جلسات مناقشة علاقات المستثمرين
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جلسة مناقشة علاقات المستثمرين للربع الرابع من 2022
Shell Oman Marketing SAOG Q4 Investor Relations - MSX Engagement Session
Duration: 59.48
0:00 – The video starts with a welcome screen. Audio begins at 0:20
0:20
[Burair Al Lawati]
Bismillah Rahman Rahim, Asalamualaikum, welcome everyone to our quarterly event
0.30
[Burair Al Lawati]
Thank you for attending our second session with the Muscat Stock Exchange.
0.43
[Burair Al Lawati]
Addressing the investors and the financial analysts and inviting you to participate in this virtual session,
0.50
[Burair Al Lawati]
which is held in compliance with resolution number E/109/2022 by CMA.
0.57
[Burair Al Lawati]
The main aim of this session is to discuss Shell Oman Marketing Company’s financial results for the 12 months ended 31st December 2022.
1:07
[Burair Al Lawati]
As you know the results were disclosed in MSX on 15th of February and subsequently published following the board's meeting by the end of the last month.
1.15
[Burair Al Lawati]
This was also discussed in our AGM that was held on March 9th which will be
highlighted by our CFO.
1.22
[Burair Al Lawati]
The financial statements and annual report have been uploaded on MSX and Shell Oman website last week, and our financial reports and directory reports were also published in the newspapers.
1.34
[Burair Al Lawati]
The agenda for the day is at on the screen, we will start with introducing the presentation from the company so if you can go please, Lamees.
1.43
[Lamees Al Lawati]
Hi everyone, Asalamualaikum and thank you so much for joining our second investors relations session.
1.49
[Lamees Al Lawati]
I am Lamees Al Lawati and I'm the Chief Financial Officer of Shell Oman marketing.
1.54
[Sultan Al Shidi]
Hi everybody thank you for your attendance as well, am Sultan Al Shidi, am incharge of people agenda HR facilities…facilities and services as well, in the capacity of a GM.
2.06
[Burair Al Lawati]
Thank you, thank you Sultan. So if we go next to our HSSE brief, as you know HSSE is our number one priority in Shell.
2.15
[Burair Al Lawati]
That is why we request you to make sure that you are safe and secure throughout this session and you can hear any potential alarms around you and evacuate if that happens.
2.25
[Burair Al Lawati]
Please get familiar with your surroundings and including the emergency exits, assembly points and be careful about any hot drinks around you…
2.33
[Burair Al Lawati]
…that may damage your laptop in case of a spill or can be hazardous to you.
2.38
[Burair Al Lawati]
We would also like to request all the audience to wait until the Q and A session, to present their questions…
2.44
[Burair Al Lawati]
…if you think of one during the session please feel free to target in the chat box and we'll come back to it in the Q and A time frame.
2.51
[Burair Al Lawati]
We request everyone to be on mute obviously, unless in the Q and A session when we'll go around the audience to take questions.
2.59
[Burair Al Lawati]
Everyone is welcome to share their questions and feedback.
3.03
[Burair Al Lawati]
But also we likely to request you actually to stick to the agenda of the day…
3.08
[Burair Al Lawati]
…in case of questions that are not relevant to the agenda items to them we will note them down and get back to you as soon as we have the answers.
3.16
[Burair Al Lawati]
Thank you and now let's start with the HSSE results for 2022.
3.22
[Burair Al Lawati]
As you can see Shell Oman Marketing Company ended 2022 with 365 days without loss of primary containment and 314 days without harm…
3.33
[Burair Al Lawati]
…which reflects about continued commitment which is strong to HSSE.
3.38
[Burair Al Lawati]
Unfortunately, we had one incident of lost time injury earlier in 2022 as shown in the screen.
3.45
[Burair Al Lawati]
The company invested in various initiatives to ensure HSSE Readiness…
3.49
[Burair Al Lawati]
…including emergency drills, seminars on worker’s well-being, security and process safety environmental Management, Health, road safety…
3.59
[Burair Al Lawati]
…and many other areas of HSSE that strengthen our culture of safety…
4.05
[Burair Al Lawati]
…and also continue to improve our leadership as a HSSE partner in the society.
4.13
[Burair Al Lawati]
Now let's move to my colleague, let me switch to Lamees, who is the CFO but also today as the Acting CEO to present the AGM and the financials from here.
4.23
[Lamees Al Lawati]
Sure, thank you Burair. Taking from Burair, just a confirmation to the investors who were able to attend and for the ones who are not able to…
4.31
[Lamees Al Lawati]
…so just quickly run through the AGM that was held on the 9th of March, in the Intercontinental Hotel…
4.37
[Lamees Al Lawati]
…and also virtually through the MCD's electronic platform to consider an approved agenda items.
4.43
[Lamees Al Lawati]
Now the summary announced that all the agenda items were approved including the board of directors report regarding the company's activities and financial position.
4.51
[Lamees Al Lawati]
The corporate governance report for the year, the Auditors report including financial statements as well for the financial year and the 31st of December 2022.
5:00
[Lamees Al Lawati]
In addition to that the proposed cash dividend of 57 baiza per share was approved and supported by the shareholders,
5.06
[Lamees Al Lawati]
As well as the sitting fees remunerations of the directors for the year ended 31st of December 2022, as well as the proposed remuneration fees for the upcoming year.
5:16
[Lamees Al Lawati]
The related party transactions and expenditures in support of Social Services are also considered by the shareholders and supporters.
5.24
[Lamees Al Lawati]
Finally the shareholders elected two board members to fill in the back room seats who are Ms. Asma Al Ghabshi and Mr Moosa Al Sharyani.
5.33
[Lamees Al Lawati]
Both are seasoned professionals who are part of the wider Shell Group organization and who come and join our board…
5.39
[Lamees Al Lawati]
…with a wealth of experience in the areas of Human Resources, Talent Development, as well as Contracting and procurement and business Improvement.
5:50
[Lamees Al Lawati]
The disclosures related to the resolutions that were approved by the shareholders during the AGM were immediately published on the MSX website following the AGM.
6:03
[Lamees Al Lawati]
Now, if we go through the financial performance of the company for the… for the last Financial year, and as Burair has mentioned…
6.12
[Lamees Al Lawati]
…the financial results were actually published and are available the detailed financials are available in our website as well as in the MSX platform.
6.20
[Lamees Al Lawati]
And the financial performance for the ones who had an opportunity to go through them have actually reflected growth…
6.26
[Lamees Al Lawati]
…like you have seen in the numbers in comparison to the same period last year influenced by the overall recovery that we have seen in the market in… in 2022.
6:35
[Lamees Al Lawati]
Now, our Top Line has reflected a growth of 25 per cent and our gross profit at 35.3 million riyals, was 18 per cent higher than the same period last year.
6.46
[Lamees Al Lawati]
We saw the volume growing gradually and towards the end of the year we had reported volume growth of about 16 percent.
6.53
[Lamees Al Lawati]
We have started slightly slower than expectation at the beginning of the year as the market was adjusting and was recovering post the pandemic…
7.00
[Lamees Al Lawati]
…but then we have seen gradual uplift and picking in a volume as the [inaudible] progress with a high speed reported in the third quarter of the year…
7.07
[Lamees Al Lawati]
…and afterwards in Q4 we have seen the volume and the market slightly flat I think.
7:12
[Lamees Al Lawati]
We have seen the demand picking in… in both segments of the business and the B2C and the B2B segments as well at different scales.
7.21
[Lamees Al Lawati]
we have supported the growth that we have seen in the B2C segment through investing in across the various segments that we are operating in…
7.30
[Lamees Al Lawati]
…a nd we have invested in six service stations six new service stations in strategic locations in the country during the year.
7:38
[Lamees Al Lawati]
And obviously these service stations contributed positively and to the growth of the business and to the higher volume that we have reported during the year.
7.48
[Lamees Al Lawati]
Now as… as the obviously the business picks and as the profitability fixed we obviously would expect classically for the cost to be picking as well.
7.59
[Lamees Al Lawati]
So we continued investing in… in good costs that are part of the overall strategic growth direction of the company,
8.06
[Lamees Al Lawati]
You would see costs like manpower have gone probably higher this year and consciously by the organization.
8.12
[Lamees Al Lawati]
Costs that are directly related to supplying and servicing the volumes that we have delivered during the year have also gone higher…
8.17
[Lamees Al Lawati]
So, things like operational costs, Logistics, Transportation costs and we have consciously also invested or picked up our marketing activities and our promotion and activities during the year.
8.28
[Lamees Al Lawati]
Now the cost of financing have also gone higher, part of it reflects the interest element related to the long-term leases that we're reporting on in our balance sheet.
8.39
[Lamees Al Lawati]
So, a significant amount of the interest of financing costs that we have reported during the year is actually related to that.
8.46
[Lamees Al Lawati]
But we have also seen the interest cost picking for borrowing like we have seen probably and like you have noticed in the industry in general.
8:54
[Lamees Al Lawati]
We have reported a net income of 5.7 million Omani Riyal and that was 58 percent higher than the same period last year.
9:03
[Lamees Al Lawati]
Now, Shell has the highest brand awareness and capability as a brand to the community in Oman through interactions…
9.08
[Lamees Al Lawati]
…with hundreds of thousands of customers and a network of over 200 branded sites with the material turnover and consistently profitable business performance,
9.16
[Lamees Al Lawati]
Some also contributes to the National economy through dividends, paying taxes, fees and loyalty while continuously investing for growth…
9.24
[Lamees Al Lawati]
…and help to create jobs as well as business opportunities and the value chain of the company.
9:30
[Lamees Al Lawati]
We also realized that the industry is now rapidly transforming through digitalization and new business models…
9:36
[Lamees Al Lawati]
…and that has also reflected in a lot of investments that we have done across the different segments uplifting the… the…
9:42
[Lamees Al Lawati]
…technological platforms that we're operating in and creating value propositions for our customers across…
9:48
[Lamees Al Lawati]
…the value chain we'll cover part of that during our business update later today and the company obviously remains…
9:53
[Lamees Al Lawati]
…committed to pursuing all opportunities within you to maintaining the company's growth and enhancing shareholder’s value at all times.
10.00
[Burair Al Lawati]
Thank you, thank you Lamees and now we'll move to Sultan for the people in part and the HR updates
10.06
[Sultan Al Shidi]
Thank you, Burair.
10.08
[Sultan Al Shidi]
So, honestly one of the critical changes we brought last year is to restructure our company that was successfully managed and delivered so…
10.18
[Sultan Al Shidi]
…we welcome our new management team.
10:22
[Sultan Al Shidi]
The objective of that restructuring was the matter of the global structure we were we are similar linear with the customer-first mindset so it's not only
10:33
[Sultan Al Shidi]
For just the existing business but to create new business and approaches which is competitive and agile from the outset…
10.42
[Sultan Al Shidi]
…as well we were we are like willing to deliver the world-class asset management and the most integrated value for some so honestly we would like to make sure…
10:53
[Sultan Al Shidi]
…that we make the best of the core capabilities and create and integrated teams with clear accountabilities enable quick decision making,
11.02
[Sultan Al Shidi]
We would use the overlap and simplify and improve… simplify and improve the support so and…
11:10
[Sultan Al Shidi]
…even we are like distributing the profit centre in a more spread manner at the
profit centre and…
11.18
[Sultan Al Shidi]
…we are managing cost because this is one of the main objective is it's a one about sustainability using the operating expansion…
11.27
[Sultan Al Shidi]
…and the combination of simplifying your organizational ways of working,
11.31
[Sultan Al Shidi]
So, on top of the restructuring as well we managed to Resource all those capabilities that we are looking for…
11.38
[Sultan Al Shidi]
…and willing to ensure that those capabilities are developed and are ready for the future.
11.44 - 11.53 (INAUDIBLE)
11:53
(Sultan Al Shidi)
As when the company has demonstrated its commitment to maintaining a value proposition and attraction retains the best talent…
11.59
(Sultan Al Shidi)
Providing them with the meaningful challenging rewarding roles and grooming them to become future leaders.
12:05
[Sultan Al Shidi]
Number of staff is 232 as of today and, we crossed the year with an Omanisation rate of above 96,
12.15
[Sultan Al Shidi]
There was a very healthy staff turnover rate and 2022, as well we inaugurated the new head office…
12:24
[Sultan Al Shidi]
…in a… from a sustainability view the new building has been designed taken to consideration the building research establishment environment assessment method.
12.34
[Sultan Al Shidi]
It's an international certification requirements with an approach to energy and efficient design following mean lean green structure.
12:42
[Sultan Al Shidi]
Other energy saving and sustainable measures considered during the construction phase as well including…
12.49
[Sultan Al Shidi]
…sourcing thicker materials, recycle- recyclable material made carpets, electric car charge points and solar power.
13.02
[Sultan Al Shidi]
Further investment were made in upgrading our parking with the solar… solar panel to reduce carbon emissions from our operations…
13.09
[Sultan Al Shidi]
…and reduce our power winds creating long… long-term added value for our shareholders.
13.15
[Sultan Al Shidi]
On top of that 23 tonnes of waste from the old building were recycled and they were given to make different boxes.
13.25
[Sultan Al Shidi]
In addition, we worked in introducing recycled and waste protection initiatives in our facilities and when it comes to powering lives…
13:36
[Sultan Al Shidi]
We introduce a comprehensive insurance and healthy support by creating to the needs of the diverse workforce…
13.43
[Sultan Al Shidi]
…ensuring care well-being and inclusion is admitted in everything we do.
13.48
[Sultan Al Shidi]
Finally, we are like allowing the opportunities to our use job-seekers students from colleges to come and join us on this journey of success.
14.00
[Sultan Al Shidi]
Therefore, we boarded seven adult interns, 33 Summer interns and all of them were like given the opportunity to learn and contribute to our agenda.
14:12
[Burair Al Lawati]
Thank you, Sultan for the HR updates and now let's move to the business update which will be covered by me.
14:20
[Burair Al Lawati]
So, in terms of Mobility the business continued to its commitment to offer world-class customer experience and operational excellence.
14.27
[Burair Al Lawati]
With at most commitment to HSSE being the core Focus in term as Lamees mentioned earlier,
14:33
[Burair Al Lawati]
The company invested in increasing its Network by adding six new service stations in… including in the Batinah Expressway as you may have might have seen.
14.42
[Burair Al Lawati]
Which brings the total service stations to 206. In the same time we continue to focus on our differentiated fuels which is the Shell V-Power or unbeatable clean performance fuel…
14:53
[Burair Al Lawati]
…and introduced also night shops in 2022, as well as converting three other shops to Shell Select brands.
15.03
[Burair Al Lawati]
In… in addition we continue to leverage our partnership in contract management to maximize the return from our integrated and diverse offering across our network.
15:13
[Burair Al Lawati]
As for energy transition we have already as a business into Mobility we have already started embarking that journey a while ago.
15:21
[Burair Al Lawati]
Including through Innovative and Sustainable Solutions to reduce carbon footprint in our substations.
15.29
[Burair Al Lawati]
This has been also showcased through the introduction of EV chargers for our E-mobility investments…
15.36
[Burair Al Lawati]
…and earlier in… in 2022 we also launched a number of or installed a number of solar panels, LED lights and high efficient appliances that help upgrading the efficiency of our sites.
15.51
[Burair Al Lawati]
From the fleet solution point of view it is focusing on increasing customer portfolio and strengthening its customer value proposition through digitalization and operational excellence.
16.01
[Burair Al Lawati]
It's worth mentioning that this is the actual 25th… 25th anniversary of the Shell Fuel Cards in Oman.
16.08
[Burair Al Lawati]
So, Shell Oman was the first to launch Fuel Cards in Oman back in the in those days. We were also the first to launch a vehicle recognition system a few years ago.
16:18
[Burair Al Lawati]
And we have a number of exciting plans in this area to enhance our customer’s experience make it more secure more efficient and contribute to their Fleet Management efficiency…
16:32
[Burair Al Lawati]
…as was as well as profitability, you may notice also some of them will be crossover into the B2C sector in a SME sector as well.
16.41
[Burair Al Lawati]
From lubricants point of view, the business witnessed positive recovery in the overall market of… in terms of demand despite the ongoing supply chain constraints and logistical challenges…
16:52
[Burair Al Lawati]
…which had impacted our overall cost in the finished lubricants and its profitability however the commercial lubricant segments not maintain its Market leadership…
17:03
[Burair Al Lawati]
…And grew volumes by winning extra market share with B2B customers as well as growing its B2C distributors volumes…
17.11
[Burair Al Lawati]
…and maintain strong footprints in the oil and gas sector and renewed this long-term partnership with valuable existing accounts.
17.19
[Burair Al Lawati]
In terms of export, we have increased our volumes in export market compared to their previous year…
17.26
[Burair Al Lawati]
…and we continue to leverage our ISO:9001 Certified Shell Lubricants blending plants (Inaudible)
17.33
[Burair Al Lawati]
… the only… actually it's the only ISO-certified lubricant blending plant of its kind in Oman.
17.38
[Burair Al Lawati]
So we promote ICV – In-Country Value through meeting the local demands, the needs of the local demands as well as exports and increasing our production for both markets.
17.52
[Burair Al Lawati]
Shell lubricants has also retained number one position globally as the leading supplier of automotive and industrial lubricants for 16 years.
18.02
[Burair Al Lawati]
And in terms of energy transition we have introduced a comprehensive Waste Management solution…
18.06
[Burair Al Lawati]
…that offers customers ability to treat waste in the most efficient and compliant manner legally and HSSE wise and also offer potential recycling ability.
18:15
[Burair Al Lawati]
In addition to carbon-neutral products we introduced to recycle plastic in our bottles which also helps our carbon footprint and respect for nature aspirations.
18.29
[Burair Al Lawati]
From Trade and supply point of view, HSE as well… continue to be a top priority with a focus on road transport safety and process safety to ensure goal zero.
18.41
[Burair Al Lawati]
To improve and Road Transport standards, artificial intelligence has been used…
18.46
[Burair Al Lawati]
…which in the system is called fatigue detection devices which were installed in our fleets of tankers, contracted fleets.
18.55
[Burair Al Lawati]
We have also worked with our partners to introduce a new Fleet of trucks that feature aluminium tankers and that helps the weight of the trucks…
19.02
[Burair Al Lawati]
…and as a result increase fuel efficiency and reduce both cost and carbon footprint.
19.07
[Burair Al Lawati]
We were able to achieve 12 percent increase in fuel efficiency leading to reduction fuel consumption and carbon footprint.
19:14
[Burair Al Lawati]
In terms of respect in nature and shareholder value we have worked to reduce waste by recycling products instead of disposing…
19.20
[Burair Al Lawati]
…which helped recovery of course and recycled also Old Stock to high standards of products which created additional savings.
19.31
[Burair Al Lawati]
You might have noticed from the structure that was presented by HR that there is a new business GM called low-carbon products and sectors.
19.39
[Burair Al Lawati]
This has been introduced as explained by a chart before to help our customers find ways to reduce their overall carbon footprint including in sectors that are difficult to decarbonize such as aviation, shipping or both freight and industry.
19.53
[Burair Al Lawati]
To help accelerate the transition to net-zero emissions, we built our own existing relationship with our stakeholders…
20:00
[Burair Al Lawati]
… such as energy suppliers, policy makers, infrastructure owners and consumers to support a sector-based approach.
20.09
[Burair Al Lawati]
This may have started with us little as going green in terms of paper use, invoicing and digitalization but also building on the existing businesses,
20:18
[Burair Al Lawati]
So in commercial views business experience growth in volumes despite challenging B2B Market environment and…
20:23
[Burair Al Lawati]
…marine business committed continue to commit to HSE and operation excellence and leveraging Global expertise to provide bunkering solutions to local and International customers.
20.33
[Burair Al Lawati]
We are also leveraging our retracted vessel which is also serving our customers in various ports in Oman…
20:43
[Burair Al Lawati]
In aviation business, compared to the last two years, the global Aviation and tourism sector experience increase in air travel.
20.50
[Burair Al Lawati]
The Company focused on retaining key contracts on Muscat International Airport and Salalah Airport who are continuing to apply efficiency and cost optimization solutions to its operation
21.00
[Burair Al Lawati]
To improve its profitability and continue to serving customers safely and reliably.
21:05
[Burair Al Lawati]
You remember that we had the disclosure back in November about Muscat International Airport but recently maybe two weeks ago only we disclosed the fact that…
21:16
[Burair Al Lawati]
…we won 33 percent of Oman Air volumes in this in Muscat International Airport which shows the positive trajectory in the business and the value we are bringing to our shareholders and customers.
21:28
[Burair Al Lawati]
And finally I'd like to talk about CSR.
21.33
[Burair Al Lawati]
The Company is actually in the process of updating CSR strategy and alignment with this vision and public strategy.
21.39
[Burair Al Lawati]
Taking into account consideration that are related to the pillars and directives of Oman Vision 2040 and the…
21:47
[Burair Al Lawati]
…local community requirements as well as the 2030 United Nations sustainable development goals (SDG).
21.54
[Burair Al Lawati]
The new CSR strategic themes would be Community Systems and Enterprise development, environment and energy transition, and people well-being.
22.02
[Burair Al Lawati]
As approved by AGM this year for 2023 we have earmarked 75000 Omani Riyals towards supporting social services.
22.11
[Burair Al Lawati]
And you can see in 2022 what we have spent our CSR Budget.
22.18
[Burair Al Lawati]
Alright so with this we end our actual presentation for in terms of what we have to present here, but we are ready to take questions…
22.30
[Burair Al Lawati]
...please feel free to post them in the chat box so if you want to raise the hand and we will unmute you to ask your questions
(SILENT ENSUES)
22:46
[Burair Al Lawati]
Okay… okay we have one question here it's…
22:49
[Burair Al Lawati]
…can you scroll up, yeah that's right okay, so let me read.
22:54
[Burair Al Lawati]
Shell Global has declared that they have reached Peak production to 2019 the world production reduced by one to two percent to 2030. They've also guided you know and then in addition to fill in filling stations… (inaudible)… more aggressive it is a valid observation so what would be your guidance thoughts on… on the way forward?
23.17
[Burair Al Lawati]
Okay, so I think this question just to, it's on the chatbox from… is it from Deepak?
23:27
[Burair Al Lawati]
From Deepak, Yes.
23.28
[Burair Al Lawati]
So, I would...what I would say is that while some of the… the notes that have been shared there is to do with the Upstream business.
23.36
[Burair Al Lawati]
So, obviously Shell Oman marketing company is a player in the downstream business and you know leave any question to do with upstream…
23:45
[Burair Al Lawati]
…to them and upstream to them. In Upstream you can reach out to Shell Development Oman. But what we have in downstream is that we…
23:53
[Burair Al Lawati]
…have a long-term investment plan to increase our expansion and network of service stations as you can see from our presentation…
24.00
[Burair Al Lawati]
…in 2022 we increased the number of service stations to 206. and these are in fact a very strategic locations
24:10
[Burair Al Lawati]
Batinah expressway and many other in fact even in one location in Muscat and others so…
24:15
[Burair Al Lawati]
that...that is a demonstration to our commitment to continue investing and expanding our Network what… what matters
24:23
[Burair Al Lawati]
is that we continue being profitable, feasible with I don't know the long-term shareholder value that we can create
21.31
[Burair Al Lawati]
and also with the kind of integrated model that also answers to future needs of Motors so it's not only fuels that we focus on there's what we
24:41
[Burair Al Lawati]
Call non-fuel retail, there's also the EV charging capabilities in network that we want to integrate in the sustainable mobility of the world…
24.51
[Burair Al Lawati]
…if we would like to talk about it so some of our…our commitment to Oman and to expanding and investing Oman
25.00
[Burair Al Lawati]
Has not gone anywhere lower than before in fact we are more committed to it than ever to this area.
25.09
[Burair Al Lawati]
So, let's take another question here, any other question please feel free to raise the hands…
25.17
[Burair Al Lawati]
Can we (inaudible)…
(INAUDIBLE)
25.31
[Burair Al Lawati]
Joice Mathew, Can you hear us?
25:38
[Burair Al Lawati]
Can you unmute yourself please?
(INAUDIBLE)
25:46
[Lamees Al Lawati]
Perhaps you can type the question in the chat box if there is there are audio issues
(INAUDIBLE)
26:03
[Joice Mathew]
Hello…hello, am I audible?
26.08
[Burair Al Lawati]
Can you hear us Joice?
26.10
[Joice Mathew]
Yes
26.11
[Burair Al Lawati]
Yes, go ahead.
26.13
[Joice Mathew]
Thank you very much for the presentation.
26:17
[Joice Mathew]
I have a few questions now primarily the first… first ones are related to your operational aspects.
26.25
[Joice Mathew]
could you share some details about what's your average throughput persuasion on the retail side,
26.31
[Joice Mathew]
The capacity of your blending Plant, your number of COCO CODO DODO split up of the sites these things…
26.40
[Joice Mathew]
…basically, an overview of the business that Shell is doing and what's the volume that we are delivering right now?
26.50
[Burair Al Lawati]
Oh the last one being what sorry?
26.53
[Joice Mathew]
The volume that we are delivering on different … different segments.
27:02
[Burair Al Lawati]
Okay, thanks Joice for the question but I think you may probably understand that while these questions are important in terms of volume to us…
27.13
[Burair Al Lawati]
…but these are actually very classified numbers because they would be putting our company in a… in a competitively disadvantage way.
27.23
[Burair Al Lawati]
However what I can say to you is that currently what we…we… we wouldn't build any stations
27.32
[Burair Al Lawati]
Without having a long-term plan and feasibility that meets our expectations.
27.37
[Burair Al Lawati]
There are things that are to do with volumes but also to do with what we call non-fuel retail so…
27:42
[Burair Al Lawati]
…including our the Select shop, the convenience retailing, Car Wash, lubricant sales and… and other incomes so… so…
27:51
[Burair Al Lawati]
…average throughput per site may not be indicative of you know how well the site is doing and that's why we wouldn't want to put it there out without context
28.01
[Burair Al Lawati]
the other thing is the COCO CODO DODO (sic.) model is not something that the two options that we have in our business being in shell company we have different ways of
28:09
[Burair Al Lawati]
operating and again uh… very internal and that's subject to a lot of confidential contracts with the landlords…
28.16
[Burair Al Lawati]
…but what we have been working lately what I'd like to give you is that late in the last year or so we have been looking at
28.25
[Burair Al Lawati]
integrating our business model more than ever so that means you know we look as I said earlier looking at one side integrated (ly)
28:33
[Burair Al Lawati]
In terms of the income in terms of source of income and linking it to the experience of the motorists…
28.41
[Burair Al Lawati]
….and through the apps through the offerings that we have rather than having separate operators…
28:46
[Burair Al Lawati]
…in each site and for in terms of overall volume and each business as I said earlier that you know there are…there are
28.56
[Burair Al Lawati]
agencies in the market that would charge millions to give that those but unfortunately we are also restricted by the regulators…
29.04
[Burair Al Lawati]
…and what we can provide so I would… I would refer you to ORPIC and National… also in a statistics Centre…
29:10
[Burair Al Lawati]
…that gives the overall volumes in each sector rather than a business for each company which I understand would be very difficult to share publicly.
29.20
[Lamees Al Lawati]
And I think Burair on what you have just answered regarding the split or the volume contribution by the line of business it's commercially sensitive
29:29
[Lamees Al Lawati]
information so you would notice that in a lot of our publications and a lot of our press conferences and all we don't
29:35
[Lamees Al Lawati]
actually go into the actual number per litre but then if it helps in our financial statements
29.42
[Lamees Al Lawati]
in node number 19 we provide a bit more of a narrative and a disclosure on the actual revenue split across the two big sectors that we have
29.51
[Lamees Al Lawati]
and you know you could… you could refer to that if it helps so out of the 499 million revenue that we have reported we have declared at 441 million…
30:00
[Lamees Al Lawati]
…out of that was related to the mobility segment and you know if it helps build some sort of a context that on the numbers I think
30:06
[Lamees Al Lawati]
there was a question about the lubricants blending plant capacity as well
30.10
[Burair Al Lawati]
Yes, a capacity of throughput in both cases I think we wouldn't be able to share the volumes as well. I think that's also sensitive, right?
30:21
[Lamees Al Lawati]
We might not necessarily quote actual numbers in here but just to provide a bit of context on where do we supply the lubricants,
30.29
[Lamees Al Lawati]
so majority of our lubricant supplies are actually blended and lubricants blending plants – the only one that we have in the country…
30.35
[Lamees Al Lawati]
…and the one that is next doors here Mina Fahal the… the supplies and the production of that lubricants blending plant is…
30:43
[Lamees Al Lawati]
…serving the local market at 40 percent split and 60 percent of that goes to the export market so it covers the regional demand in neighbouring countries as well.
30.53
[Burair Al Lawati]
And just for your information also so in addition to retaining number one brand positioning as a lubricant supplier or producing company
31:03
[Burair Al Lawati]
We also believe that we have the market leadership in terms of lubricants so that helps.
31.10
[Burair Al Lawati]
I hope that answers your questions.
31:13
[Burair Al Lawati]
Anyone else or Joice do you have any other questions or anyone else would like to ask any other questions, please feel free?
31:19
[Joice Mathew]
Yes I have a follow-up question, you just said see one… one comment that I have…
31:25
[Joice Mathew]
…is it's only in the last three to five years that shell has… has not been disclosing these numbers if you refer
31:32
[Joice Mathew]
your earlier financial statements and your annual reports or even your quarterly statements
31.38
[Joice Mathew]
all these numbers were given very clearly and in a detailed manner
31.42
[Burair Al Lawati]
Yeah.
31.43
[Joice Mathew]
…so… so now I don't know how when… when this has been started you know
this has been classified…
31.50
[Joice Mathew]
…and all these things because as you as you've mentioned the NC size statistics give
the total numbers…
31.57
[Joice Mathew]
…but there are only three players and it's a very open market it's only it's not open to The Outsiders but it's open internally for all the players,
32.08
[Joice Mathew]
So my… my take on that is you know it's not so much classified an information but it's up to you know to decide whether to give it or not…
32:20
[Joice Mathew]
…and if you're being an, Shell being a you have a parentage of Shell Global Royal Dutch Shell and that company gives a lot of information to…
32:31
[Joice Mathew]
…the public shareholders and I would appreciate if you can follow the same you know the same culture in… in terms of addressing the shareholder request.
32.44
[Joice Mathew]
So that’s…that’s just a comment and my follow up question is now you have said that there is no COCO or DODO.
32:52
[Joice Mathew]
So am I to understand that DOCO is the only model that you're following?
32.58
[Burair Al Lawati]
Well, see what I would say is that first of all thanks for your feedback and we'll take it into account and see how that goes.
33.04
[Burair Al Lawati]
But I would like to correct one thing is that the Royal Dutch Shell is no longer there it's called the… in fact, it’s referred to as… Group Shell…
33.12
[Burair Al Lawati]
…because it moved its headquarter to the UK for… for over a year now but anyways, in terms of the business model…
33.24
[Burair Al Lawati]
…we are as I said in the last year or a little bit more started to look at revising some of our contracts with… with a number of landlords…
33.33
[Burair Al Lawati]
…and operators to make it more integrated now whether that is called COCO or CODO or otherwise and
33:40
[Burair Al Lawati]
probably we are looking at new ways of doing business models especially with the new realities in the market
33:45
[Burair Al Lawati]
whether it's things to do with real estate or to do with the new… new business income or revenue streams
33:53
[Burair Al Lawati]
From non-fuel retail or to do with even EV going forward and any others so I …I
33:58
[Burair Al Lawati]
think calling it COCO or CODO now externally would be undermining the actual reality so I will, what we… what we do is that we like to take this note
34:10
[Burair Al Lawati]
and maybe in the next session share with you what is it that we are talking about a little bit more
34:16
[Burair Al Lawati]
as you as we just as I said started embarking that journey and the integrated way of doing business but uh let me (inaudible)
34.27
[Burair Al Lawati]
excellent thank you Joice but thanks for your feedback and as I said we'll look into it yeah.
34.32
[Joice Mathew]
yeah ,sure can I…can I ask a few more questions
34.35
[Burair Al Lawati]
Sure… sure, shoot it…
34.36
[Joice Mathew]
Yeah …yeah fine thank you uh so Lamees just mentioned about this segmental breakup
34.44
[Joice Mathew]
is that the only thing that you can provide or will you be able to provide us the revenue breakup for retail, commercial, lubricant, marine business and NFRs.
34:54
[Lamees Al Lawati]
So if you if you are referring to the node that I just mentioned – node number 19 of the financials…
35.01
[Lamees Al Lawati]
… you would see those that a majority of the revenue breakdown is you know already provided as a split so we've provided Aviation and Mobility
35.09
[Lamees Al Lawati]
which together I think make more than 90 or 95 percent of the revenue breakdown
the other businesses that you have mentioned
35.16
[Lamees Al Lawati]
are much smaller relatively and you know if you would observe the …the reporting that we have followed it's consistent with the industry reporting
35.23
[Lamees Al Lawati]
and it's aligned with the competition as well you've also mentioned that Shell Group probably provides much more disclosure.
35.29
[Lamees Al Lawati]
Now shell adopts different approaches in the different markets than they operate in
35.33
[Lamees Al Lawati]
So we observe and we see what other markets are doing but we make or
35:37
[Lamees Al Lawati]
we adopt what makes sense here for us locally in a way that doesn't jeopardize our competitive position.
35:44
[Joice Mathew]
Yeah I understand… I understand so you have a classification called others…other Revenue 35 million so what …what are those items including
35.53
[Joice Mathew]
Is it only NFRs or is it something else or
35:57
[Joice Mathew]
Does it include the marine or commercial business or lubricant business?
36.01
[Lamees Al Lawati]
So NFRs as a revenue stream is classified as other income, it's not reported as Revenue as a headline number.
36.09
[Lamees Al Lawati]
The others that you see as part of the classification largely relates to the businesses that you have mentioned.
36.14
[Lamees Al Lawati]
So, it's marine, fuel Marine lubricants, the lubricant segment itself as well as any other smaller businesses that we might be having.
36:22
[Joice Mathew]
Okay… okay thank you and would you be able to give us some you know indication on what the margins that you
36:28
[Joice Mathew]
are getting on the retail side for let's say the… the normal fuel, the super the V-Power and Diesel?
36.37
[Joice Mathew]
If I understand, earlier I had some retail margins like 17… 17 Baizas for the M91 and for Super the same and then for diesel around 13 Baizas per liter
36.50
[Joice Mathew]
So are they the same or is there are there any changes in… in the margins?
36.57
[Lamees Al Lawati]
There hasn't been any change in the margins and the margins, you know Joice, are regulated by the government
37.03
[Lamees Al Lawati]
they are set by the authorities, they're not determined by the company.
37:07
[Lamees Al Lawati]
For majority of the fuel grades that we supply except for the differentiated fuel that we have Shell V-Power
37:13
[Lamees Al Lawati]
Which is set by company, but a majority of the… of the grades that you have mentioned follow the government guidelines in that regard
37:19
[Lamees Al Lawati]
and they have been the same like you know we have followed or the approach or
the structure that has been mandated by the government.
37.30
[Joice Mathew]
is there any… any plans for of Shell
(PHONE RINGS)
37.34
[Joice Mathew]
or the oil marketing companies of for the oil marketing companies all from the… the refineries the
37:42
[Joice Mathew]
Authorities, that there could… be there could be any changes in the fuel margins in the future
37:48
[Joice Mathew]
is that something that you have ever thought about?
37.53
[Burair Al Lawati]
Actually I think even last meeting we had, there was a question of such and as we said you know
38.00
[Burair Al Lawati]
since we don't really control the margins really, we operate according to the regulations and the laws in the country
38.07
[Burair Al Lawati]
And… but we make sure that we do share our views on this topic and others
38.15
[Burair Al Lawati]
transparently and openly through the right channels about our belief and how we would like to see in terms of
38:23
[Burair Al Lawati]
advocacy and policy making to grow together this sector and this business, not just for our shareholders benefit
38.34
[Burair Al Lawati]
but also for the overall society in the country so the so our channel… channels of communications will be relevant
38:42
[Burair Al Lawati]
stakeholders are always open and very transparent… transparent in the most ethical way.
38:48
[Burair Al Lawati]
Yeah, but I wouldn't go into particulars about what… what really believe should the margins be on what
38:55
[Burair Al Lawati]
should there should be higher or lesser the answer is really left to be regulators to decide and we…we just you know operate as per the law.
39.04
[Joice Mathew]
Okay thank you and coming to… coming to…coming to your margins I've seen that now this year 2022 has been the lowest
39:12
[Joice Mathew]
in terms of EBITDA margins which you have reported and we haven't I agree that you know we haven't come out of
39:19
[Joice Mathew]
this COVID issues but even during the COVID days we had higher margins and
even pre-covid we had better margins
39.27
[Joice Mathew]
but this 2022 despite the revenue you know reaching very close to the pre-covid levels almost 90 percent we have recovered,
39.37
[Joice Mathew]
still the margins, the EBITDA margins are still at 3.5 per cent what are the reasons for this erosion in margins that you have that we
39:47
[Joice Mathew]
are seeing and what's our margin outlook as a management what are your actions that you have taken
39.54
[Joice Mathew]
to protect the margins for the shareholders
39.57
[Burair Al Lawati]
Okay… okay Joice, as much as I enjoy the interview here okay but this will be the last question if you don't mind, I'm going to let the CFO for answer this and then…
40:06
[Burair Al Lawati]
… give answer please yeah so Lamees please feel free to answer.
40:10
[Lamees Al Lawati]
Yes, absolutely.
40.12
[Lamees Al Lawati]
So the question around margins Joice and you probably have passionately been following our financial results
40:18
[Lamees Al Lawati]
And you've actually quoted numbers and Trends which is great and fantastic
40.21
[Lamees Al Lawati]
but then if although we are referring to 2022 as a year of you know after COVID, we are still absorbing some of the
40:30
[Lamees Al Lawati]
aftermath related to the pandemic and you know for us to be able to gain our position again we had to take certain
40:37
[Lamees Al Lawati]
calls to revise the…the margin across all in certain segments for us to be able to you know capture our position
40:43
[Lamees Al Lawati]
again to grow our Network share the volume share. In addition to that you might have also closely
40:49
[Lamees Al Lawati]
monitored the volatility that we have seen at the base oil prices so it's not only a fuel marketing company,
40.56
[Lamees Al Lawati]
a big segment that we operate with is actually or operate and is lubricants as well. Now the lubricant supply chain has absorbed a big hit
41:03
[Lamees Al Lawati]
especially towards the beginning of the year when the base oil prices were reporting a continuous increase
41:09
[Lamees Al Lawati]
Now that volatility has impacted us proportionately and you know that impact has been absorbed within the
41:14
[Lamees Al Lawati]
Gross Margin numbers that you have seen. Now as the year progressed and as the base oil prices stabilize to a certain extent,
41:21
[Lamees Al Lawati]
we were able to improve our gross margin outlook as they get progressed but
41:25
[Lamees Al Lawati]
that hit from the first quarter was… was something that we have accounted for.
41.30
[Lamees Al Lawati]
Now in the aviation segment you would also understand that you know… for a segment like that that is based or the
41:38
[Lamees Al Lawati]
the hydrocarbon off is actually monitoring and reflecting and absorbing the international movement in prices
41:46
[Lamees Al Lawati]
In certain parts of the year we have also reported negative price exposure related to the stock that we were holding in hand at that point in time
41.55
[Lamees Al Lawati]
It wasn't… it wasn't significant or material in terms of value but important to share for… for completeness, yeah.
42:04
[Burair Al Lawati]
Thank you, Lamees.
42.05
[Burair Al Lawati]
If I can go to and, thanks Joice again for your really interesting questions.
42.11
[Burair Al Lawati]
It will help us prepare later so thanks for that.
(INAUDIBLE)
42:15
[Joice Mathew]
I will …I will take… I'll take you know exit the queue and go back side so no so that
others will also will be asking then I'll come back, Thank you.
42.24
[Burair Al Lawati]
Thank you Joice.
42.25
[Burair Al Lawati]
So, we have questions from Shaheen here in the chat box.
42.28
[Burair Al Lawati]
Oman has target… targeted 79 percent EVs on the road by 2035, how's your retail expansion strategy changed, with this objective could you expand?
42.39
[Burair Al Lawati]
Okay so in terms of EV charging actually as you may know the Group Shell has already embarked on a very ambitious
42:46
[Burair Al Lawati]
Strategy expanding the number of EV charging points across the world.
42:52
[Burair Al Lawati]
There are targets by 2030… there are targets by 2025… and targets by 2030.
42:59
[Burair Al Lawati]
In…in terms of numbers of millions – yeah – here globally speaking however locally we have already started that journey as you
43:06
[Burair Al Lawati]
may have already done some research to see that we've already put a number of charging points so far in… in a few stations.
43:15
[Burair Al Lawati]
This year also we have a plan to expand that number but the difference is that we are doing it in a very strategic way rather than
43:26
[Burair Al Lawati]
just you know… you know just putting it there for the sake of EV we are… we
are studying the markets
43.33
[Burair Al Lawati]
We are talking to customers, we are talking to OEMs, talking to Partners in the government and non-government sectors as well
43:42
[Burair Al Lawati]
To see how we can build and support the infrastructure of EV in Oman and also how can we integrate that into our retail business
43:51
[Burair Al Lawati]
To be able to create value for the consumer as well as for the shareholder we also are looking at the best
43:59
[Burair Al Lawati]
practices in the group and Shell to see what are the things that are working in other markets whether it's in Europe…
44:06
[Burair Al Lawati]
…or Asia in America and other markets to see how can we make it most cost-effective model for this business
44.16
[Burair Al Lawati]
and also to see how we can still create In-Country Value and support for our partners in Oman… maybe if you're working
44:24
[Burair Al Lawati]
with Omani SMEs or by bringing some of the technologies locally but we are exploring all these options
44.33
[Burair Al Lawati]
and… and one of the reasons what you may see actually why I'm currently as… talking to you as GM of Strategy and Energy Transition
44.45
[Burair Al Lawati]
while last time I was your GM of Public Relations and Business Development
44.49
[Burair Al Lawati]
So there will change in the structure of the company as well to you know to proactively
44.58
[Burair Al Lawati]
address these changes yes, so EV is one of them but even other energy transition related topics as well.
45.06
[Burair Al Lawati]
Okay, any other questions?
45.10
[Burair Al Lawati]
Okay so, Shaheen also… are you looking at the costs of capital increases this is likely to affect your dividend payout
45:16
[Burair Al Lawati]
strategy or fuel station expansion going forward also are you considering expansion in the region?
45.25
[Burair Al Lawati]
Lamees?
45.26
[Lamees Al Lawati]
Yeah and thank you for the question Shaheen and obviously we see dividend distribution as an important
45: 32
[Lamees Al Lawati]
value proposition for our investors, as we have demonstrated throughout the you know the dividend distribution history we had
45.42
[Lamees Al Lawati]
Now we cannot provide an accurate assumption on the direction of the company because the dividend the decision
45.46
[Lamees Al Lawati]
is based on a number of factors including the profitability of the company and the current financial year the cash requirements for operation and purposes
45.54
[Lamees Al Lawati]
as well as the long-term growth of strategy that we have as a company we… we tend to look at all of these
46:02
[Lamees Al Lawati]
different components together to arrive at Define and Dividend Decision for the year which will obviously go to the
46:08
[Lamees Al Lawati]
boards for approval and then the… the shareholders through the AGM. So it's too soon to make any conclusions depending
46:15
[Lamees Al Lawati]
on how this financial year would be ended, how do we really prioritize our investments and we also observe what
46:21
[Lamees Al Lawati]
sort of regulations and how the market moves around competitively as well for us to arrive with the final dividend decisions
46.28
[Lamees Al Lawati]
or we find an investment decisions that we would like to adopt in any particular year.
46.33
[Lamees Al Lawati]
so just to answer the questions I think it's too soon to make any conclusions out of that but you know
46:38
[Lamees Al Lawati]
they go hand in hand any Dividend Decision that we'll make will take into considerations all the factors that I've mentioned
40.43
[Lamees Al Lawati]
including the capital...Capital Department as well.
46.47
[Burair Al Lawati]
Ok, Thank you Lamees,
46.48
[Lamees Al Lawati]
I think there was a second part of the question, whether we are considering expansion in the region?
46.53
[Burair Al Lawati]
Okay so actually you know, Shell Oman Marketing Company is licensed to operate in Oman but that doesn't mean
46.59
[Burair Al Lawati]
that we don't really have business in the region through our exports of products and services so in that sense
47.08
[Burair Al Lawati]
if you're talking about the retail business of Mobility itself we're not really licensed to be playing in the region at the moment
47.18
[Burair Al Lawati]
nor that we are exploring that but we have already for many, many years been exporting our lubricants from our blending plant in Mina Al Fahal
47.28
[Burair Al Lawati]
to many Regional markets, 16 different countries…
47.32
[Burair Al Lawati]
…including markets in the GCC and others and we are always exploring ways to increase the and grow that segments
47.40
[Burair Al Lawati]
and our that will be revenue stream.
47.43
[Burair Al Lawati]
Okay any other ones?
47:49
[Joice Mathew]
Can I come again?
47.51
[Burair Al Lawati]
Joyce, yeah sure.
47.52
[Joice Mathew]
Yeah… yeah okay thank you and you know as a follow-up to your answer for the decline in margin…
47.58
[Joice Mathew]
See we are contributing only the… the things that you have mentioned the lubricants and the NFRs and Aviation.
48.08
[Joice Mathew]
These are contributing a total of only 11 percent of the total sales. So you know are we seeing
48.13
[Joice Mathew]
that there's a significant erosion in margin
48:17
[Joice Mathew]
because you know as your gross contributions in the retail segment
48:23
[Joice Mathew]
the fuel segment is almost stable
48.26
[Joice Mathew]
so does that mean that 2022 so significant volatility in… in… in the aviation prices and…and also on the lubricant side?
48.39
[Lamees Al Lawati]
Yeah thank you for the follow-up question Joice.
48.42
[Lamees Al Lawati]
It might not necessarily be proportionate and I've also mentioned in my… in my response earlier
48.49
[Lamees Al Lawati]
that we have taken conscious calls as well to revise the margins in certain segments now when we say Mobility
48.54
[Lamees Al Lawati]
it's not necessarily only the B2C segment that we have which is the filling station.
48.58
[Lamees Al Lawati]
similarity is much broader in the definition of shell to include the fleet card business for example the home-based business
49.04
[Lamees Al Lawati]
was part of the mobility segment as well in the year 2022 before it got reclassified this year as part of our low-carbon products and segments.
49.14
[Lamees Al Lawati]
So in these other business areas it was a conscious goal that the company
49.19
[Lamees Al Lawati]
has decided to you know it's a trade-off between actual volume, market share, market position as well
49.24
[Lamees Al Lawati]
as the margin that you'd like to retain within the organization. So, I think it's the combination of factors
49:29
[Lamees Al Lawati]
Including the ones I have mentioned in lubricants so although lubricants might not be so big in terms
49.34
[Lamees Al Lawati]
of the actual contribution to the revenue number but profitability wise the… the business is you know a big contributor as well.
49.44
[Joice Mathew]
Okay…okay all right thanks and I have another question on your market share
49.50
[Joice Mathew]
your market share is continuously dropping. Earlier Shell used to be very aggressive in the market
49.55
[Joice Mathew]
and you know your market share was growing but recently we are seeing here market share is coming down
50.02
[Joice Mathew]
even though your (inaudible) increasing but and the total number of stations are increasing
50.07
[Joice Mathew]
but essentially we are seeing the market share dropping and that's… that's not a very favourable situation that we would anticipate as shareholders.
50:18
[Joice Mathew]
so what's… what's your call on the market share but will you be looking at the market share retention or will you
50:25
[Joice Mathew]
be looking at them at you know growing at this at the current pace and maintaining the current margins?
50.33
[Burair Al Lawati]
Okay so Joice, in terms of market share…
50:36
[Burair Al Lawati]
…obviously, a sector by sector to be a different kind of situation and really there are sometimes strategic
50.44
[Burair Al Lawati]
kind of approach to whether to go for the volume or whether to go for the bigger margins, right?
50.49
[Burair Al Lawati]
So depending on the business that we talk about and you know – and accordingly historically as we said historically,
50.55
[Burair Al Lawati]
until the COVID years… although I don't want to go into details of that but you would say how as you said
51.01
[Burair Al Lawati]
we…we the market leadership was always on the side of Shell. Now when business realities change
51.08
[Burair Al Lawati]
and when you go through business transformation as we mentioned a lot new Investments
51.13
[Burair Al Lawati]
new digital… digitalization while also taking into account that in order to with our business continuity throughout
51.21
[Burair Al Lawati]
the last two and a half years or three years with the pandemic, there were kind of reprioritization of what to go for
51.32
[Burair Al Lawati]
and what you're saying is that us taken a little bit I would say kind of a small… a small pause to… to re-strategize and go for the bigger picture
51.45
[Burair Al Lawati]
which is not about only tomorrow no we talk about a very long term
51:49
[Burair Al Lawati]
commitment to this to the shareholders, to the country, to the society so you see us now talking like
51:55
[Burair Al Lawati]
you can see our… our language has also changed while you know in the in
52:00
[Burair Al Lawati]
generally speaking in the market it would be focused on you know bottom line, we talk about
52:08
[Burair Al Lawati]
our energy transition explanations, net-zero carbon emissions, supporting decarbonization
52.15
[Burair Al Lawati]
and we see the value in investing in these long-term approaches
52:18
[Burair Al Lawati]
one also we don't mean like we are ignoring the actual bread and butter of the business. We still put our focus in
52:24
[Burair Al Lawati]
it and make sure that we maximize value for the shareholder but… but the last two or three years picture is not
52:31
[Burair Al Lawati]
necessarily the result of the of a normal way of doing business it's more
52:37
[Burair Al Lawati]
of the kind of long-term strategic… long-term decisions that we had to make
52:44
[Burair Al Lawati]
which even Lamees mentioned earlier and certain decisions we had to make to protect the company and the shareholder value
52:52
[Burair Al Lawati]
our employees, their also values and and go for a bigger Sprint… it's a marathon at the end of the day
52.59
[Burair Al Lawati]
and…and again the example, the restructuring that we're making it so transparent to you as investors community
53.07
[Burair Al Lawati]
and to our shareholders. This is one example of what we are planning for the future of this company.
53.13
[Burair Al Lawati]
You know we have been in this country for more than 65 years, right, so as Shell Oman Market… (sic.) as a downstream business.
53.19
[Burair Al Lawati]
We have been a publicly listed company from 1997. Our long-term high dividends payouts, our PE ratio, and our indicators
53:30
[Burair Al Lawati]
historically speaking are actually what makes us even more motivated and excited to… to push and create this value
53.42
[Burair Al Lawati]
that you know are sort of seeking as a shareholder.
53:45
[Burair Al Lawati]
Yeah, that's what I can say about your question for now.
53.50
[Joice Mathew]
Yeah, thank you.
53.51
[Joice Mathew]
Now that is that… that is primarily for from a modelling perspective to know what's your… you know… Capex plans and everything because of
53:59
[Joice Mathew]
the last two years we have you know very stable Capex so just wanted to
54:04
[Joice Mathew]
check you know whether your Capex will change significantly over the future
54:09
[Joice Mathew]
or should we be looking at you know on an average around six million …six million Riyals as Capex?
54:18
[Burair Al Lawati]
Uhh… Do we disclose of the Capex of the business in the last 3 years?
54.23
[Lamees Al Lawati]
We do some part of our financial statements but I think the question is more on the long-term expansion…
54:30
[Lamees Al Lawati]
We don't really disclose publicly right so I think Burair has covered it in the narrative mentioning that we continue to
54:37
[Lamees Al Lawati]
be committed to growth, to you know being the pioneer in…
54:42
[Lamees Al Lawati]
…introducing any or capitalizing on any new opportunity in the market but at this stage
54.49
[Lamees Al Lawati]
we don't really share any absolute numbers in terms of where they really want to invest and how much the quantity of that investment will be.
54.57
[Joice Mathew]
See that that again leads to… you know… another answer of your question to Shaheen about the dividends so you know?
55:04
[Joice Mathew]
We …we've been seeing that there is earlier Shell had a high payout ratios
55:10
[Joice Mathew]
and in the meantime it was reduced and now you are now reaching back to 100 percent payout so now just wanted to gauge
55:16
[Joice Mathew]
how much of the dividends and everything you know will come from the company see, the only thing is if the management gets
55:23
[Joice Mathew]
opened then only it will help us investors to gauge the potential of the company and gauge the real potential of the company.
55.30
[Joice Mathew]
Otherwise you know there will be a lot of mispricing and you know a lot of asymmetry about in the market.
55.37
[Joice Mathew]
Our Market itself is you know very inefficient in terms of trading liquidity especially for Shell… or companies like Shell…
55.44
[Joice Mathew]
So you know what we are trying to do is to gauge the real… real potential of the company
55:50
[Joice Mathew]
and then communicate to the investors. If the management doesn't do that then you know we also are helpless people
55.58
[Joice Mathew]
so that's the reason why we are asking all these kind of questions – and you know usually managements are open and giving
56:06
[Joice Mathew]
they open their plans, their strategy and everything but this is I'm very disappointed… know that you…
56:13
[Joice Mathew]
know there is… there is no real takeaway for me in this call. I'm very sorry to say this, I can’t help… I can’t help not saying this…
(Inaudible)
56:29
[Joice Mathew]
What…What will be the dividend payout that you will be looking at in the future you know. This question is
56:38
[Joice Mathew]
primarily because you have now reached back to 100 per cent payout so this should this be a norm going forward or will there
56:46
[Joice Mathew]
be any further, should we be looking at a lower dividend payout?
56:52
[Burair Al Lawati]
Okay Joyce you know I'm… I'm also disappointed that we feel that way that we haven't answered any you know your concerns…
57.01
[Burair Al Lawati]
But let me just comment on the dividends which I think earlier also it was commented on. Year-on-Year we
57:09
[Burair Al Lawati]
probably will analyze what is the dividends that will be paid – but it's not even us who will make that decision.
57:15
[Burair Al Lawati]
It’s the shareholders through the board members. And as you can see depending on the situation every year
57:23
[Burair Al Lawati]
that decision will be taken by the board – and of course we give our input, we share your kind of feedback
57.31
[Burair Al Lawati]
also with our with our board members and… and the leadership team but it really depends on multiple factors
57.41
[Burair Al Lawati]
I mean if you look at as you said historically if you look at the payouts that gives you an indication
57:46
[Burair Al Lawati]
what kind of company we have been but even in the long term it depends on whether we have a much aggressive Capex plan,
57.54
[Burair Al Lawati]
what is the borrowing cost, what is the market conditions and many other things that before we can commit to a number
58.02
[Burair Al Lawati]
you know. What I can say that we'll be looking at maximizing the value that we can give to the shareholders.
58.09
[Burair Al Lawati]
As it's been the case for Shell Oman… you know… as a company in the public listed in MSX before now for ...for over 25 years.
58.22
[Burair Al Lawati]
But other than that we… do you think you know as a management team member, we can
58.28
[Burair Al Lawati]
override the board member’s decision-making authority on this (?) That's something probably I cannot give you more than this for now.
58:39
[Burair Al Lawati]
But …but not mistaken, let me see what we can I can get back to you also you had other questions in the past so let me see what
58:45
[Burair Al Lawati]
I can do for you for other than this one. I'll reach out to you separately.
58.50
[Burair Al Lawati]
We have already reached the end of the call in terms of the timing, unfortunately, but I would like to again thank everyone
59.00
[Burair Al Lawati]
for the attending this session and for the questions that was raised
59:05
[Burair Al Lawati]
making it very interactive and interesting for us. And at the end of this call I'd like to thank… I thank Sultan, Lamees and we have here Ahmed
59:15
[Burair Al Lawati]
who's been also a soldier in this behind the scenes and of course everyone who attended this call
59.22
[Burair Al Lawati]
for sharing your time valuable time with us. Looking forward to the next session
59.28
[Burair Al Lawati]
Insha’Allah and until then keep safe and take care.
(Thankyou)
59:36
[Joice Mathew]
Thank you very much
59:44
[Music]
جلسة مناقشة علاقات المستثمرين للربع الثالث من 2022
TITLE: Shell Oman Marketing SAOG Q3 Investor Relations - MSX Engagement Session
Duration: 44.02 minutes
0:00 – Video Starts with Welcome Screen. Audio Begins at 0:46
0:46
[Burair Al Lawati]
Good morning, Asalamualaikum. Thank you for attending.
0:53 – 0.57
[Burair Al Lawati]
We’ll take one more minute just to wait for people to attend and then we will be shortly with you.
[Silence Ensues]
1:55 – 2:02
[Burair Al Lawati]
Just give people maybe one more minute and then we will get started.
[Silence Ensues]
2:26
[Burair Al Lawati]
All right, so I guess we can start now.
2:33
[Burair Al Lawati]
Let me just test my voice to make sure that you can hear us. If I can get a reaction
2:39
[Burair Al Lawati]
in the chat box or from the tools on the top.
2:45
[Burair Al Lawati]
Am I clear?
2:49
[Sameer Kattiparambil]
Yes, we can hear you.
2:50
[Burair Al Lawati]
Thank you very much. Okay…
2:51
[Burair Al Lawati]
Bismillah Ya Rahman Ya Rahim. Asalamualaikum everyone, This is… I am Burair Al Lawati – I am the General Manager of Corporate Relations and Business Development in
3:02
[Burair Al Lawati]
Shell Oman Marketing Company. Welcome to the Muscat Exchange (sic.)
3:09
[Burair Al Lawati]
engagement session that we have prepared for Q3 of 2022.
3:16
[Burair Al Lawati]
I would like to first introduce the panel. I have here Lamees… Lamees, could you
3:24
[Burair Al Lawati]
introduce yourself please?
3.25
[Lamees Al Lawati]
Hi, Asalamualaikum everyone, good morning and it's great to host you today, although virtually
3:29
[Lamees Al Lawati]
My name is Lamees Al Lawati, I am the Chief Financial Officer of Shell Oman Marketing Company.
3:35
[Lamees Al Lawati]
I’ve been in this role since April this year.
3.37
[Lamees Al Lawati]
But prior to that I've spent my entire career with Shell, so over 15 years through various roles.
3:43
[Lamees Al Lawati]
My background includes Management Information, Treasury, Corporate Controllership, Internal Audit Management
3:48
[Lamees Al Lawati]
and prior to taking over this role, I spent the last three-years-and-a-half in the Upstream office of shell as the Finance Manager of another joint venture
3:55
[Burair Al Lawati]
Yeah, and myself as I said, I’m Burair Al Lawati, I handle Corporate Communications and Business Development.
4:01
[Burair Al Lawati]
So IRO is also part of my role in this organization
4:07
[Burair Al Lawati]
In addition to CSR, media relations, internal-external Communications. So, I'm also the authorized spokesperson for Shell in Oman.
4:15
[Burair Al Lawati]
Again, welcome to this session, and as you have seen in the disclosed invitation to this session that was published on the 31st of October
4:27
[Burair Al Lawati]
we have invited the investors and the financial analysts to be participate in this virtual session
4:33
[Burair Al Lawati]
in the compliance with the [EE109 2022] resolution by CMA. So welcome to you all again.
4:41
[Burair Al Lawati]
If we… I would like to, as you can see in the agenda, we have… We're [gonna] be going
4:49
[Burair Al Lawati]
first through some HSE and ground rules and then we'll go to cover the Q3 Key financials and business highlights
4:57
[Burair Al Lawati]
After that we'll talk about our Company's future strategy and plans
5:01
[Burair Al Lawati]
Before we can go for our Q and A.
5:07:
[Burair Al Lawati]
Please note that if you go to the HSSE section
5:09
[Burair Al Lawati]
as you can… you know about Shell HSSE is very important.
5:18
[Burair Al Lawati]
So, we have our… go to the other… We have our colleague
5:22
[Burair Al Lawati]
Khalid Al Awaisi who's just joined us. He's our General manager of Mobility
5:28
[Burair Al Lawati]
Dr. Khalid please feel free to introduce yourself.
5.30
[Khalid Al Awaisi]
Yeah… Definitely I don't know who's in the call but welcome, Asalamualaikum
5:38
[Khalid Al Awaisi]
Khalid Al Awaisi, the Mobility GM…
5:39:
[Khalid Al Awaisi]
Being with Shell Oman Marketing for the last 15 years. In the first of October completed 15
5:44
[Khalid Al Awaisi]
now serving 16 years.
5:47:
[Burair Al Lawati]
Mabrook, mabrook. Congratulations. Thank you Khalid for joining and we were
5:50
[Burair Al Lawati]
just going through our HSSE guidelines. So we please request you to
5:56
[Burair Al Lawati]
maintain your safety and security throughout the session. Please be aware about the exit routes
6:04
[Burair Al Lawati]
and the assembly points in where you are and in case of any alarm that you can be responding to such situations – go for this
6:11
[Burair Al Lawati]
But please in case of such a situation, feel free to exit the session and we can
6:18
[Burair Al Lawati]
always catch up. Also, in case of any liquids or hazardous stuff around you, just be
6:24
[Burair Al Lawati]
careful about them. In terms of the Q and A and the questions
6:29
[Burair Al Lawati]
we will be taking them at the end of the session. We have some time for it. But throughout the session if you feel like
6:35
[Burair Al Lawati]
you would like to post your questions in the chat box, feel free to do so, and we'll be sharing
6:41
[Burair Al Lawati]
these questions and addressing them at the end of this meeting. We welcome all questions and feedback
6:48
[Burair Al Lawati]
but we kindly request you to stick to the agenda and the content of this session.
6:54
[Burair Al Lawati]
In case there is a question that we don't know the answer to, we will
6:58
[Burair Al Lawati]
take note of them and then we'll get back to you soon by… you know… offline and make sure that you we do address
7:04
[Burair Al Lawati]
them the way we can. So let's move on now to our first agenda item which is our Q3 results. Lamees, please?
7:13
[Lamees Al Lawati]
Yeah, thank you Burair. So Burair has already kindly shared the agenda and we
7:17
[Lamees Al Lawati]
aim today to cover as much as we can in the… you know… time that we have allocated today to cover and share with you the
7:22
[Lamees Al Lawati]
financial performance of the company which is of vital importance. Together with that we also place equal emphasis
7:28
[Lamees Al Lawati]
and importance in the other dimensions and the other levers, including our people our HSSE as well as our business
7:34
[Lamees Al Lawati]
updates on an individual business [inaudible]. So in the time that we've allocated today we will try to cover as much as we
7:41
[Lamees Al Lawati]
can in the dimensions that I have mentioned together between or between myself and my colleagues here today and
7:48
[Lamees Al Lawati]
we will start with the financial performance. So the financial results are published in the Muscat Stock Exchange
7:54
[Lamees Al Lawati]
following the approval from our board of directors which endorse the results on a
7:59
[Lamees Al Lawati]
meeting that was held on the 31st of October 2022. The numbers as you have seen have
8:04
[Lamees Al Lawati]
reflected growth versus the same period last year. We saw volumes improving generally in the market. A bit of a
8:11
[Lamees Al Lawati]
slower start at the beginning of the year as the market was adjusting and was recovering post the pandemic but with
8:17
[Lamees Al Lawati]
the uplift of restrictions as the months were gradually progressing, the volumes picked up
8:23
[Lamees Al Lawati]
consistently, and you know, progressed as the as the year progressed. We have seen
8:28
[Lamees Al Lawati]
volumes picking up in the B2C segment as well as in other sectors like Aviation to a certain extent. We have seen healthy
8:35
[Lamees Al Lawati]
volume growth in certain… certain segments, and we recognize and we appreciate that some of that volume
8:40
[Lamees Al Lawati]
might have been seasonal, like the volume, or the height that we have seen, in the South Region during the Khareef season
8:46
[Lamees Al Lawati]
but majority of the volume growth that we have reported in the period is expected to be sustainable growth.
8:54
[Lamees Al Lawati]
Our volumes grew generally by 17% this year versus the same period last year for the
8:59
[Lamees Al Lawati]
first nine months of the year. We have reflected a top-line growth and reported revenue of 373 million Riyals.
9:06
[Lamees Al Lawati]
That was 30% higher than the same period last year. Our gross profit for the nine months was 27 million Riyals.
9:13
[Lamees Al Lawati]
It was 19% higher than the same period last year. Now, as the volumes grow
9:18
[Lamees Al Lawati]
we expect that the costs associated to servicing these volumes would go higher, so a big chunk of the cost growth that
9:24
[Lamees Al Lawati]
we have reported – so out of the 22 million is costs that is directly attributed to
9:30
[Lamees Al Lawati]
delivering these products to the end customers. So, things like logistics costs, transportation costs, as well as
9:37
[Lamees Al Lawati]
operational costs in certain business segments like aviation, like the mobility business…
9:42
[Lamees Al Lawati]
…and we've continued to invest in our people as well, so the Manpower cost element has been reflected there.
9:49
[Lamees Al Lawati]
On a quarter, on a standalone basis, you would say that the revenue growth and the gross profit growth is in line with the
9:54
[Lamees Al Lawati]
average that we have reported for the three quarters so 32% and 19%, respectively.
10:00
[Lamees Al Lawati]
The other item perhaps that attracts attention here is cost so although on a YTD basis we have reported a cost growth of 10%...
10:07
[Lamees Al Lawati]
…our costs spend for the third quarter on a standalone basis has been higher than the rest of the importers.
10:15
[Lamees Al Lawati]
We are still operating within the plan that was approved and budgeted for the year; in fact we have we have optimized on
10:22
[Lamees Al Lawati]
costs and we have reported under-spend versus the budget that we have allocated. But there are certain business activities that we have allocated or
10:30
[Lamees Al Lawati]
phased for Q3, so it was part of the business plan and a lot of it was on the operational and promotional campaigns
10:36
[Lamees Al Lawati]
that we had… we have… conducted in Q3. Now we also recognize that the
10:42
[Lamees Al Lawati]
industry trend is moving towards digitalization, so we've spent quite a good amount of OpEx to upgrade our
10:49
[Lamees Al Lawati]
systems, our infrastructures, our telecom infrastructure across the mobility network of 206 stations that we have, so…
10:56
[Lamees Al Lawati]
that's a big spend that has that has been reported as well in this year, so these are good investments and good
11:02
[Lamees Al Lawati]
calls that we continue to invest in to improve the overall experience of the customers. Now, during the year as well, we
11:08
[Lamees Al Lawati]
have approved the investment on a specific solution that we will
11:15
[Lamees Al Lawati]
be launching soon in the mobility segment. I don't know, Khalid, maybe later you would like to shed some light on it. But not to hijack the discussion on the
11:20
[Lamees Al Lawati]
financials but just to give a bit of a perspective on where we have been investing in the in the period…
11:27
[Lamees Al Lawati]
… for the nine months we have reported net income after tax of 4.96 million Riyals
11:33
[Lamees Al Lawati]
and it was 47% higher than the same period last year.
[Silence ensues]
11:39
[Lamees Al Lawati]
And if we can move to HSSE perhaps… yeah…
11:44
[Lamees Al Lawati]
Actually I’ll continue. So, on HSSE like we said, we placed equal
11:50
[Lamees Al Lawati]
emphasis on all the levers of our operational excellence including HSSE – so HSSE is an integral part of the way we
11:56
[Lamees Al Lawati]
run the business and the way we manage the business – and we have consistently kept the records and the KPIs and the
12:02
[Lamees Al Lawati]
HSSE space excellent during the third quarter of the year. We have reported zero lost time injury, so total record…
12:09
[Lamees Al Lawati]
…zero total recordable cases and zero loss of primary containment – so no leaks [were recorded]
12:14
[Lamees Al Lawati]
in the third quarter. Now during the quarter, we have invested in a lot of initiatives.
12:19
[Lamees Al Lawati]
Particularly in getting assurance on our ‘Readiness During Crisis’, we have conducted a number
12:27
[Lamees Al Lawati]
of drills across the different regions of the country and in different cities, including Dhofar, Muscat, Sur, as well as Nizwa,
12:35
[Lamees Al Lawati]
and these activities were done in collaboration with the wider network of stakeholders that we have, including our
12:42
[Lamees Al Lawati]
retailers as well as the authorities. Now, the main aim of this session is to focus on… or to give us assurance on our
12:48
[Lamees Al Lawati]
readiness in case of any emergencies, as well as share good practices, best practices in that space so the impact of
12:55
[Lamees Al Lawati]
that is not expected to be limited only to us as a company but to be shared and to be spread across the wider network
13:01
[Lamees Al Lawati]
During the period, we have also conducted various refresher sessions on health and well-being, worker welfare, and we have
13:08
[Lamees Al Lawati]
conducted a number of assurance activities – the line of defense sort of audit or assurance activities in the
13:14
[Lamees Al Lawati]
areas of road safety, process safety, environmental management, and other areas as well. Our LTI free record as you can
13:21
[Lamees Al Lawati]
see in front of you on the screen is no harm for 265 days and no leap for
13:27
[Lamees Al Lawati]
1826 days. We are very proud of the records and we keep continuing our efforts in
13:33
[Lamees Al Lawati]
that space to continue and improve and sustain the programmes.
13:38
[Lamees Al Lawati]
Just a bit on the people's side as well… if we can move to the other slide, I'll cover that too.
13:44
[Lamees Al Lawati]
So on the people space, Shell Oman Marketing, just a bit of an additive sharing in a few KPIs in that space
13:50
[Lamees Al Lawati]
before we talk about the number of initiatives that we are doing there as well. So the number of full-time employees that we
13:57
[Lamees Al Lawati]
have on our payroll as of today is 250 staff. Our Omanisation rate is 97.2%
14:04
[Lamees Al Lawati]
which is at the top of the sector and I think worth mentioning that expectation from the sector is 60%.
14:11
[Lamees Al Lawati]
So we have impressively exceeded that level and now this reflects our commitment to the in-country value.
14:19
[Lamees Al Lawati]
So adding in-country value as well as our responsibility as a good corporate citizen. The turnover rate for the
14:26
[Lamees Al Lawati]
first nine months of the year was 3.97, which is pretty much within the limit that is acceptable and it's healthy for
14:32
[Lamees Al Lawati]
an organization like us. I think the low turnover rate
14:38
[Lamees Al Lawati]
also indicates our position as an employer of choice in the market in this sector, as well
14:45
[Lamees Al Lawati]
as in the… generally in the… Omani market. During the period we have
14:51
[Lamees Al Lawati]
employed around… or we have hired… around 36 interns from various colleges and
14:56
[Lamees Al Lawati]
universities in Oman. Giving… so through this we were aiming to give the interns an opportunity to develop their
15:03
[Lamees Al Lawati]
skills and their competencies and improve their chances in the employment market post completing these programmes –
15:10
[Lamees Al Lawati]
– and it also gives us a chance as a company to participate in the national efforts to tackle employment
15:17
[Lamees Al Lawati]
challenges and also support the government's Vision in this regard. Obviously we continue our relentless
15:22
[Lamees Al Lawati]
efforts to attracting, developing, promoting our local talents and supporting initiatives that encourage
15:29
[Lamees Al Lawati]
youth to study in the areas like STEM – science, technology, engineering and Mathematics
15:35
[Lamees Al Lawati]
and we continue to enhance the cultural-political organization to promote diversity and
15:41
[Lamees Al Lawati]
inclusion, whether it's gender or the background of people, and by creating an environment where people be respected.
15:49
[Lamees Al Lawati]
We would also like to share that during the period, we have successfully participated in the Shell People Survey –
15:55
[Lamees Al Lawati]
– it's an annual tool or an annual survey that is launched across the entire Shell Group.
16:01
[Lamees Al Lawati]
So it's one of the tools that the Shell Group deploys to measure the… you know the engagement of employees
16:07
[Lamees Al Lawati]
the motivation, the affiliation, and commitment to the Shell Group – and this is the tool where… while we're here…
16:13
[Lamees Al Lawati]
…and we invite the views of our staff, it provides us insights into how…
16:18
[Lamees Al Lawati]
…what is the level of motivation in the company and what are the views… it's a two-way sort of a dialogue hearing
16:24
[Lamees Al Lawati]
back from the employees and then you know, whenever we identify, that there are areas of gaps we continue…
16:31
[Lamees Al Lawati]
…we immediately start working on action plans to bridge the gaps in whatever areas that were identified.
16:37
[Lamees Al Lawati]
We are pleased to announce that our participation rate was 100% in the Shell People Survey and by that we were the
16:43
[Lamees Al Lawati]
highest in the Shell Group and we have exceeded the Shell Group average of 87% response rate.
16:49
[Lamees Al Lawati]
The survey typically covers areas 14 dimensions that varies across different areas.
16:54
[Lamees Al Lawati]
But the three of them that we probably would like to highlight today is employee engagement with which was at 85%,
17:02
[Lamees Al Lawati]
organizational leadership at 83%, and team leadership was scored at 86% percent.
17:08
[Lamees Al Lawati]
Now, if we look at these percentages, we have been consistently higher than the entire Shell Group; the top quartile as well as the
17:15
[Lamees Al Lawati]
Shell Downstream entity as well. So excellent, I think…
17:21
[Lamees Al Lawati]
…excellent reflection from our people, this motivates the leadership to keep excelling and doing more to reinforce our great position in
17:27
[Lamees Al Lawati]
managing people.
17.28:
[Burair Al Lawati]
Great, thanks Lamees. Now we will move to the Business updates
17:33
[Burair Al Lawati]
In Q3 with Khalid Al Awaisi.
17.35
[Khalid Al Awaisi]
Thanks Burair. When it comes to the business update, I will start with Mobility…
17:39
[Khalid Al Awaisi]
…Mobility being the biggest business for sure among marketing. The business, which is driven through the
17:45
[Khalid Al Awaisi]
vision of to be the best Mobility retailer in Oman, delivering the best value
17:50
[Khalid Al Awaisi]
to our customers and shareholders. And also, this vision is supported with a
17:56
[Khalid Al Awaisi]
strategic intent to build on Market leadership in Mobility for both
18:02
[Khalid Al Awaisi]
fuel and NFR – and this intent or this Mission is being
18:08
[Khalid Al Awaisi]
delivered through five main pillars or growth pillars. First one it is
18:14
[Khalid Al Awaisi]
enabled through the [inaudible] expansions and building a [inaudible] and profitable
18:19
[Khalid Al Awaisi]
NFR business and capitalizing on differentiated fuels – and they're built by
18:26
[Khalid Al Awaisi]
continuous Improvement in operational excellence, and HSSE, as well a revamped digitalization programme.
18:33
[Khalid Al Awaisi]
We would like to let you know that the total units will come to the network expansion. Today, we are standing at
18:40
[Khalid Al Awaisi]
206 sites and you are aware that the company had, in the past, announced its
18:47
[Khalid Al Awaisi]
expansion plan and we have delivered this year six new sites or six NTIs,
18:54
[Khalid Al Awaisi]
including four [inaudible] express road… sorry
19:00
[Khalid Al Awaisi]
where we had announced earlier this year that we [are] going to build four integrated
19:06
[Khalid Al Awaisi]
Service stations in Al Batinah express road, the four sites phase one of the four sites
19:11
[Khalid Al Awaisi]
has been already completed, with the latest site was just opened in early November which is in an or one in
19:19
[Khalid Al Awaisi]
the Al Batinah express road. When it will come to the second pillar, which there should be V-Power…
19:26
[Khalid Al Awaisi]
…our best performance and efficient or efficiency fuel, we have been investing into improving awareness and building
19:33
[Khalid Al Awaisi]
the camp through building different campaigns and upselling promotion which
19:38
[Khalid Al Awaisi]
have received a remarkable response from the public and contributed to improve our margin and profitability from the
19:46
[Khalid Al Awaisi]
regulated… and compared to the… regulated fixed margin in the fuel retail market.
19:51
[Khalid Al Awaisi]
We have been also the first company to offer bank payment facilitations or
19:57
[Khalid Al Awaisi]
facilities across all our sites of the network, and we continue to explore
20:02
[Khalid Al Awaisi]
options and programmes to make our customer journey better by
20:08
[Khalid Al Awaisi]
offering seamless and contactless payment options that are not only convenient but also rewarding to the customer
20:15
[Khalid Al Awaisi]
NFR, which is our third growth pillar…
20:23
[Khalid Al Awaisi]
…our NFR strategy aims to eventually generate 50 of our margin from this
20:28
[Khalid Al Awaisi]
sector or this channel. We want to develop an integrated customer experience while invest… investing in
20:36
[Khalid Al Awaisi]
digitalization and major IT upgrades, so customer can have an integrated view and drive the data process from the system…
20:43
[Khalid Al Awaisi]
…the platform in a fit-for-purpose way. The company is investing in a major
20:49
[Khalid Al Awaisi]
digitalization and IT upgrade of its infrastructure and software in order to
20:54
[Khalid Al Awaisi]
enhance customer journey, engagement, and loyalty. More details to be shared openly
21:01
[Khalid Al Awaisi]
in quarter four.
21:08
[Khalid Al Awaisi]
We are also glad to share an update with you from the e-mobility and energy transition… we are the first company to introduce fast-charging of EV which was
21:16
[Khalid Al Awaisi]
commissioned early in February – 50 kilowatt – and we were looking Insha’Allah to even invest more for high
21:24
[Khalid Al Awaisi]
and ultra-fast charging chargers in the nearing futures.
21:30
[Khalid Al Awaisi]
From fleet solutions… fleet solutions grew with customer portfolio… with new details… signed… with new deals signed during the quarter, increasing its
21:41
[Khalid Al Awaisi]
contribution to the mobility business. The overall business-to-business or B2B Market has demonstrated improvements in
21:48
[Khalid Al Awaisi]
activity and positive economic indicators. The business continued to focus on adding more customers which is
21:56
[Khalid Al Awaisi]
worth value while addressing evolving customer needs through accelerating the
22:01
[Khalid Al Awaisi]
digitalization journey, providing enhanced fleet solution, and continuous improvements in operational excellence by
22:09
[Khalid Al Awaisi]
better transactional control and digital value propositions. We leveraged our Shell Fleet Management System and online platform.
22:16
[Khalid Al Awaisi]
On the commercial fuels business, it witnessed some growth in the volume over
22:23
[Khalid Al Awaisi]
the last quarter, leveraging on the new ones and mobilization of infrastructure projects. Nevertheless, the overall
22:30
[Khalid Al Awaisi]
business landscape remained challenging given relatively limited commercial and infrastructure projects came to in the market.
22:37
[Khalid Al Awaisi]
The company remains committed to support business continuity for its customers
22:43
[Khalid Al Awaisi]
through efficient cash flow management, operation excellence, and providing
22:49
[Khalid Al Awaisi]
effective Mobility solutions. On the lubes, considering the current
22:54
[Khalid Al Awaisi]
geopolitical global circumstances, where the supply of base oil and other raw
23:01
[Khalid Al Awaisi]
materials were heavily impacted, despite the disruptions, the business continued to
23:06
[Khalid Al Awaisi]
supply its customers as per agreed delivery lead time through effective Supply Chain management.
23:13
[Khalid Al Awaisi]
The business experienced an increased demand in both B2C sector and export,
23:19
[Khalid Al Awaisi]
compared to the same period last year. The construction sector remained
23:24
[Khalid Al Awaisi]
challenging due to delay in mobilizing business, existing projects and limited infrastructure projects.
23:31
[Khalid Al Awaisi]
In Q3, the business enhanced its product portfolio in the B2C segment,
23:37
[Khalid Al Awaisi]
Mainly in the premium [sector] by upgrading the specification of the current Helix
23:42
[Khalid Al Awaisi]
portfolio to make the current local standard. The business has also launched
23:48
[Khalid Al Awaisi]
a couple of Premium campaigns with Distributors and resellers aimed at
23:54
[Khalid Al Awaisi]
increasing premium footprint in the High Street, which resulted in a higher premium penetration.
24:00
[Khalid Al Awaisi]
The lube business also continued to focus on its newly introduced Shell Helix Ultra 0W carbon-neutral products.
24:09
[Khalid Al Awaisi]
This launch is part of the largest carbon-neutral programme in the lubricants industry reflecting our focus and
24:16
[Khalid Al Awaisi]
commitment towards playing a key role in the market energy transition. The commercial lubricant segment
24:22
[Khalid Al Awaisi]
maintained its market leadership and grew volume in the market by winning extra market share with existing customers.
24:29
[Khalid Al Awaisi]
It continued to remain focused on winning the new accounts in the
24:35
[Khalid Al Awaisi]
construction and independent workshops sectors. When it will come to social
24:40
[Khalid Al Awaisi]
responsibility during the Khareef season, Shell Oman collaborated with other companies in the
24:46
[Khalid Al Awaisi]
energy sectors and organized the road safety campaign in Salalah under the
24:52
[Khalid Al Awaisi]
auspices of Royal Oman Police. Several indoor and outdoor activities took place to promote
24:58
[Khalid Al Awaisi]
safety awareness among visitors of Salalah during the season contributing to
25:03
[Khalid Al Awaisi]
our safe and responsible travel and tourism in Oman. Also as part
25:09
[Khalid Al Awaisi]
of it is commitment in in-country value drive, the company focused on the
25:15
[Khalid Al Awaisi]
development of local talent through providing training opportunities that
25:21
[Khalid Al Awaisi]
will help the youth be prepared for the market requirements and the evolving
25:26
[Khalid Al Awaisi]
energy transition and sustainability needs. To that I will hand over to Burair to continue…
25:33
[Burair Al Lawati]
Thank you Khalid, it's just worth mentioning, if – Ahmed – you just go back to the slide before…
25:40
[Burair Al Lawati]
…when it comes to aviation, there was one disclosure done recently, actually,
25:45
[Burair Al Lawati]
on the aviation business – and it was done on the 23rd of October regarding the tender
25:52
[Burair Al Lawati]
about a major aviation fuel farm operations in Muscat Airport. So as you
26:00
[Burair Al Lawati]
saw in that disclosure, we received a letter from our partner indicating that the current
26:06
[Burair Al Lawati]
contract will be expiring with the end of the year – 27th of December 2022. As we mentioned in
26:13
[Burair Al Lawati]
that disclosure, there's no material impact on the company in terms of… financial… financially, and so
26:23
[Burair Al Lawati]
that was clarified in the disclosure. The other aspect is also,
26:28
[Burair Al Lawati]
overall, the aviation volume grew this year compared to last year with,
26:34
[Burair Al Lawati]
you know, the improvements in the post-pandemic recovery as we saw in
26:40
[Burair Al Lawati]
the both tourism and aviation sector – and that reflected with some healthy
26:45
[Burair Al Lawati]
numbers for lubes and jet fuel volumes. So, let's move to the next point
26:51
[Burair Al Lawati]
which is our future strategy and plans. Actually, as indicated by both my colleagues,
27:01
[Burair Al Lawati]
Lamees and Khalid, the world is changing, the demographic structure is changing and as a result both
27:07
[Burair Al Lawati]
transportation and digital technologies are improving, and the various standards are also rising continuously.
27:14
[Burair Al Lawati]
Expectations are also changing with the society as they see ways to move to a
27:19
[Burair Al Lawati]
more lower carbon energy system – and in the same time look at the long-term
27:24
[Burair Al Lawati]
energy demands that are forecasted to increase in time rather than being at the same level or even decrease.
27:31
[Burair Al Lawati]
With that we look at the [inaudible] as a model for energy accelerates [acceleration], so Shell
27:38
[Burair Al Lawati]
responded with the announcement of an ambition to become a net-zero emissions energy business by 2050 or sooner in
27:45
[Burair Al Lawati]
step with the society. But while doing that, they continue to put customer first and to lead the low carbon energy
27:52
[Burair Al Lawati]
landscape to become a low-carbon leader while we also continue integrating our
27:57
[Burair Al Lawati]
products and services to meet the needs of our partners in terms of reduced
28:03
[Burair Al Lawati]
emissions and that at the same time growing or
28:10
[Burair Al Lawati]
increasing Shell’s financial resilience. We, as representatives from Shell and as
28:17
[Burair Al Lawati]
a leader in the energy industry, kind of felt that our purpose actually is to power progress together with more
28:23
[Burair Al Lawati]
cleaner energy solutions and stuff with the society. It's much like Oman Vision 2040, in fact, our strategy is as much
28:31
[Burair Al Lawati]
as about accelerating the transition to Net-Zero emission but in the same time creating value for our customers in
28:37
[Burair Al Lawati]
the society. So as you know, sustainable development is at the heart of everything we do in Shell. It's been part of our
28:43
[Burair Al Lawati]
Shell general business [inaudible] from 1976. And powering progress actually
28:51
[Burair Al Lawati]
sets our strategy to accelerate this transition. It's clear it's designed to
28:57
[Burair Al Lawati]
create… sustained… sustainable value for our shareholders, for our customers in the society at large and we have four
29:04
[Burair Al Lawati]
main pillars in support of our purpose to our progress.
29:10
[Burair Al Lawati]
Why we do that? We are also focused on
29:16
[Burair Al Lawati]
building on our values and our focus on safety as we continue to be to
29:22
[Burair Al Lawati]
basically champion that in our operations. We have set a target to becoming a net-zero emission [company] by 2050.
29:29
[Burair Al Lawati]
This means that we are reducing emissions from our operations from fuels
29:35
[Burair Al Lawati]
and other energy products. You heard about the lubricants that were mentioned by Khalid earlier. It also means
29:42
[Burair Al Lawati]
capturing and installing some of the main emission-reducing technologies from Shell. Globally Shell will be investing, on an
29:48
[Burair Al Lawati]
average of or between, two to three billion each year in the renewables energy solutions business.
29:54
[Burair Al Lawati]
With respect to nature, by 2030, Global Shell will increase the amount of
29:59
[Burair Al Lawati]
recycled plastic in packaging to 30% and ensure that packaging that we use in products is reusable or recyclable
30:06
[Burair Al Lawati]
and helping to improve air quality by reducing emissions for operations and provide a cleaner solution to
30:13
[Burair Al Lawati]
public transport, industry, and the power sector as well. Working with our partners and suppliers
30:19
[Burair Al Lawati]
to develop also new collaborations is key to what we are talking about.
30:24
[Burair Al Lawati]
Shell helps also power our lives by providing vital energy for homes, businesses, transportation, cooking, cooling, or
30:31
[Burair Al Lawati]
heating in other countries, and lighting. We are doing all this by generating value again for industrial holders and
30:37
[Burair Al Lawati]
keeping in mind our core values of honesty, integrity, and respect for people who are continuing focusing on safety.
30:43
[Burair Al Lawati]
It is what makes Shell Shell. We are working together with the partners,
30:48
[Burair Al Lawati]
including governments and relevant stakeholders to create innovative Mobility solutions with enhanced
30:54
[Burair Al Lawati]
efficiency, and contribute to sustainability, while helping drive towards lower carbon emission [goals] at Shell
31:00
[Burair Al Lawati]
and step with the society's progress to achieving 1.5-Celsius
31:05
[Burair Al Lawati]
goal of the United Nations Paris agreement. The decarbonization of our
31:10
[Burair Al Lawati]
mobility systems is the biggest trend shaping the future of our industry, so while governments and businesses
31:17
[Burair Al Lawati]
continue to work together to create innovative mobility solutions, and helping drive towards [a] low carbon future, a stronger collaboration is key
31:24
[Burair Al Lawati]
to accelerate our progress. At the same time, consumers’ aspirations are also shifting with fast pace. We are heading
31:32
[Burair Al Lawati]
towards a world where no single [inaudible] will dominate. There's been much promise and excitement about the role of
31:38
[Burair Al Lawati]
electric vehicles or electric charging, which we anticipate that it will play in
31:44
[Burair Al Lawati]
the future and we already seeing substantial growth globally. By 2030, we anticipate new car sales to be split 33%
31:51
[Burair Al Lawati]
by battery electric, 1% hydrogen, and 66% petrol or diesel globally – and in the
31:57
[Burair Al Lawati]
Middle East and Africa alone, the EV Market is expected to reach over 80 million dollars by 2026 alone.
32:05
[Burair Al Lawati]
However, this energy transition is just a transition… only able to revolutionize the energy system
32:11
[Burair Al Lawati]
overnight, which is why we are working to create a range of lower carbon products and services, fuels,
32:19
[Burair Al Lawati]
natural gas, biofuels, and hydrogen, and invest in these initiatives to help customers respond flexibly to the
32:25
[Burair Al Lawati]
challenge of decarbonization. For example, and we know the pace at which
32:30
[Burair Al Lawati]
EVs being adopted in Oman is not as fast as other parts of the world, but we have already started. As Khalid mentioned, we were the
32:37
[Burair Al Lawati]
first to launch the fast charging EV solution at the Al Bandar service station –
32:43
[Burair Al Lawati]
and we are looking at the data from the consumer reaction to those to that (sic.)
32:48
[Burair Al Lawati]
charge and which is also contributing to our plans and strategy in this area.
32:54
[Burair Al Lawati]
The future of mobility is as much about creating diverse and quality choices that increases customer’s convenience, as it's
33:01
[Burair Al Lawati]
about also moving people in [inaudible] in a sustainable way. We believe that many opportunities will emerge as we make the
33:06
[Burair Al Lawati]
global shift towards a low carbon future and it's [an] exciting time to be really in Mobility. To achieve that again, Lamees
33:14
[Burair Al Lawati]
mention that earlier in her statements that digitalization is having a huge impact on how we manage our energy use.
33:20
[Burair Al Lawati]
Arguably, the most important impact digitalization can have on decarbonization is to increase
33:27
[Burair Al Lawati]
our level of agility and improve our energy efficiency, including the
33:32
[Burair Al Lawati]
efficiency of our products our processes and our people. Shell Oman Marketing company remains committed to
33:38
[Burair Al Lawati]
meet the Sultanate’s growing energy demands in an economically, environmentally, and socially responsible way.
33:44
[Burair Al Lawati]
While we create sustainable value for the community, we continue to focus on ICV, enterprise development, road safety, environment
33:51
[Burair Al Lawati]
and the company is planning to reinforce its role in the energy transition training in the Sultanate to
33:56
[Burair Al Lawati]
align with its long-term strategy and direction with the Group’s ‘Powering Progress’ strategy as well as…
34:03
[Burair Al Lawati]
…Oman Vision 2040. The Company – Shell Oman Marketing Company – your company
34:08
[Burair Al Lawati]
strives to enforce its collaboration with those stakeholders and deliver its role as a responsible corporate citizen
34:14
[Burair Al Lawati]
serving Oman and its people under the leadership of his Majesty the Sultan and to support His Majesty’s
34:19
[Burair Al Lawati]
mission for the Sultanate. With that, I end my statement and would like to move to our Q and A session – and invite you to share
34:27
[Burair Al Lawati]
your questions. Thank you for listening and if you have any questions please share in the chat box so we can mute yourself to
34:34
[Burair Al Lawati]
share your question.
[Silence ensues]
34:41
[Burair Al Lawati]
So do we have any questions?
34:45
[Sameer Kattiparambil]
Hi, this is Sameer from EFG Hermes.
34:47
[Sameer Kattiparambil]
I have a couple of questions if you may.
34.50
[Burair Al Lawati]
Yeah – please.
34.52:
[Sameer Kattiparambil]
Yeah, thank you so much for your presentation. The first
34:55
[Sameer Kattiparambil]
question is on, you know, given the high interest rate I just want to understand how you plan to manage your balance
35:01
[Sameer Kattiparambil]
sheet as I can see the debt has shot up significantly year-over-year and at the same time you are sitting on a 20 million
35:07
[Sameer Kattiparambil]
cash which earns very less margin. Right, so…
35:13
[Sameer Kattiparambil]
Okay, yeah. That's my first question.
35.18
[Burair Al Lawati]
Okay, so that's one question. Lamees, you may want to answer that…
35:20
[Lamees Al Lawati]
so on the cash cycle we pretty much
35:25
[Lamees Al Lawati]
run a simple cycle, so we accumulate cash from our receivables up
35:32
[Lamees Al Lawati]
until the mid-point of the following month, where we make the single largest payment to the national oil company for
35:40
[Lamees Al Lawati]
the purchases of the hydrocarbon we have. So, most of our loans are short-term in nature and the tenure
35:45
[Lamees Al Lawati]
for these loans, you know, varies between 15 days to 30 days maximum. So any
35:51
[Lamees Al Lawati]
numbers that you have seen reflected in the balance sheet or a snapshot of that particular period, so towards the end of
35:57
[Lamees Al Lawati]
September or quarter three, that was only the short-term loan that we
36:03
[Lamees Al Lawati]
have to inject cash and find our working capital
36:08
[Lamees Al Lawati]
requirements for that specific period in time. In addition to that, we obviously had
36:15
[Lamees Al Lawati]
a long-term loan that we have borrowed from the market back in 2018, it was worth… the whole value was 10 million Omani Riyals.
36:23
[Lamees Al Lawati]
We have settled two-thirds through two tranches in 2020 and 2021 and we are sitting on the
36:30
[Lamees Al Lawati]
last tranch at the moment, which is 3.3 million Riyals. We have reclassified it, given the period that is remaining for it –
36:36
[Lamees Al Lawati]
from long-term loan to short-term loan and that's the movement that you have seen, which might have also
36:42
[Lamees Al Lawati]
inflated our short-term loan balances, taking into consideration that it was actually long-term in nature – but it has
36:49
[Lamees Al Lawati]
been re-classed. On the cash balance, so again, it's a snapshot of where we were sitting at
36:55
[Lamees Al Lawati]
that point in time. Sometimes, towards the end of the month, we receive large payments from our customers which are
37:01
[Lamees Al Lawati]
not part of the cash forecast, and prior to that we would have made our commitments with the local banks. We would have
37:07
[Lamees Al Lawati]
borrowed already and so the cash balance that we have is only a picture at that
37:12
[Lamees Al Lawati]
point in time that then we use to settled the short-term loan balances. It's not consistent that we actually look at the cash balances at the end of
37:19
[Lamees Al Lawati]
every quarter; we were not sitting at 20 million worth of cash balance but it accumulated and it was you know just a
37:25
[Lamees Al Lawati]
timing difference between when we receive our cash from customers and when we settled the loan.
37:31
[Burair Al Lawati]
All right. I have… we have another question here from Pushpita, which is… she says thank you for running a thorough (sic.)…
37:37
[Burair Al Lawati]
…through your financials. What factors resulted in the decline in net income this quarter related to the same quarter last year?
37:43
[Lamees Al Lawati]
[Inaudible] So there are a number of components. If you actually look at
37:48
[Lamees Al Lawati]
the gross profit, you might have noticed that although we have recorded or reported a top line increase of 32%
37:55
[Lamees Al Lawati]
our gross margin was maintained at 19%. Now, a big component of that and
38:01
[Lamees Al Lawati]
particularly for Q3 2022, was related to the evaluation of stock. So, for the
38:08
[Lamees Al Lawati]
products that we procure at international prices, which are subject to price movements – and we have seen that particularly in the aviation segment
38:15
[Lamees Al Lawati]
and you know that movement in the valuation of the inventory that we had in hand contributed to quite a large
38:22
[Lamees Al Lawati]
hit and it increased in our cost of goods sold. In addition to that, I've also explained earlier that we have increased
38:30
[Lamees Al Lawati]
our OpEX expenditure in third quarter of the year, so these are costs that we have eventually or earlier in the year phased
38:37
[Lamees Al Lawati]
In the… in this period. So, both factors going together: so the increase in cost
38:42
[Lamees Al Lawati]
of goods sold coupled with the increase in OpEX have resulted in the…
38:48
[Lamees Al Lawati]
…you know… the decline that we have seen versus the same quarter last year.
38.54
[Burair Al Lawati]
All right, any other questions from the participants?
38:55
[Sameer Kattiparambil]
Yeah, I have a couple more questions as well.
39:01
[Sameer Kattiparambil]
First – given the high inflationary scenario you are seeing… any chance
39:06
[Sameer Kattiparambil]
the government would review changes to a fixed margin?
39:12
[Burair Al Lawati]
Okay, so you know inflation is something that is seen globally across…
39:18
[Burair Al Lawati]
…not only in Oman. So, it is something where (sic.) Central Banks will deal with and we don't, you know, control that but
39:24
[Burair Al Lawati]
what we have seen in the market is that there are discussions about how the
39:30
[Burair Al Lawati]
government will help, you know, address the impact on inflation on people and
39:37
[Burair Al Lawati]
especially from a social point of view. In terms of margins, these are, you
39:43
[Burair Al Lawati]
know... the regulators in the market are the ones who set these margins for fuel and there is a committee, and we are…
39:51
[Burair Al Lawati]
…they work independently from fuel marketing companies, so I wouldn't be able to comment on what they will be
39:58
[Burair Al Lawati]
doing or know actually what they will be doing in that area. What I can say is that we make our
40:04
[Burair Al Lawati]
opinion very clear to them. We do have opportunities and chances where we discuss industry-related affairs and
40:14
[Burair Al Lawati]
we share our views transparently, openly, effectively, and in compliance with the
40:19
[Burair Al Lawati]
way we do business. So they are aware of our, you know, ideas in this area and
40:25
[Burair Al Lawati]
the challenges that are facing the market. But we continue to operate under their regulations and to optimize and
40:33
[Burair Al Lawati]
maximize our value that we create for the shareholders.
40:38
[Sameer Kattiparambil]
Oh, that's very clear. The second question from me is on… you mentioned about, you know, a large IT
40:45
[Sameer Kattiparambil]
investment plan in mobility solutions. So, could you give more color on that?
40:51
[Burair Al Lawati]
So, Khalid would you like to take this up?
40.55
[Khalid Al Awaisi]
Yes, actually the idea of digitalization is
40:58
[Khalid Al Awaisi]
mainly to upgrade our IT network connectivity across all the sites and
41:04
[Khalid Al Awaisi]
that will enable – Insha’Allah – in introducing a more digital solution (sic.)
41:09
[Khalid Al Awaisi]
which will help to improve interface directly with the customer. We are working on a number of projects and
41:16
[Khalid Al Awaisi]
hopefully in quarter four will be in a better position to disclose and share what are these projects.
41.25
[Burair Al Lawati]
Great. Any other questions from your side – you said you had a few more?
41:27
[Sameer Kattiparambil]
Yeah, one last question from my side. The Shell Select stores…
41:34
[Sameer Kattiparambil]
…so what percentage of revenue comes from this segment, and how big is the margin from that segment, and
41:41
[Sameer Kattiparambil]
what are your growth strategies?
41:48
[Khalid Al Awaisi]
Growth… definitely the market is recovering after the previous
41:53
[Khalid Al Awaisi]
impact of the pandemic and have seen that [there is] an increase in the proceeds coming
41:59
[Khalid Al Awaisi]
from the Select shops. We are working on
42:04
[Khalid Al Awaisi]
expanding the footprint; for the Select, today, we have 31 shops and we are looking for more shops to be opened
42:10
[Khalid Al Awaisi]
towards this month and next month – Insha’Allah – and we definitely… we are very
42:15
[Khalid Al Awaisi]
focused to grow the segment. Currently, the total contribution from
42:21
[Khalid Al Awaisi]
the NFR – what we call Non-Fuel Retail – including Select, it is below the expectations… something below 10%
42:28
[Khalid Al Awaisi]
and we are looking, hopefully, in part of the global ambitions, to grow
42:34
[Khalid Al Awaisi]
the NFR business to contribute not less than 50% to the bottom line and
42:39
[Khalid Al Awaisi]
we are moving towards that directions. Yes, we are behind currently but we are
42:44
[Khalid Al Awaisi]
clear about what is required to bring us back to that on track.
42:51
[Burair Al Lawati]
Excellent – thanks Khalid. I hope that answers your question but if anyone else has any question, please
42:57
[Burair Al Lawati]
feel free to unmute yourself or to post it in the chat.
43:04
[Burair Al Lawati]
If there is no more questions, I will take it that we are concluding our
43:10
[Burair Al Lawati]
session today. Let me thank you again for attending this engagement. We really appreciate your presence, your questions
43:17
[Burair Al Lawati]
and your kind interaction. Also I'd like to thank again my colleagues Lamees, Khalid
43:23
[Burair Al Lawati]
and we have here a soldier, Ahmed, who's been operating the slides for us and
43:30
[Burair Al Lawati]
supporting us throughout. Thanks Ahmed for this, and we look forward to our next
43:36
[Burair Al Lawati]
session – Insha'Allah – hopefully in Q1. We will announce that when we know exactly the dates – we look forward to having you there.
43:42
[Burair Al Lawati]
Thank you again and have a lovely day.
[Silence ensues]
[Video ends]