Q2 2026 OQ Gas Networks SAOC Earnings Call

August 25, 2026

[Company Representative] (OQ Gas Networks): I am OQ GN Investor Relation Manager. Thank you for joining us today to discuss our camera performance. Thank you for joining us today to discuss our H1 2026 result and performance. Before we begin, I would like to give a brief statement in Arabic. «speaks in Arabic» The structure of the presentation will be an overview and highlight of the operation and finance, presented by the CEO, Engineer Mansour Al Abdali, followed by the growth aspiration by Engineer Saif Al Hosni. Finally, Sultan Al Balushi, our acting CFO, will take you through our financial in details. After we finish the presentation, we will open the Q&A session. Before we begin, I would like to refer you to slide number two from this presentation, which is about the disclaimer statement.

Ahmed Al Khuzairi: I am OQ Gas Networks Investor Relation Manager. Thank you for joining us today to discuss our camera performance. Thank you for joining us today to discuss our H1 2026 result and performance. Before we begin, I would like to give a brief statement in Arabic. [Foreign language]

Speaker #1: I am OQ GN, and this is the relation manager.

Speaker #2: Thank you for joining us today to discuss our camera for myself.

Speaker #1: Yes. Yeah, go ahead.

Speaker #2: Thank you for joining us today to discuss our first half of 2026 results and performance. Before we begin, I would like to give a brief statement in Arabic: السلام عليكم ورحمة الله وبركاته.

Speaker #2: شكراً جزيلاً للجميع على الحضور في هذه الجلسة النقاشية لمناقشة الأداء والنتائج المالية للشركة للنصف الأول من سنة 2026. ستكون النقاشات خلال هذه الجلسة باللغة الإنجليزية، ويمكن التداخل مع فريق الإدارة التنفيذية في فقرة الأسئلة والأجوبة باللغة العربية.

Ahmed Al Khuzairi: The structure of the presentation will be an overview and highlight of the operation and finance, presented by the CEO, Engineer Mansoor Ali Al-Abda, followed by the growth aspiration by Engineer Saif Al Hosni. Finally, Sultan Al Balushi, our acting CFO, will take you through our financial in details. After we finish the presentation, we will open the Q&A session. Before we begin, I would like to refer you to slide number two from this presentation, which is about the disclaimer statement.

Speaker #2: The structure of the presentation will be an overview and highlight of the operation and finance, presented by the CEO, Engineer منصور العبدلي, followed by the growth aspiration by Engineer سيف الحوسني. Finally, سلطان الدوشي, our Acting CFO, will take you through our financials in detail.

Speaker #2: After we finish the presentation, we will open the Q&A session. Before we begin, I would like to refer you to slide number 2 of this presentation, which is about the disclaimer statement.

Speaker #2: In today's discussion, we may address some forward-looking statements based on the information available to us as of now. Accordingly, we are not committed to maintaining the same views if any market conditions change.

[Company Representative] (OQ Gas Networks): In today course of discussion, we may discuss some forward-looking statements based on the information available for us as of now. Accordingly, we are not committed to keep the same views if any market condition changes. I will hand it now to Engineer Mansour.

Ahmed Al Khuzairi: In today course of discussion, we may discuss some forward-looking statements based on the information available for us as of now. Accordingly, we are not committed to keep the same views if any market condition changes. I will hand it now to Engineer Mansoor.

Speaker #2: So to begin, I will now hand it over to Engineer Mansour.

Speaker #3: Okay. السلام عليكم. Good afternoon and good morning to all of you. Thank you for joining us in this session. We will be briefing you about the performance of OQ GN for the first half of 2026.

Mansoor Al Abdali: Okay. Salaam Alaikum. Good afternoon and good morning to all of you. Thank you for joining us in this session, where we will be briefing you about the performance of OQ GN for the H1 2026. I will be covering very high-level operational and financial results. My colleagues, Sultan Al Balushi and Saif Al Hosni will take us into other aspects of this presentation, especially on the financial and the growth aspiration. Very proud about OQ GN to highlight that in the safety part, we almost completed 24 million LTI free hours. Despite the very large operation we are currently undertaking in our core business, but also on our growth side, where we are constructing a large project of 198-kilometer of 42-inch pipeline, as well as other medium and small-size projects.

Mansoor Ali Al-Abda: Okay. Salaam Alaikum. Good afternoon and good morning to all of you. Thank you for joining us in this session, where we will be briefing you about the performance of OQ Gas Networks for the H1 2026. I will be covering very high-level operational and financial results. My colleagues, Sultan Al Balushi and Saif Al Hosni will take us into other aspects of this presentation, especially on the financial and the growth aspiration. Very proud about OQ Gas Networks to highlight that in the safety part, we almost completed 24 million LTI free hours. Despite the very large operation we are currently undertaking in our core business, but also on our growth side, where we are constructing a large project of 198-kilometer of 42-inch pipeline, as well as other medium and small-size projects.

Speaker #3: I'll be covering very high-level operational and financial results, but my colleagues Sultan El Bulushi and Saif Al Hosni will take us through other aspects of this presentation, especially on the financials and our growth aspirations.

Speaker #3: Very proud about OQ GN to highlight that in the safety part we almost completed 24 million LTI-free hours. Despite the very large operation, we are currently undertaking in our core business but also on our growth side where we are constructing a large project of 198 km of 42-inch pipeline as well as other medium and small-sized projects.

Speaker #3: We're also very proud that this year, in the first half, we have delivered or achieved our highest quantity per day, where we reached more than 137 million standard cubic meters in a single day in June this year.

Mansoor Al Abdali: We are also very proud, this year for the first half, to have delivered or achieved our highest quantity per day, where we reached more than 137 million standard cubic meters in one single day in June this year. Another key highlight, we are also very proud to say we have transported, for the first half, more than 22 billion cubic meters of gas, almost more than 9% compared to the same period last year. If you move on, Ahmed. Another aspect that we are very proud of, and that is on the sustainability side. We are very proud to have been awarded the Platinum Award during the Oman Sustainability Week on our ESG agenda. This was very much well-received. We have competed amongst very large organizations in the country.

Mansoor Ali Al-Abda: We are also very proud, this year for the first half, to have delivered or achieved our highest quantity per day, where we reached more than 137 million standard cubic meters in one single day in June this year. Another key highlight, we are also very proud to say we have transported, for the first half, more than 22 billion cubic meters of gas, almost more than 9% compared to the same period last year. If you move on, Ahmed. Another aspect that we are very proud of, and that is on the sustainability side. We are very proud to have been awarded the Platinum Award during the Oman Sustainability Week on our ESG agenda. This was very much well-received. We have competed amongst very large organizations in the country.

Speaker #3: Another key highlight we are also very proud to see is that we have transported, for the first half, more than 22 billion cubic meters of gas—almost more than 9% compared to the same period last year.

Speaker #3: If you could move on, Ahmed. Another aspect that we are very proud of, and that's on the sustainability side: we're very proud to have been awarded the Platinum Award during the Oman Sustainability Week.

Speaker #3: On our ESG agenda, this was very much well received, and we have competed amongst very large organizations in the country. Another key achievement in this regard is our GHG emission reduction, especially in Scope 1 and 2, where we reduced by more than 18%.

Mansoor Al Abdali: Another key achievement in this regard is our GHG emission reduction, especially in Scope 1 and 2, where we reduced by more than 18%. Ahmed, if we move on to the financial highlights. In this slide, I will just highlight very key messages. That is our profitability, which has increased by 6.7% compared to the same period in 2025. Sultan will take us in more details about this very shortly. Our asset has grown since the year 2023 by 5%, which is in line with our expectation. We are also able to recover more than 93% of our expenses from the regulator. This is a key high-level highlight. Of course, we can dig deep into any aspects you want us to outline. Saif and Sultan will take us into the more details, especially on growth and financial aspects.

Mansoor Ali Al-Abda: Another key achievement in this regard is our GHG emission reduction, especially in Scope 1 and 2, where we reduced by more than 18%. Ahmed, if we move on to the financial highlights. In this slide, I will just highlight very key messages. That is our profitability, which has increased by 6.7% compared to the same period in 2025. Sultan will take us in more details about this very shortly. Our asset has grown since the year 2023 by 5%, which is in line with our expectation. We are also able to recover more than 93% of our expenses from the regulator. This is a key high-level highlight. Of course, we can dig deep into any aspects you want us to outline. Saif and Sultan will take us into the more details, especially on growth and financial aspects.

Speaker #3: So Ahmed, if we move on to the financial highlights—in this slide, I will just highlight very key messages, and that's our profitability, which has increased by 6.7% compared to the same period in 2025. Sultan will take us in more detail about this very shortly.

Speaker #3: Our assets have grown since 2023 by 5%, which is in line with our expectations. We were also able to recover more than 93% of our expenses from the regulator.

Speaker #3: These are the key high-level highlights. Of course, we can dig deeper into any aspects you want us to outline. Saif and Sultan will now take us into more detail, especially regarding growth and financial aspects.

Speaker #2: Thank you, Abu Fahed. So, OQ GN continues to invest ahead of demand, expanding our natural gas infrastructure according to the price control plans. In the next two years, our strategic growth focus is on a combination of backbone expansions and infrastructure reach into greenfield areas across the country.

Saif Al Hosni: Thank you, Abu Fahed. OQ Gas Networks continues to invest ahead of demand, expanding our natural gas infrastructure according to the price control plans. In the next 2 years, our strategic growth focus is on a combination of backbone expansions and infrastructure reach into greenfield areas across the country. Key growth projects for the next 2 years include the 193-kilometer Fahud-Sohar loop line, which is under construction, the Bodur-TCR 31-kilometer pipeline.

Speaker #2: Key growth projects for the next two years include the 193 km loop line, which is under construction; the Budurte CR 31 km pipeline; and the 13 km DOCOM port pipeline, which is currently under construction in DOCOM.

Saif Al Hosni: The 13-kilometer Duqm port pipeline, which is under construction currently in Duqm. That presents a summary of our current growth plans until the end of the price control period. Without further ado, I give the spotlight to my colleague, Sultan.

Speaker #2: And that presents a summary of our current growth plans until the end of the price control period. And without further ado, I give the spotlight to my colleague, Sultan.

Speaker #4: Thank you, sir. Moving on to the financials, OQ GN delivered a solid performance in H1 2026 compared to the same period last year. Total income increased by 7%, reaching OMR 96.4 million compared to the same period last year.

Sultan Al Balushi: Thank you, sir. Moving on to the financials. OQ Gas Networks delivered a solid performance in H1 2026 compared to the same period last year. Total income increased by 7%, reaching OMR 6.4 million compared to the same period last year. The growth was primarily driven by higher income from concession assets and increase in our construction activity. Net profit also increased by 6.7% to OMR 27.1 million. The increase reflects the strength and resilience of our regulated business model, supported by the growth in concession assets. As you can see, the increase in our asset base led to an increase in our income on concession of almost OMR 3.6 million, which was partially offset by increase in our borrowing cost mainly to fund the growth plans which we had during the period. Moving on to the income build-up net of construction costs.

Speaker #4: The growth was primarily driven by higher income from concession assets and an increase in our construction activity. Net profit also increased by 6.7% to OMR 27.1 million.

Speaker #4: The increase reflects the strength and resilience of our regulated business model, supported by the growth in concession assets. If you can see, the increase in our asset base led to an increase in our income on concession of almost $3.6 million, which was partially offset by an increase in our borrowing cost, mainly due to leverage to fund the growth plans that we had during the period.

Speaker #4: Moving on to the income build-up net of construction costs, it's worth highlighting—and explaining to the new investors also—that OQGN follows IFRS 12 accounting standard, where for any new growth project we execute, we capture in our P&L the construction cost, and on top of the actual cost, we charge a margin of 7.79, which is equivalent to our RAC. Here you see on the top line of our P&L the construction revenue.

Sultan Al Balushi: It's worth highlighting and explaining to the new investors also that OQGN follow IFRIC 12 accounting standard, where for any new growth project we execute, we capture in our P&L construction cost and on top of the actual cost, we charge a margin of 7.79%, which is equivalent to our WACC, where you see on the top line of our P&L the construction revenue. The focus here to show the sustainability of our income and to show the steady growth over the last three years. The net impact of construction cost and construction revenue is highlighted here in orange, where we call it the construction margin. To focus on the H1 2026 performance, you can see that our overall net income increased by almost 6.7%. Moving on to the cost overview.

Speaker #4: The focus here is to show the sustainability of our income and to show the steady growth over the last three years. The net impact of construction costs and construction revenue is highlighted here in orange, where we call it the construction margin.

Speaker #4: To focus on the H1 2026 performance, you can see that our overall net income increased by almost 6.7%. Moving on to the cost overview, as we highlighted in the first slide, our total revenue increased, and one of the reasons was the increase in our construction revenue.

Sultan Al Balushi: As we highlighted in the first slide that our total revenue increased and one of the reason was increase in our construction revenue. In line with that, you can see that H1 2026 actual construction cost is higher than last year, which present that we had a higher CapEx for the period in this year compared to the same period last year. Moving on to the OpEx and admin expenses. You can see that the cost is well controlled. If you see the increase compared to last year is a very minor increase, which is mainly inflationary increase. It's worth highlighting that we managed, through our allowance, to recover almost 93.2% out of these expenses. Finally, looking at our balance sheet side of the business.

Speaker #4: In line with that, you can see that H1 2026 actual construction cost is higher than last year, which presents that we had a higher capital expenditure for the period this year compared to the same period last year.

Speaker #4: Moving on to the OPEX and admin expenses, you can see that the cost is well controlled, and if you see the increase compared to last year, it is a very minor increase, which is mainly an inflationary increase. It's worth highlighting that we managed, through our allowance, to recover almost 93.2% of these expenses.

Speaker #4: Finally, looking at our balance sheet side of the business, you can see that our asset base has been growing over the last three years, with an average growth of almost 5%. And if we specifically look at H1 2026, with the closing of December 2025, already a growth of 1.6% is achieved.

Sultan Al Balushi: You can see that our asset base has been growing over the last three years with an average growth of almost 5%. If we specifically look at H1 2026 with the closing of December 2025, already a growth of 1.6% is achieved. Moving on to the capital structure of the company and our leverage capacity. You can see that these are the key ratios which are monitored once it comes to regulated business. You can see that OQGN net debt to adjusted EBITDA is at 3.8 almost, whereas the industry average is almost 5.5. If we look specifically at net debt to RAB, our existing facilities have a restriction that we shouldn't borrow more than 70% of our RAB asset base. Today the current ratio is around 0.36, which showcase the capacity which OQGN have to leverage on the growth plans which it has.

Speaker #4: Moving on to the capital structure of the company and our leverage capacity, you can see that these are the key ratios which are monitored when it comes to regulated business. You can see that OQ GN net debt to adjusted EBITDA is at 3.8, whereas the industry average is almost 5.5.

Speaker #4: And if we look specifically at net debt to RAC, our existing facilities have a restriction that we shouldn't borrow more than 70% of our RAC asset base. Today, we are assigning, and the current ratio is around 0.36, which showcases the capacity which OQ GN has to leverage on the growth plans which it has.

Speaker #4: In summary, OQ GN delivered another strong set of results in the first half of 2026, driven by growth in income and asset base profitability, while maintaining strong margins, strong cash flows, and a prudent capital structure.

Sultan Al Balushi: In summary, OQGN delivered another strong set of results in the first half of 2026, driven by growth in income, growth in asset base profitability while maintaining strong margins, strong cash flow, and a prudent capital structure. We remain well-positioned to execute our plans and continue creating long-term value to our shareholders. Thank you. By this, we come to an end of our presentation. Now we will open the question and answer. If you want to ask question, please raise your hand, unmute yourself, and ask the question. Yes, the first question is coming from Sashank. Please, Sashank. You can go ahead. We can't hear you, Sashank.

Speaker #4: We remain well positioned to execute our plans and continue creating long-term value for our shareholders.

Speaker #2: Thank you. With this, we come to an end of our presentation. So now, we will open the question and answer session.

Ahmed Al Khuzairi: Thank you. By this, we come to an end of our presentation. Now we will open the question and answer. If you want to ask question, please raise your hand, unmute yourself, and ask the question. Yes, the first question is coming from Sashank. Please, Sashank. You can go ahead. We can't hear you, Sashank.

Speaker #2: So if you want to ask a question, please raise your hand, unmute yourself, and ask the question. Yes, the first question is coming from Shashnak.

Speaker #2: Please, Shashnak, you can go ahead. We can't hear you, Shashnak.

Speaker #1: Yes, can you hear me now?

Speaker #2: Yes.

[Analyst] (BofA Global Research): Yes. Can you hear me now?

Sashank Lanka: Yes. Can you hear me now?

Speaker #1: Yeah, thank you very much for the presentation and the opportunity to ask questions. I have a couple of questions. I think the first one is just on your CapEx guidance during the, you know, price control three period.

Sultan Al Balushi: Yes.

Ahmed Al Khuzairi: Yes.

[Analyst] (BofA Global Research): Thank you very much for the presentation and the opportunity to ask questions. I have a couple of questions. I think the first one is just on your CapEx guidance during the price control three period. I think on the last earnings call, you said you spent about OMR 177 million in 2024 and 2025 and out of the OMR 294 million. The remaining should be spent in 2026 and 2027. So can you give us the latest number there? How much have you spent versus your total CapEx during the price control three? That is the first question. The second question is just related to the dividend policy. We understand it is going to change from next year. So any update there? Thank you.

Sashank Lanka: Thank you very much for the presentation and the opportunity to ask questions. I have a couple of questions. I think the first one is just on your CapEx guidance during the price control three period. I think on the last earnings call, you said you spent about OMR 177 million in 2024 and 2025 and out of the OMR 294 million. The remaining should be spent in 2026 and 2027. So can you give us the latest number there? How much have you spent versus your total CapEx during the price control three? That is the first question. The second question is just related to the dividend policy. We understand it is going to change from next year. So any update there? Thank you.

Speaker #1: I think on the last earnings call you said you spent about 177 million reals in '24 and '25 out of the 294 million, and most of the remaining should be spent in '26 and '27.

Speaker #1: So, can you give us the latest number there — how much have you spent versus your total Capex during the price control three? That's the first question. And the second question is just related to the dividend policy; we understand it is going to change from next year.

Speaker #1: So, any update there? Thank you.

Speaker #4: Sashank, so for the Capex, as we highlighted in our previous calls, the total Capex approved under the current price control period is 294, as you rightly mentioned. We as a management believe that we can achieve up to 90% of that plan, and so far, we have achieved almost 63% of the overall plan.

Saif Al Hosni: Sashank, for the CapEx, as we highlighted in our previous calls, the total CapEx approved under the current price control period is 294, as you rightly mentioned. We as a management believe that we can achieve up to 90% of that plan. So far, we achieved almost 63% of overall plan. Moving on to the dividend questions. Our current dividend policy is still valid till the end of this year, which is 11.2 baisa per share. Upon reaching towards the end of this period, the management again will look at different option and will get the alignment and the approval of the board, accordingly, it will be disclosed in the market.

Sultan Al Balushi: Sashank, for the CapEx, as we highlighted in our previous calls, the total CapEx approved under the current price control period is 294, as you rightly mentioned. We as a management believe that we can achieve up to 90% of that plan. So far, we achieved almost 63% of overall plan. Moving on to the dividend questions. Our current dividend policy is still valid till the end of this year, which is 11.2 baisa per share. Upon reaching towards the end of this period, the management again will look at different option and will get the alignment and the approval of the board, accordingly, it will be disclosed in the market.

Speaker #4: Moving on to the dividend questions, our current dividend policy is still valid until the end of this year, which is 11.2 baizas per share. Upon reaching the end of this period, the management will again look at different options, get the alignment and the approval of the board, and accordingly it will be disclosed to the market.

Speaker #1: Okay, great. Thanks for that. Maybe just a follow-up on the next price control starting from 2028. Should we assume a similar mechanism in terms of the time period and WACC as well? Any guidance you can provide on that?

[Analyst] (BofA Global Research): Okay, great. Thanks for that. Maybe just a follow-up on the next price control, starting from 2028. Should we assume a kind of a similar mechanism in terms of the time period, and WACC as well? Any guidance you can provide on that?

Sashank Lanka: Okay, great. Thanks for that. Maybe just a follow-up on the next price control, starting from 2028. Should we assume a kind of a similar mechanism in terms of the time period, and WACC as well? Any guidance you can provide on that?

Speaker #4: So, to answer your first question, yes, we expect the next price control period to be for four years, starting in 2028. As for the WACC, this is still a work in progress, and I think more clarity will come towards the end of next year.

Sultan Al Balushi: To answer your first question, yes, we expect the next price control period to be for 4 years, starting 2028. As for the WACC, this is still work in progress and I think more clarity would come towards the end of next year.

Saif Al Hosni: To answer your first question, yes, we expect the next price control period to be for 4 years, starting 2028. As for the WACC, this is still work in progress and I think more clarity would come towards the end of next year.

Speaker #1: Okay, okay, very clear. Thank you so much.

[Analyst] (BofA Global Research): Okay. Very clear. Thank you so much.

Sashank Lanka: Okay. Very clear. Thank you so much.

Speaker #4: Thank you Shashnak.

Speaker #2: We have another question from Taha Lawati.

Sultan Al Balushi: Thank you, Sashank. We have another question from Taha Al Lawati.

Ahmed Al Khuzairi: Thank you, Sashank. We have another question from Taha Al Lawati.

Speaker #5: Hi, assalamu alaikum. Am I audible?

Taha Al Lawati: Hi. As-Salaam-Alaikum. Am I audible?

Speaker #2: Yes you are.

Sultan Al Balushi: Yes, you are good.

Speaker #5: Hi, hi, management. This is Taha Lawati from Jebel Asset Management. I just have two questions. At the end of last year, you announced an acquisition of equipment, which just made me question how many more ways of inorganic growth still exist in the market.

Taha Al Lawati: Hi. Hi, management. As-Salaam-Alaikum. Inshallah, hope you can hear. This is Taha Al Lawati from Jabal Asset Management. I just have two questions. At the end of last year, you announced an acquisition of equipment, which just made me question how many more ways of inorganic growth still exist in the market. If so, are you pursuing or looking at that first question? My second question is on the OpEx. You mentioned that the increase was due to inflation, but from my understanding is that OpEx is adjusted to inflation annually. Can you just explain how the regulator accounts for the future inflation and how the reconciliation occurs if the figure exceeds the regulator's expected inflation?

Speaker #5: So, if so, are you pursuing or looking at the first question? My second question is on the OPEX. You mentioned that the increase was due to inflation.

Speaker #5: But from my understanding, OPEX is adjusted to inflation annually. So, can you just explain how the regulator accounts for future inflation and how the reconciliation occurs if the figure exceeds the regulator's expected inflation?

Speaker #4: So, I think the first question—and then the second question, we'll see how we take that. So, basically, OQGN's mandate is to consolidate all gas transportation infrastructure in the country under one umbrella.

Saif Al Hosni: Good question. Okay. I take the first question, then the second question, we will see how we take that up. OQ Gas Networks' mandate is to consolidate all gas transportation infrastructure in the country under one umbrella. It is distributed across greenfield projects or acquisition or asset transfer of existing pipelines that were built or operated by other entities. The last acquisition, which was BP Ghazeer acquisition that happened last year marked a significant chapter in this M&A or acquisition strategy. We continue to pursue whatever is remaining across the country. They are not many because the company has already acquired or transferred the assets of the majority of natural gas pipelines already. We continue to deliver the mandate and transfer what is remaining throughout this price control and next price control. Of course, these plans are submitted to the regulator upfront and are approved by the regulator.

Speaker #4: And it's distributed across greenfield projects or acquisition or asset transfer of existing pipelines that were built or operated by other entities. So, the last acquisition, which was the BP Ghazir acquisition that happened last year, marked a significant, you know, chapter in this M&A or acquisition strategy.

Speaker #4: We continue to pursue whatever is remaining across the country. There are not many because the company has already acquired or transferred the assets of the majority of natural gas pipelines already.

Saif Al Hosni: We continue to pursue whatever is remaining across the country. They are not many because the company has already acquired or transferred the assets of the majority of natural gas pipelines already. We continue to deliver the mandate and transfer what is remaining throughout this price control and next price control. Of course, these plans are submitted to the regulator upfront and are approved by the regulator. We know what they are. That is where it comes into our mandate. But if we identify any acquisition that can add value to Oman Inc. or to OQ Gas Networks, then we take these separately and we pursue them accordingly. That is for the first question. You want to start with the second question? Okay.

Speaker #4: So we continue to deliver the mandate and transfer what is remaining throughout this price control and the next price control. Of course, these plans are submitted to the regulator upfront and are approved by the regulator.

Speaker #4: So we know what they are, and that's where it comes into our mandate. But if we identify any acquisition that can add value to Oman Inc. or to OQ GN, then we take these separately and we pursue them accordingly.

Saif Al Hosni: We know what they are. That is where it comes into our mandate. But if we identify any acquisition that can add value to Oman Inc. or to OQ Gas Networks, then we take these separately and we pursue them accordingly. That is for the first question. You want to start with the second question? Okay.

Speaker #4: That's where the first question—do you want to start with the second question? Okay.

Speaker #5: And just to follow up on the first question, if I may. So, if these are submitted in advance, can we expect any additions in terms of inorganic growth for this price control?

Taha Al Lawati: Just a follow-up on the first question.

Saif Al Hosni: Yes.

Taha Al Lawati: If I may. If these are submitted in advance, can we expect any additions in terms of inorganic growth for this price control?

Speaker #4: So currently, what we have is, or what our acquisition plans are, is as per the plan submitted and approved by the regulator. Now, whatever we would submit in the next price control is still a work in progress.

Saif Al Hosni: Currently, what we have is, or what our acquisition plans are as per the plan, submitted and approved by the regulator. Whatever we would submit in the next price control is still work in progress.

Speaker #4: And more clarity will come once we receive advice from the regulator next year. But for the current price control period, we don't expect anything out of the plan.

Saif Al Hosni: More clarity would come towards the advice we get from the regulator next year. But for the current price control period, we don't expect anything out of the plan.

Speaker #1: Yeah. Well, but that's safe also to add. This is in terms of acquisition, but also growth. If anything comes in the pipeline, the company is always positioned nicely to take over those projects.

Mansoor Al Abdali: Yeah. But that is Saif also to add, this is in terms of acquisition, but also growth. If anything comes in the pipeline, the company always positioned nicely to take over those projects. We can give the example of Bodur, which was not in the price control, Saif correcting here, but then this opportunity came along with the PDO and OQGN was recognized as the best entity to undertake this project, which is progressing very nicely.

Mansoor Ali Al-Abda: Yeah. But that is Saif also to add, this is in terms of acquisition, but also growth. If anything comes in the pipeline, the company always positioned nicely to take over those projects. We can give the example of Bodur, which was not in the price control, Saif correcting here, but then this opportunity came along with the PDO and OQGN was recognized as the best entity to undertake this project, which is progressing very nicely.

Speaker #1: And we can give the example of Bodoer, which was—you know, it was not in the price control, so correct me here—but then this opportunity came along with PDO, and OQ GN was recognized as the best entity to undertake this project.

Speaker #1: And which is progressing very nicely.

Speaker #5: Understood. Thank you so much.

Saif Al Hosni: Understood. Thank you so much.

Taha Al Lawati: Understood. Thank you so much.

Taha Al Lawati: What is the start of inflation? How is it adjusted?

Speaker #4: So for the cost question, there is an allowance given for inflation at the beginning of the price controls, but market dynamics change. Different things change.

Sultan Al Balushi: So-

Saif Al Hosni: So-

Sultan Al Balushi: If you slide the deck, okay, now. For the cost question, there is an allowance given for the inflation at the beginning of the price controls. But market dynamics change, different things change, and if the impact is not material, usually the regulator do not want to open the books during the price control period and they keep it towards the end of the price control. On top of the inflation also, there might be some additional costs which are because of changes in law, which were not captured during our submission of the price control, which was three years back because they happened during the price control period.

Saif Al Hosni: If you slide the deck, okay, now. For the cost question, there is an allowance given for the inflation at the beginning of the price controls. But market dynamics change, different things change, and if the impact is not material, usually the regulator do not want to open the books during the price control period and they keep it towards the end of the price control. On top of the inflation also, there might be some additional costs which are because of changes in law, which were not captured during our submission of the price control, which was three years back because they happened during the price control period.

Speaker #4: And if the impact is not material, usually the regulator does not want to open the books during the price control period, and they keep it towards the end of the price control.

Speaker #4: On top of the inflation, also, there might be some additional costs, which are, you know, because of changes in law, which were not captured during our submission of the price control, which was three years back, because they happened after the price control, during the price control period.

Speaker #4: And if the impact is not material usually we submit all this towards the end of the price control and with the right justification and usually the regulator verify that and compensate us as a one off in the beginning of the same of the next price control period.

Sultan Al Balushi: And if the impact is not material, usually we submit all this towards the end of the price control and with the right justification. Usually the regulator verifies that and compensates us as a one-off in the beginning of the next price control period. Historically, you can see also in 2024, there were some costs related to PC2, around OMR 5.3 million, which we got compensated at the beginning of price control period 3. If you want to Okay, understood. Just to Yes, if you have any, you can go ahead.

Saif Al Hosni: And if the impact is not material, usually we submit all this towards the end of the price control and with the right justification. Usually the regulator verifies that and compensates us as a one-off in the beginning of the next price control period. Historically, you can see also in 2024, there were some costs related to PC2, around OMR 5.3 million, which we got compensated at the beginning of price control period 3. If you want to

Speaker #4: Historically, you can see also in 2024 there were some costs related to PC2, around 5.3 million Omani Riyal, which we got compensated at the beginning of Price Control Period Three.

Speaker #5: Okay, understood. And just to—yeah, if you have, you can go ahead.

Taha Al Lawati: Okay, understood.

Sultan Al Balushi: Just to

Speaker #4: So just to add to Abu Saud as you he explained when we submit to the regulator whether it's inflation in ERC or ONM or GNA we incorporate whatever inflation is associated with those categories either explicitly or implicit within our contracts and activities.

Ahmed Al Khuzairi: Yes, if you have any, you can go ahead.

Saif Al Hosni: So just to add to Abu Saud. As he explained, when we submit to the regulator, whether it is inflation in ERC or O&M or G&A, we incorporate whatever inflation is associated with those categories, either explicitly or implicit within our contracts and activities. On top of that, there is an added overall inflation as taken from the NCSI figure on top of that inflation. So usually this is how it is calculated between us and the regulator.

Mansoor Ali Al-Abda: So just to add to Abu Saud. As he explained, when we submit to the regulator, whether it is inflation in ERC or O&M or G&A, we incorporate whatever inflation is associated with those categories, either explicitly or implicit within our contracts and activities. On top of that, there is an added overall inflation as taken from the NCSI figure on top of that inflation. So usually this is how it is calculated between us and the regulator.

Speaker #4: And on top of that, there is an added overall inflation, as taken from the NCSI figure, on top of that inflation. So usually, this is how it's calculated between us and the regulator.

Speaker #5: Okay. And just to follow up on my question, as per my understanding, the OPEX allowance given by the regulator should, in theory, cover all the OPEX costs expected to be incurred within the price control period.

Taha Al Lawati: Okay. Just to follow up on my question. As per my understanding, the OpEx allowance given by the regulator should in theory cover all the OpEx costs expected to be incurred within the price control period. But what I have seen in the past quarters over the past years is that the recovery rates rarely exceed 100%. So there are rarely quarters where the efficiency from OQGN is realized with a gain. Can I just understand where the deviation comes from? Is the OpEx guidance given from the company to the regulator more than what the regulator approves of? Where does the exact deviation come from?

Speaker #5: But what I've seen in past quarters over the past years is that the recovery rates rarely exceed 100%. So, there are rarely quarters where the efficiency from OQ GN is realized with a gain.

Speaker #5: Can I just understand where the deviation comes from? Is the OPEX guidance given from the company to the regulator more than what the regulator approves of?

Speaker #5: What does the exact deviation come from?

Speaker #1: Okay.

Speaker #4: So I'll start, then Abu Saud can continue. In principle, the job of the regulator is to ensure efficiency, and rarely is the efficiency the regulator expects in line with the efficiency that the company has in mind.

Saif Al Hosni: Okay. So I will start and Abu Saud can continue. So in principle, the job of the regulator is to ensure efficiency. Rarely what efficiency the regulator expects is in line with the efficiency that the company has in mind. This is natural. All regulators in the world ask for extra efficiency just to demonstrate a top-notch performance. So in general, it is very rarely that a regulated company recovers its entire OpEx. If that was the case, then the regulator might be perceived as not doing a good job. So generally, efficiency targets are imposed on the regulated company on an annual basis, and they become more and more challenging just to ensure efficiency. This is number 1. Number 2 is that if we talk about OpEx, not all OpEx are really matters of running the business efficiently.

Mansoor Ali Al-Abda: Okay. So I will start and Abu Saud can continue. So in principle, the job of the regulator is to ensure efficiency. Rarely what efficiency the regulator expects is in line with the efficiency that the company has in mind. This is natural. All regulators in the world ask for extra efficiency just to demonstrate a top-notch performance. So in general, it is very rarely that a regulated company recovers its entire OpEx. If that was the case, then the regulator might be perceived as not doing a good job. So generally, efficiency targets are imposed on the regulated company on an annual basis, and they become more and more challenging just to ensure efficiency. This is number 1. Number 2 is that if we talk about OpEx, not all OpEx are really matters of running the business efficiently.

Speaker #4: And this is natural. All regulators in the world ask for extra efficiency just to demonstrate top-notch performance. So, in general, it is very rare that the regulated company recovers its entire OPEX.

Speaker #4: If that was the case, then the regulator might be perceived as not doing a good job. So, generally, efficiency targets are imposed on the regulated company on an annual basis, and they become more and more challenging just to ensure efficiency.

Speaker #4: This is number one. Number two is that if we talk about OPEX, not all OPEX items are really matters of running the business efficiently. Some OPEX-related items are shareholder matters.

Saif Al Hosni: Some OpEx-related items are shareholder matters that are not usually items to be recovered by the regulator.

Mansoor Ali Al-Abda: Some OpEx-related items are shareholder matters that are not usually items to be recovered by the regulator.

Speaker #4: Those are not usually items to be recovered by the regulator.

Speaker #5: Got it. Okay, that sums up all the questions I have. Thank you so much, Mohamed.

Taha Al Lawati: Got it. Okay. That sums up all the questions I have. Thank you so much for answering.

Speaker #4: Thank you, Talha. Thank you so much. So now we have another question from Shahur.

[Company Representative] (OQ Gas Networks): Thank you, Taha. Thank you so much. Now we have another question from Shaul.

Ahmed Al Khuzairi: Thank you, Taha. Thank you so much. Now we have another question from Shaul.

Speaker #1: Yes, hi. Good afternoon. Thank you for the presentation. I had a couple of questions. To begin with, this ongoing project of the 42-inch Fahood–Suhar pipeline and the DOCOM pipeline—when are these projects expected to complete?

[Analyst]: Yes. Hi. Good afternoon. Thank you for the presentation. I had a couple of questions. To begin with this ongoing project of 42-inch Fahud-Sohar pipeline and the Duqm pipeline. When are these projects expected to complete?

Speaker #4: By 2027.

Saif Al Hosni: By 2027.

Speaker #1: Right. So, okay, they will be completed within the current price control period, right?

[Analyst]: Right. So they will-

Saif Al Hosni: By the end of 2027.

[Analyst]: Okay, so they will be completed within the current price control period, right?

Speaker #4: That's the plan yes.

Speaker #1: Okay. And when you say that, out of the 294 million allowed, 63% has already been achieved, does this include these two pipelines in construction—these three projects—or does it not?

Saif Al Hosni: That is the plan, yes.

[Analyst]: Okay. When you say that out of the OMR 294 million allowed, 63% has already been achieved, does this include these two pipelines in construction, these three projects, or does it not? The 63%.

Speaker #1: The 63%.

Speaker #4: Yes, it includes whatever progress we have in these projects.

Saif Al Hosni: Yes, this includes whatever progress we have in these projects.

Sultan Al Balushi: Yes, this includes whatever progress we have in these projects.

Speaker #1: All right. All right. Thank you.

[Analyst]: All right. Thank you.

Speaker #4: Thank you, Shahur. So again, if you want to ask a question, please raise your hand, unmute your line, and you can ask the question.

[Company Representative] (OQ Gas Networks): Thank you, Shahroz. If you want to ask a question, please raise your hand, unmute your line, and you can ask the question. There is a follow-up question from Sashank.

Ahmed Al Khuzairi: Thank you, Shahroz. If you want to ask a question, please raise your hand, unmute your line, and you can ask the question. There is a follow-up question from Sashank.

Speaker #4: Yeah, there's a follow-up question from Sashnak.

Speaker #1: Yes, thank you for taking my follow-up. I just wanted some color on the plans for Oman and hydrogen. I think you know, during the IPO, the plans were quite active and the market obviously was more, I guess, optimistic.

[Analyst] (BofA Global Research): Yes. Thank you for taking my follow-up. I just wanted some color on the plans for Oman and hydrogen. I think during the IPO, the plans were quite active, and the market obviously was more, I guess, optimistic. Given some of the developments we have seen over the last couple of years, I just wanted to get a sense of how management sees this market evolving. Thank you.

Sashank Lanka: Yes. Thank you for taking my follow-up. I just wanted some color on the plans for Oman and hydrogen. I think during the IPO, the plans were quite active, and the market obviously was more, I guess, optimistic. Given some of the developments we have seen over the last couple of years, I just wanted to get a sense of how management sees this market evolving. Thank you.

Speaker #1: So, given some of the developments we've seen over the last couple of years, I just wanted to get a sense of how our management sees this market evolving.

Speaker #1: Thank you.

Speaker #4: Thanks for the question. So, indeed, Oman—and in fact, the entire world—is experiencing a slowdown when it comes to the hydrogen economy and hydrogen market.

Saif Al Hosni: Thanks for the question. Indeed, Oman and, in fact, the entire world is experiencing a slowdown when it comes to the hydrogen economy and hydrogen market. The reasons are market-driven due to political situations. Reliance on the well-known resources is still very high. Nevertheless, what we are experiencing in Oman, the plans are still in place, but they are becoming more realistic. When it comes into the issue of dates of executing projects, the volumes projected, they are not canceled, but they are more realistic. There is some sort of downsizing to these projects. The bottom line is that OQGN continues to be prepared that whenever this market picks up, we have the mandate of being the transporter. Our plans are in place, our conceptual designs are there, and we remain ready to support this sector whenever it picks up globally and in Oman specifically.

Speaker #4: The reasons are, you know, market-driven due to political situations. Reliance on the well-known energy resources is still very high. Nevertheless, what we're experiencing in Oman is that the plans are still in place, but they are becoming more realistic.

Speaker #4: So, when it comes to the issue of the dates of executing projects, the volumes projected are not canceled, but they're more realistic.

Speaker #4: So, there is some sort of downsizing to these projects. The bottom line is that OQ GN continues to be prepared. Whenever this market picks up, we have the mandate, have been the transporter, our plans are in place, our conceptual designs are there, and we remain ready to support this sector whenever it picks up globally, and in Oman specifically.

Speaker #1: All right. Thank you very much for that.

[Analyst] (BofA Global Research): All right. Thank you very much for that.

Sashank Lanka: All right. Thank you very much for that.

Speaker #4: Thank you. If there are any more questions or follow-up questions, please raise your hand, unmute your line, and ask the question. It seems that there are no more questions, so—yes, we have a follow-up question coming from Talha.

[Company Representative] (OQ Gas Networks): Thank you. Any more questions or follow-up questions, please raise your hand, unmute your line, and ask the question. It seems that there are no more questions. Yes, we have a follow-up question coming from Taha.

Ahmed Al Khuzairi: Thank you. Any more questions or follow-up questions, please raise your hand, unmute your line, and ask the question. It seems that there are no more questions. Yes, we have a follow-up question coming from Taha.

Speaker #5: Yeah, apologies for that, but thank you for taking my follow-up question. I just wanted to understand one thing: what would be the events that would require the construction of additional compressor stations or gas supply stations?

Taha Al Lawati: Yeah, apologies for that. Thank you for taking my follow-up question. I just wanted to understand one thing. What would be the events that would require the construction of additional compressor stations or gas supply stations?

Speaker #4: Gas compressor stations are usually used to boost the pressure or to enhance the pressure of the system. So, we usually install them in the long backbone pipelines across the country just to deliver more gas.

Saif Al Hosni: Gas compressor stations are usually used to boost the pressure or to enhance the pressure of the system. So we usually install it in the long backbone pipelines cross country, just to deliver more gas. This is usually when you need a compressor station. We currently have three major compressor stations in Oman, and based on the upcoming demand, we don't see any need for expanding these compressor stations. Gas supply stations are used for the opposite. Basically, they convert high pressure to low pressure, and they condition the gas to meet the specs of the end customer. So you usually find it in Madayn. You usually find it in clusters where industries are existing, like Salalah cluster, Petro cluster, Sur, Sohar, and et cetera.

Speaker #4: So this is usually when you need a compressor station. We currently have three major compressor stations in Oman, and based on the upcoming demand, we don't see any need for expanding these compressor stations.

Speaker #4: Gas supply stations are used for the opposite. So, basically, they convert high pressure to low pressure and they condition the gas to meet the specifications of the end customer.

Speaker #4: So you usually find it in Madayan. You usually find it in clusters where industries are existing, like Salalah cluster, central cluster, Suhar, and so on.

Speaker #5: Great. And would the costs of those compressor stations and gas supply stations be reimbursed under the RABA group? It's not reimbursed; rather, it will be added as part of our concession assets and we'll get an income on it.

Taha Al Lawati: Great. Would the cost of those compressor stations and gas supply stations be reimbursed under the RAB?

Saif Al Hosni: Yes. It is not reimbursed, more it will be added part of our concession asset and we will get an income on it.

Speaker #5: So they're added—yeah, they're added to the asset base, and we get a return, or margin, on them. Okay. Thank you so much.

Taha Al Lawati: Yes.

Saif Al Hosni: They are added to the asset base, and we get a return or a margin on them.

Taha Al Lawati: Okay. Thank you so much.

Speaker #4: Thank you, Talha. It seems that we don't have any further questions, so we would like to thank you all for joining us today on this call. We would also like to refer you to our public filings on our website or at MSX.

[Company Representative] (OQ Gas Networks): Thank you, Taha. It seems that we do not have any further questions, so we would like to thank you all for joining us today on this call, and we would like also to refer you to our public filing in our website or at Muscat Stock Exchange. Have a nice day.

Ahmed Al Khuzairi: Thank you, Taha. It seems that we do not have any further questions, so we would like to thank you all for joining us today on this call, and we would like also to refer you to our public filing in our website or at Muscat Stock Exchange. Have a nice day.

Speaker #4: Have a nice day. Thank you.

Saif Al Hosni: Thank you.

[Company Representative] (OQ Gas Networks): Thank you.

Ahmed Al Khuzairi: Thank you.

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