions. Thanks, everyone. We'll pick this up again next quarter.
Thank you very much, everyone. Thank you.
Thank you all for joining. You may now all disconnect. Have a nice day ahead.