Q2 2026 Riyadh Cables Group Co Earnings Call

August 4, 2026

Speaker #1: This is Hashim Al-Haddad from Al-Rajhi Capital, and I'll be hosting the Q2 2026 earnings call for Riyadh Cables Group. We are joined today by the CEO, Mr. Qoryan; the CFO, Mr. Baha; and the CSO, Mr. Rahman.

Hashem Al Haddad: This is Hashem Al Haddad from Rajhi Capital, I'll be hosting the Q2 2026 earnings call for Riyadh Cables Group. We are joined today by the CEO, Mr. Borjan, the CFO, Mr. Baha, and the CSO, Mr. Muath. Thank you all for joining, without any further delay, I'll pass the mic over to Mr. Borjan to start the earnings session.

Hashem Al Haddad: This is Hashem Al Haddad from Rajhi Capital, I'll be hosting the Q2 2026 earnings call for Riyadh Cables Group. We are joined today by the CEO, Mr. Borjan, the CFO, Mr. Baha, and the CSO, Mr. Mouaaz. Thank you all for joining, without any further delay, I'll pass the mic over to Mr. Borjan to start the earnings session.

Speaker #1: Thank you all for joining, and without any further delay, I'll pass the mic over to Mr. Qoryan to start the earnings session.

[Company Representative] (Riyadh Cables Group): Thank you, Hashem. Ladies and gentlemen, thank you for attending Riyadh Cables' H126 earnings call. Today, we will provide a quick overview of the company, we will talk about the company's performance during H1 2026. Next, we will review the financials for the same period, afterwards, we will provide a reflection on the current regional situation. Lastly, we will discuss the management's outlook and the way forward. I'll leave it now to Mr. Borjan. CEO.

Mouaaz Alyounes: Thank you, Hashem. Ladies and gentlemen, thank you for attending Riyadh Cables' H126 earnings call. Today, we will provide a quick overview of the company, we will talk about the company's performance during H1 2026. Next, we will review the financials for the same period, afterwards, we will provide a reflection on the current regional situation. Lastly, we will discuss the management's outlook and the way forward. I'll leave it now to Mr. Borjan. CEO.

Speaker #2: Thank you, Hashim. Ladies and gentlemen, thank you for attending the Riyadh Cables H1 2026 earnings call. Today, we will provide a quick overview of the company, then we will talk about the company's performance during the first six months of 2026.

Speaker #2: Next, we will review the financials for the same period, and afterwards, we will provide a reflection on the current regional situation. Lastly, we will discuss management's outlook and the way forward.

Speaker #2: I'll leave it now to Qoryan, CEO.

Speaker #3: Thank you, Muaz. Good afternoon, ladies and gentlemen, and welcome to Riyadh Cables' earnings call for the first six months of 2026. As always, for your background, I just want to remind you that RCG has been the largest regional player in the wires and cables industry for more than 40 years.

Borjan Sehovac: Thank you, Muath. Good afternoon, ladies and gentlemen, welcome to Riyadh Cables earnings call for H1 2026. As always, for your background, I just always want to remind you that RCG is the largest regional player in the wires and cables industry since more than 40 years. We manufacture and supply all types of the cables used in generation, transmission. I repeat, transmission are overhead lines, high voltage and extra high voltage cables. Distribution, which are represented by medium voltage and low voltage cables. Then we have end user low voltage and wires. We manufacture also fiber optical cables used in data transmission.

Borjan Sehovac: Thank you, Mouaaz. Good afternoon, ladies and gentlemen, welcome to Riyadh Cables earnings call for H1 2026. As always, for your background, I just always want to remind you that RCG is the largest regional player in the wires and cables industry since more than 40 years. We manufacture and supply all types of the cables used in generation, transmission. I repeat, transmission are overhead lines, high voltage and extra high voltage cables. Distribution, which are represented by medium voltage and low voltage cables. Then we have end user low voltage and wires. We manufacture also fiber optical cables used in data transmission.

Speaker #3: We manufacture and supply all types of cables. Using generation, transmission—I repeat, transmission—are overhead lines, high-voltage, and extra-high-voltage cables. Distribution, which I represent by medium-voltage and low-voltage cables, and then we have end-user low-voltage and wires.

Speaker #3: We also manufacture fiber optical cables used in data transmission. So, we are able to produce any type of cable needed in the market using our center of excellence plants located in Riyadh.

Borjan Sehovac: We are able to produce any type of cable needed in the market using our center of excellence plants located in Riyadh, without forgetting to mention our plants in Sharjah, UAE, Baghdad, Iraq, and newly added plants in Tashkent, Uzbekistan, and Damascus, Syria. Moving to the financial performance highlights. It has been a very challenging quarter. Actually, it has been a very challenging H1, to tell you the truth. We faced, we are still facing, raw material shortage of 700 to the strengths and the

Speaker #3: Without forgetting to mention our plants in Sharjah, UAE; Baghdad, Iraq; and the newly added plants in Tashkent, Uzbekistan, and Damascus, Syria. Moving to the financial performance highlights, it has been a very challenging quarter.

Speaker #3: Actually, it has been a very challenging first half, to tell you the truth. We faced—and we are still facing—raw material shortages of 700 to the strengths and the initially produced.

[Company Representative] (Riyadh Cables Group): Initially, we'll be able-

Mouaaz Alyounes: Initially, we'll be able-

Hashem Al Haddad: Mr. Borjan, you are not audible. We are not able to hear you.

Speaker #1: Mr. Qoryan, you are not audible. We are not able to hear you.

Speaker #3: Hashim, can you hear me? Hello?

Borjan Sehovac: Can you hear me? Hello?

Speaker #1: Now it's audible. Yeah, now it's audible. Your voice went down again.

Hashem Al Haddad: Now it's audible. Yeah, now it's audible. Your voice went down again.

Borjan Sehovac: Hi Mr. Hashem, do you?

Speaker #3: The Mr. Hashim, do you

[Company Representative] (Riyadh Cables Group): No.

Mouaaz Alyounes: No.

Hashem Al Haddad: Still the same issue.

Speaker #1: still the same issue?

[Company Representative] (Riyadh Cables Group): There is some issue with the audio.

Mouaaz Alyounes: There is some issue with the audio.

Speaker #3: There is some issue with the connection. I apologize for this. I don't know. These are typical. Mr. Hashim, do you hear me now?

Borjan Sehovac: I apologize for this. I don't know. These are TP, Mr. Hashem, do you hear me now?

Speaker #1: Ask him to rejoin. Yeah, you are audible right now.

Hashem Al Haddad: Yeah, you are audible right now.

Speaker #3: I really apologize. Of course, we'll be extending this earnings call for 10 or 15 more minutes. Now, we have changed the system, and I hope everything will go properly.

Borjan Sehovac: I really apologize. Of course, we'll be extending this earning call for 10, 15 more minutes. Now we have changed the system, and I hope everything will go properly. I will repeat again, probably, just to be clear. It has been really challenging quarter, one of the most challenging, surely, in the last years for Riyadh Cables Group. Overall, six months have been a huge challenge because in the end, as all the industry is doing as well, we are facing raw material shortages, supply chain disruptions, logistics delays, cost increases in materials and transportation. Yet, despite, I believe, one of the most challenging six months for the overall region, we have been able to deliver record revenues of almost SAR 5.7 billion, record volumes of 138,000 tons, despite the split 50/50 between copper and aluminum, as we will be seeing later.

Speaker #3: So, I will repeat again, probably just to be clear: it has been a really challenging quarter—one of the most challenging, surely, in the last years for Riyadh Cables Group.

Speaker #3: And overall, 6 months have been a huge challenge. Because in the end, as all the industry is doing, as well, we are facing raw material shortages, supply chain disruptions, logistics delays, cost increases, in materials and transportation.

Speaker #3: But yet, despite—I believe—one of the most challenging 6 months for the overall region, we have been able to deliver record revenues of almost 5.7 billion riyals.

Speaker #3: Record volumes of 138,000 tons, despite the split being 50/50 between copper and aluminum, as we will see later. We have also delivered a record-high EBITDA of 721 million.

Borjan Sehovac: We have delivered as well a record high EBITDA of SAR 721 million, and one of the most important KPI, of course, record high net profit of SAR 590 million, a 10% increase versus the previous year. In addition to all of this, we have been able to generate an excellent free cash flow of SAR 77 million, representing an increase of 27% compared to previous year. Ladies and gentlemen, this performance really demonstrates the strength and the resilience of our business model. Our diversified geographic presence, complete cable portfolio that it is unique only to RCG, and most importantly, our ability, and let me add as well, our agility to redirect the production towards other customers, other markets as well, for product segments. Maintain always high utilization to protect as well good efficiency and to protect the profitability.

Speaker #3: And one of the most important KPIs, of course, is our record-high net profit of 590 million SAR—a 10% increase versus the previous year. In addition to all of this, we have been able to generate excellent free cash flow of 77 million SAR, representing an increase of 27% compared to the previous year.

Speaker #3: So, ladies and gentlemen, this performance really demonstrates the strengths and the resilience of our business model. Our diversified geographic presence, complete cable portfolio that it is unique only to RCG, and most importantly, our ability—and let me add as well—our agility to redirect the production towards other customers, other markets as well, or product segments—and maintain always high utilization to protect as well good efficiency and to protect the profitability.

Speaker #3: Gross profit per ton remained at a very healthy level, 6,300 riyals per ton—more or less the same as the previous period and the full year ended 2025.

Borjan Sehovac: Gross profit per ton remained at a very healthy level, SAR 6,300 per ton, more or less the same as the previous period and the full year previous 2025. Despite we had higher material and logistic cost, as I mentioned before, this reflects really a disciplined pricing and very good operational and sales execution. Although backlog volumes are lower than last year, last year was really the H1 was a record on the backlog volumes. The value of our backlog is increased compared even to the last year, which was SAR 5.7 billion and compared to the SAR 5.5 billion of the previous quarter. Don't get me wrong. Looking ahead, we remain extremely cautious because of geopolitical uncertainties are continuing to affect supply chain, and we do not expect that the operating environment will become easier in the Q3. The problems are still there.

Speaker #3: Despite having higher material and logistics costs, as I mentioned before, this really reflects disciplined pricing and very good operational and sales execution.

Speaker #3: Although backlog volumes are lower than last year, last year really the first half was a record on the backlog volumes. But the value of our backlog has increased compared even to last year, which was $5.7 billion, and compared to the $5.5 billion of the previous quarter.

Speaker #3: Don't get me wrong, looking ahead, we remain extremely cautious because geopolitical uncertainties are continuing to affect supply chain, and we do not expect that the operating environment will become easier in the third quarter.

Speaker #3: The problems are still there. Maybe some deliveries can shift to the month after, or to the next quarter, but really, rest assured that we keep working focused to continue executing our backlog while managing any possible delays, as we have done. Usually, and mainly, delays are mainly due to logistics and supply chain issues.

Borjan Sehovac: Really rest assured that we keep working focused to continue executing our backlog while managing any possible delays as we have done, which usually, delays are mainly due to logistics and supply chain issues. Moving to the next slide. Showing the key performance drivers, we can see that the sales volume has increased 4%, which we consider a very solid performance given the current geopolitical environment. Let me add, also, we had continuously faced a slowdown of national utility, as we have mentioned the Q1. This continues well in the Q2. A slowdown of utility which has affected us for the full H1. In the next point, we can see that solid demand driven revenue, which increased by 9%.

Speaker #3: Moving to the next slide, showing the key performance drivers, we can see that the sales volume has increased by 4%, which we consider a very solid performance given the current geopolitical environment.

Speaker #3: And let me add also, we have continuously faced a slowdown of national utility, as we mentioned in the first quarter. This continued as well in the second quarter, so a slowdown of utility, which has affected us for the full 6 months.

Speaker #3: In the next point, we can see that solid demand-driven revenue increased by 9%. This is due to both the volume increase and metal price increases as well.

Borjan Sehovac: This is both due to the volume increase and as well metal price increases as well. Gross profit per ton remained at a very healthy level, in line, as I said, with the Q1 2026 and the full year 2025. Our pricing strategy, once again, remains the key success of our company, especially now when we experience all the cost increases and possible disruption as well in the region. Net profit increased by 10%, let me say that Q2 was even more challenging than the Q1, and yet we were able to deliver the same growth of 10%. Free cash flow at SAR 77 million. As you know, we are always very much focused on generating cash and having a good cash conversion. Moving to the slide number 10. Despite the challenging operational environment, demand for our products remained resilient across most of our markets.

Speaker #3: Gross profit per ton remained at a very healthy level, in line, as I said, with Q1 2026 and the full year 2025. Our pricing strategy, once again, remains the key to the success of our company, especially now when we experience all the cost increases and possible disruption as well in the region.

Speaker #3: Net profit increased by 10%, and let me say that the second quarter was even more challenging than the first quarter, yet we were able to deliver the same growth of 10%.

Speaker #3: Free cash flow is at 77 million. As you know, we are always very much focused on generating cash and having a good cash conversion. Moving to slide number 10.

Speaker #3: Despite the challenging operational environment, demand for our products remained resilient across most of our markets. This has enabled us to deliver another record quarter, with Q2 revenues exceeding $2.9 billion, and first-half revenues reaching $5.7 billion.

Borjan Sehovac: This as well enabled us to deliver another record quarter, with the Q2 revenues exceeding SAR 2.9 billion, and the H1, SAR 5.7 billion. Sales volumes also continued to grow, which demonstrates not only the healthy demand that we have seen in our markets, but also the strength of our product mix and disciplined commercial execution. As mentioned, the demand remains quite solid, both domestic and export. However, this was more than offset by strong performance in other segments and other geographies. I want to repeat again that we did not face any contract cancellation, still we are very cautious about the situation. As it happened already, some delay could occur, which will be recoverable in the coming months.

Speaker #3: Sales volumes also continued to grow, which demonstrates not only the healthy demand that we have seen in our markets, but also the strength of our product mix and disciplined commercial execution.

Speaker #3: As mentioned, the demand remains quite solid, both domestic and export. The only area where we experienced a drop was the utility sector; however, this was more than offset by strong performance in other segments and other geographies.

Speaker #3: I want to repeat again that we did not face any contract cancellations, but still, we are very cautious about the situation. As it happened already, some delays could occur, which will be recovered in the coming months.

Speaker #3: The rule of the game is always to divert our sales and products to the customers where we can serve more, in a more—let's say—accelerated way.

Borjan Sehovac: The rule of the game is always to divert our sales products to the customers where we can serve more in a, let's say, an accelerated way in order to cover any possible delays. This is also, as I mentioned at the beginning, one of the first time that we have a 50/50 split of our volume between 50% copper and 50% aluminum. Let me highlight one important thing here, that we have delivered record high volume of 138,000 tons, but with 50% of it being aluminum. Knowing that aluminum is three times lighter than copper, you can imagine how this achievement is significant. In fact, last year, the H1, we have delivered 133,000 tons, but the split was in favor of copper, which was 55%. I also want to mention that almost 40% of our revenue has been generated outside KSA.

Speaker #3: In order to cover any possible delays. This is also, as I mentioned at the beginning, one of the first times that we have a 50/50 split of our volume between 50% copper and 50% aluminum.

Speaker #3: And let me highlight one important thing here: we have delivered a record-high volume of 138,000 tons, with 50% of it being aluminum.

Speaker #3: And knowing that aluminum is three times lighter than copper, you can imagine how significant this achievement is. In fact, last year, in the first half, we delivered 133,000 tons. But for copper, the split was in favor of copper, which was 55%.

Speaker #3: I also want to mention that almost 40% of our revenue has been generated outside KSA, again highlighting the importance of diversified market geographies, which is one of our major strategic points.

Borjan Sehovac: Again, highlighting the importance of diversified market geographies, which is one of our major strategic points. Moving to the next slide. As I always like to mention, one of the strongest indicator of the health of our business is our order backlog and the capacity utilization. Of course, in normal geopolitical circumstances. Despite delivering record revenues during the H1, we closed the period with a confirmed order backlog of SAR 5.8 billion, equivalent to 134,000 tons. The backlog in volume is slightly lower compared to previous period, also due to product mix. Important to highlight that letter of intent and tenders and offerings values to our customers are quite also at the good and high level. All the indicator for the future, let's say, pending, of course, the geopolitical situation, are still very healthy.

Speaker #3: Moving to the next slide. As I always like to mention, one of the strongest indicators of the health of our business is our order backlog and the capacity utilization.

Speaker #3: Of course, in normal geopolitical circumstances. Despite delivering record revenues during the first half, we closed the period with a confirmed order backlog of $5.8 billion, equivalent to 134,000 tons.

Speaker #3: The backlog in volume is slightly lower compared to the previous period, also due to the product mix. But it's important to highlight that letters of intent, tenders, and offerings' values to our customers are also at a good and high level.

Speaker #3: So all the indicator for the future, let's say pending of course the geographic geopolitical situation, are still very healthy. Worth to mention that strong backlog and proactive planning helped to mitigate helped us a lot, as well, to mitigate supply chain risk associated to the current environment.

Borjan Sehovac: Worth to mention that strong backlog and the proactive planning helped us a lot as well to mitigate supply chain risk associated to the current environment. This strong demand keep our utilization at the rate of a very high level of 95%, which, always important to highlight, brings very good operational efficiencies. The strong saturation utilization is also a result of our discipline, the production planning, and the flexibility. This is the key point. Our flexibility of manufacturing footprint to satisfy any changes in possible commercial channels due to delays in supply chain. Now I hand it over to Baha for more financial highlights. Thank you very much.

Speaker #3: This strong demand keeps our utilization at a very high level of 95%, which, as always, is important to highlight and brings very good operational efficiency.

Speaker #3: The strong saturation utilization is also a result of our disciplined production planning and flexibility. This is the key point—our flexibility in the manufacturing footprint allows us to satisfy any changes in possible commercial channels due to delays in the supply chain.

Speaker #3: Now I'll hand it over to Bahar for more financial highlights. Thank you very much. Thank you, Marius. Good afternoon, everyone. Building upon what we've stated, in Q2 2026, gross profit increased by 2% over the previous quarter of 2026 to 439 million.

Baha Eissa: Thank you, Maurizio. Good afternoon, everyone. Building up on what Maurizio stated. Q2 2026, gross profit increased by 2% over the previous Q1 2026 to SAR 439 million. This was due to the growth in sales and volume. This increase in sales was achieved in spite the ongoing war in the region and the uncertainty that has been created. If we look at the H1 2025 versus 2026, gross profit stayed static due to the product mix. As mentioned earlier, we had a 50/50 split between copper and aluminum, and partially by the war effect. Looking at our EBITDA, we had good results. H1 2026 grew by 10% over the same period of last year to SAR 721 million. This was driven mainly by higher revenues, and to a lesser extent, by less ECL provisions for the period compared to 2025.

Speaker #3: This was due to the growth in sales and volume. This increase in sales was achieved in spite of the ongoing war in the region and the uncertainty that has been created.

Speaker #3: If we look at the half year of 2025 versus 2026, gross profit stayed static due to the product mix. As mentioned earlier, we had a 50/50 split between copper and aluminum, and this was also partially impacted by the war effect.

Speaker #3: Looking at our EBITDA, we had good results. Actual 2026 grew by 10% over the same period of last year to SAR 721 million.

Speaker #3: This was driven mainly by higher revenues and, to a lesser extent, by lower ACL provisions for the period compared to 2025. If we look at the first quarter of 2026 compared to the second quarter of 2026, we also improved EBITDA during this period by 4%, to 368.

Baha Eissa: If we look at the Q1 2026 compared to the Q2 2025, we did also improve EBITDA during this period by 4% to SAR 368 million. Again, this was attributed to lesser ECL resulting from better collections on all the receivables that we've had. Looking at the cash flow. Despite the increase in inventory and receivable during this period, the group was able to improve its free cash flow from SAR -19 million in Q1 to SAR +77 million. Operating cash flow improved to SAR 215 million from SAR 142 million in H1 2025, an increase of 51%. This was done through increased suppliers' credit and healthy profits being achieved by the company. Again, the group is true to its promise of funding its operation, including CapEx, which was at SAR 110 million in H1 from its own internal sources.

Speaker #3: And again, this was attributed to a lesser ACL, resulting from better collections on old receivables that we've had. Looking at the cash flow, despite the increase in inventory and receivables during this period, the group was able to improve its free cash flow from negative SAR 19 million in Q1 to positive SAR 77 million.

Speaker #3: And operating cash flow improved to 215 million from 142 million in H1 25, an increase of 51%. This was achieved through increased suppliers’ credit and healthy profits being achieved by the company.

Speaker #3: Again, the group is true to its promise of funding its operations, including capex, which was at SAR 110 million in H1, from its own internal sources.

Speaker #3: Going to the dividends issued, the group continues its policy of paying out dividends, with declared 2025 profits or dividends of SAR 636 million, of which the last portion payment was made during June of this year.

Baha Eissa: Going to the dividends issue, the group continues its policy of paying out dividends with declared 2025 profits of dividends of SAR 636 million, of which the last portion payment was made during June of this year. Now looking at hitting pricing and profitability per ton. While gross profit per ton for copper in H1 2026 was up by 4% to SAR 742 due to the product mix and efficiencies, aluminum gross profits dropped by 6% to SAR 5,141. This was due to change in customer base, geographical markets, and accordingly, product line type, in addition to a slowdown in the local utility sector. This slightly reduced the overall gross profit by a mere 1% to SAR 6,308.

Speaker #3: Now, looking at hedging, pricing, and profitability per ton: while gross profit per ton for copper in H1 2026 was up by 4% to SAR 742, due to the product mix and efficiencies, aluminum gross profits dropped by 6% to SAR 540, from SAR 576.

Speaker #3: This was due to a change in customer base, geographical markets, and accordingly, product line type, in addition to a slowdown in the local utility sector. This slightly reduced the overall gross profit by a mere 1% to SAR 6,308.

Speaker #3: Despite the geopolitical volatility in the region and the challenges that it presents, the Group was able to maintain a healthy and stable gross profit per ton, around 6,300 Riyal, in line with the previous period.

Baha Eissa: Despite the geopolitical volatility in the region and the challenges that it presents, the group was able to maintain a healthy and stable gross profit per ton around SAR 6,300, in line with the previous period. With that, I now turn it over to Muz.

Speaker #3: With that, I now turn it over to Miles.

Speaker #2: Thank you, Bahar. As stated earlier by Borian and Bahar, while the regional situation affected logistics, procurement lead times, and working capital requirements, the group successfully contained the financial and operational impact during the first half.

[Company Representative] (Riyadh Cables Group): Thank you, Bahaa. As stated earlier by Borjan and Bahaa, while the regional situation affected logistics, procurement lead times, and working capital requirements, the group successfully contained the financial and operational impact during H1. Though the demand environment continued to be healthy overall, the execution environment experienced some difficulties, resulting in slight financial consequences, merely manifested in higher working capital and logistical costs rather than lost demand. Export performance remained resilient at the group level, although the impact varied across markets. The Iraqi market experienced slowdowns, shipment delays, and logistical constraints while demand and execution in the GCC and international markets helped offset these effects. Management took proactive measures to protect continuity, including supplier diversification, alternative logistics routes, strategic raw material inventories, and customer order prioritization. These actions supported production and delivery but increased overall costs during the period. Can you hear us?

Mouaaz Alyounes: Thank you, Bahaa. As stated earlier by Borjan and Bahaa, while the regional situation affected logistics, procurement lead times, and working capital requirements, the group successfully contained the financial and operational impact during H1. Though the demand environment continued to be healthy overall, the execution environment experienced some difficulties, resulting in slight financial consequences, merely manifested in higher working capital and logistical costs rather than lost demand. Export performance remained resilient at the group level, although the impact varied across markets. The Iraqi market experienced slowdowns, shipment delays, and logistical constraints while demand and execution in the GCC and international markets helped offset these effects. Management took proactive measures to protect continuity, including supplier diversification, alternative logistics routes, strategic raw material inventories, and customer order prioritization. These actions supported production and delivery but increased overall costs during the period. Can you hear us?

Speaker #2: Though the demand environment continued to be healthy overall, the execution environment experienced some difficulties, resulting in slight financial consequences, which merely manifested in higher working capital and logistical costs rather than lost demand.

Speaker #2: Export performance maintained resilience or export performance remained resilient at the group level, although the impact varied across markets. The Iraqi market experienced slowdowns, shipment delays, and logistical constraints, while demand and execution in the GCC and international markets helped offset these effects.

Speaker #2: Management took proactive measures to protect continuity, including supplier diversification, alternative logistics routes, strategic raw material inventories, and customer order prioritization. These actions supported production and delivery but increased overall costs during the period.

Speaker #3: Can you hear us?

Speaker #4: Hello.

Baha Eissa: Hello?

Speaker #1: Yeah, your audio.

Hashem Al Haddad: Yeah, you are audible.

Speaker #4: You can.

Speaker #2: Management took proactive measures to protect continuity, including supplier diversification, alternative logistics routing, strategic raw material inventories, and customer order prioritization. These actions supported production and delivery but increased overall costs during the period.

Baha Eissa: Okay.

[Company Representative] (Riyadh Cables Group): Great. Management took proactive measures to protect continuity, including supplier diversification, alternative logistics routing, strategic raw material inventories, and customer order prioritization. These actions supported production and delivery but increased overall costs during the period. We experienced no material contract cancellations during H1. Nevertheless, we continue to monitor delivery schedules, procurement lead times, operating costs, and collections closely, given that regional conditions remain fluid. Accordingly, management assesses the current risk level as elevated but manageable, supported by resilient demand, operational flexibility, a diversified supply base, and the group's strong market and financial position. RCG continues to operate from a position of strength, supported by solid backlog, heavy tendering and quotation pipeline, high utilization, disciplined pricing, and conservative financial positions. We remain cautious in the near term but confident in the underlying long-term demand across Saudi Arabia and the wider region. Over to you, Borjan.

Mouaaz Alyounes: Great. Management took proactive measures to protect continuity, including supplier diversification, alternative logistics routing, strategic raw material inventories, and customer order prioritization. These actions supported production and delivery but increased overall costs during the period. We experienced no material contract cancellations during H1. Nevertheless, we continue to monitor delivery schedules, procurement lead times, operating costs, and collections closely, given that regional conditions remain fluid. Accordingly, management assesses the current risk level as elevated but manageable, supported by resilient demand, operational flexibility, a diversified supply base, and the group's strong market and financial position. RCG continues to operate from a position of strength, supported by solid backlog, heavy tendering and quotation pipeline, high utilization, disciplined pricing, and conservative financial positions. We remain cautious in the near term but confident in the underlying long-term demand across Saudi Arabia and the wider region. Over to you, Borjan.

Speaker #2: We experienced no material contract cancellations during H1. Nevertheless, we continue to monitor delivery schedules, procurement lead times, operating costs, and collections closely, given that regional conditions remain fluid.

Speaker #2: Accordingly, management assesses the current risk level as elevated but manageable, supported by resilient demand, operational flexibility, a diversified supply base, and the Group's strong market and financial position.

Speaker #2: RCG continues to operate from a position of strength, supported by solid backlog, a heavy tendering and quotation pipeline, high utilization, disciplined pricing, and a conservative financial position.

Speaker #2: We remain cautious in the near term, but confident in the underlying long-term demand across Saudi Arabia and the wider region. Over to you, Borian.

Speaker #4: Thank you. Thank you, Miles. Let me conclude with the 2026 outlook. For the remainder of the year, while we remain very cautious of the geopolitical situation and its impact on the supply chain and regional markets.

Borjan Sehovac: Thank you. Thank you, Muz. Let me conclude with the 2026 outlook for the remainder of the year. While we remain very conscious of the geopolitical situation and its impact on the supply chain regional markets, as I mentioned before, I'm pleased to confirm that our guidance for the full year is confirmed up to 10% increase of net profit. Of course, assuming that there is no material deterioration of the current operating environment. Based on the strong H1 performance and the visibility provided by our order book, I believe we continue to expect full year net profit growth up to this 10% while maintaining our planned CapEx in the range of SAR 250 million, which is necessary to support our growth and strategic initiatives. At the same time, with the good level of cash generation, we remain committed delivering, which I believe very attractive and sustainable dividends payout.

Speaker #4: As I mentioned before, I'm pleased to confirm that our guidance for the full year is reaffirmed, with up to a 10% increase in net profit. Of course, this assumes that there is no material deterioration in the current operating environment.

Speaker #4: Based on the strong first-half performance and the visibility provided by our order book, I believe we can continue to expect full-year net profit growth of up to 10%, while maintaining our planned capex in the range of SAR 250 million, which is necessary to support our growth and strategic initiatives.

Speaker #4: At the same time, with the good level of cash generation, we remain committed to delivering what I believe are very attractive and sustainable dividend payouts. Our confidence is supported by a few important pillars: a strong backlog, which is providing excellent revenue visibility for the coming quarters; good market fundamentals, because investments are continuing in the power infrastructure grid expansion and interconnections; solar projects are ongoing; data center; commercial development, etc.

Borjan Sehovac: Our confidence is supported by a few important pillars. Strong backlog, which is providing excellent revenue visibility for the coming quarters. Good market fundamentals, because investments are continuing in the power infrastructure, grid expansion and interconnections, solar projects are ongoing, data center, commercial development, et cetera. We have as well a unique premium and diversified product portfolio, which is coupled with growing non KSA revenues. Finally, our confidence is supported as well by a very high capacity utilization, reflecting both strong customer demand and the efficiency of our manufacturing operation. Of course, we recognize that geopolitical uncertainties and supply chain challenges are surely to remain with us during the H2 of the year, especially during the Q3. Our focus is unchanged: disciplined execution, resilient supply chain management, operational excellence, and very important, continued expansion into export markets. This is the end of our management presentation.

Speaker #4: We also have a unique, premium, and diversified product portfolio, which is coupled with growing non-KSA revenues. Finally, our confidence is supported as well by a very high capacity utilization, reflecting both strong customer demand and the efficiency of our manufacturing operations.

Speaker #4: Of course, we recognize that geopolitical uncertainties and supply chain challenges are likely to remain with us during the second half of the year, especially during the third quarter.

Speaker #4: But our focus is unchanged: disciplined execution, resilient supply chain management, operational excellence, and, very importantly, continued expansion into export markets. This is the end of our management presentation.

Speaker #4: I believe we can now start the Q&A session. Thank you.

Borjan Sehovac: I believe we can now start the Q&A session. Thank you.

Speaker #1: Thank you, management. Thank you, Borian, and Bahar, as well as Mr. Miles, for the comprehensive presentation. Now, it's time for the Q&A session. But before we begin, let me just remind you that you may ask your questions either by raising your hand or typing your questions in the Q&A chat box.

Hashem Al Haddad: Thank you, management. Thank you, Florian and Baha, as well as Mr. Maj for the comprehensive presentation. It's time for the Q&A session. Before we begin, let me just remind you that you may ask your questions either by raising your hand or typing your questions in the Q&A chat box. Our first question comes from the line of Nour. Please go ahead. You are unmuted.

Speaker #1: Our first question comes from the line of Noor. Please go ahead. You are unmuted.

Speaker #5: Yes, thank you so much for the call, and congrats on a strong set of results, despite the challenging supply chain environment. So, a couple of questions from me, if I may.

[Analyst]: Yes. Thank you so much for the call, and congrats for a strong set of results despite the challenging supply chain environment. A couple of questions for me, if I may. Better take it one by one. My first one on the increased cost per ton for procuring your raw materials, potentially from Jeddah. Can you please quantify the impact on Q2 and what should we expect for Q3? Have you incorporated this increased cost into the pricing for H2 of 2026?

Nour Eldin: Yes. Thank you so much for the call, and congrats for a strong set of results despite the challenging supply chain environment. A couple of questions for me, if I may. Better take it one by one. My first one on the increased cost per ton for procuring your raw materials, potentially from Jeddah. Can you please quantify the impact on Q2 and what should we expect for Q3? Have you incorporated this increased cost into the pricing for H2 of 2026?

Speaker #5: Better to take it one by one. My first question is about the increased cost per ton for procuring your raw materials, potentially from Jeddah. Can you please quantify the impact on Q2, and what should we expect for Q3?

Speaker #5: Have you incorporated this increased cost into the pricing for the second half of 2026?

Speaker #4: Thank you. Thank you, Noor, for this question—very important question. We have taken a very proactive approach since the beginning of this year. So, since the beginning of this year, we have increased all the costs in the system because we were expecting this increase would come, and in reality, it happened in the end.

Borjan Sehovac: Thank you, Nour, for this question. Very important question. We have taken a very much proactive approach since beginning of this year. Since beginning of this year, we have increased all the costs in the system because we were expecting this increase will come then as well in reality, which happened in the end. Normally, we are able always to understand and to predict a little bit in advance, so the impact then is minimum. In fact, we had some, let's say, impact for the previous backlog, of course, because it's very difficult to change the pricing and the contracts with your existing customers. This has been balanced out with increases that we have in our system for the new orders. Let me just summarize that the impact is there, but is minimum.

Speaker #4: So normally, we are always able to understand and to predict a little bit in advance, so the impact then is minimal. In fact, we had some, let's say, impact from the previous backlog.

Speaker #4: Of course, because it's very difficult to change the pricing and the contracts with your existing customers. But this has been balanced out with increases that we have in our system for the new orders.

Speaker #4: So, let me just summarize that the impact is there, but it is minimal. It did not affect, as you see, in a major way our gross profit and even gross profit per ton.

Borjan Sehovac: It did not affect, as you see in a major point, our gross profit and even gross profit per ton. If you see the gross profit per ton of copper increased, premium on copper, logistics on copper, et cetera, increased as well. We have been very much able, thanks to our proactive approach, to offset any extra costs or any, let's say, relevant or material extra costs because we have passed it to the market.

Speaker #4: If you see, the gross profit per ton of copper increased, but the premium on copper, logistics on copper, etc., increased as well. So we have been very, very much able, thanks to our proactive approach, to offset any extra cost or any—let's say—relevant or material extra costs, because we have passed it to the market.

Speaker #5: Amazing. And can you please explain the drivers behind the volume growth in Q2, and why we are seeing lower backlog volumes?

[Analyst]: Can you please explain the drivers behind the volume growth in Q2 and why are we seeing lower backlog volumes?

Nour Eldin: Can you please explain the drivers behind the volume growth in Q2 and why are we seeing lower backlog volumes?

Speaker #4: Sure. The drivers of the Q2 increase in volumes are: the market is good, the fundamentals of the market are good, solar projects are ongoing, and interconnections are ongoing.

Borjan Sehovac: The drivers of the Q2 increased volumes are the market is good. The principles of the market are good. Solar projects are ongoing. Interconnections are ongoing. Energy security is one of the priority agenda for all governments. Mega projects, giga projects, stadium constructions, commercial malls, all these are under construction. We may have seen some real estate, let's say private real estate, slow down, but as you have seen, has been fully recovered by other channels. Moreover, I want to repeat this, almost 40% of our revenue was generated abroad, not in KSA. UAE is doing very well. For example, the whole GCC, especially UAE, is doing well. Our factories as well abroad are doing very well. Most of the segments, except utilities, which we have had some good slowdown, let's say, in these six months, were very good.

Speaker #4: Energy security is one of the priority agendas for all governments. Mega projects, giga projects, stadium constructions, and commercial malls—all these are under construction.

Speaker #4: We may have seen some real estate—let's say private real estate—slowdown, but as you have seen, it has been fully recovered by other channels.

Speaker #4: Moreover, I want to repeat this: almost 40% of our revenue was generated abroad, not in KSA. So, UAE is doing very well. For example, the whole GCC, especially UAE, is doing well.

Speaker #4: Our factories, as well as those abroad, are doing very well. So, most of the segments—except utilities, which have had some slowdown, let’s say in these six months—were very good.

Speaker #4: Local utilities are down, but this was recovered with other utilities and other channels, either local or in non-KSA markets.

Borjan Sehovac: Utilities, local utilities are down, but recovered with other utilities and other channel, either local or in non KSA markets.

Speaker #5: That's clear. And on the Q2 backlog volumes?

[Analyst]: That's clear. On the Q2 backlog volumes?

Nour Eldin: That's clear. On the Q2 backlog volumes?

Speaker #4: Yes. Q2 backlog volumes—we are presenting part of the picture, which is the backlog. Backlog means orders for which we have received the purchase order and for which we have already booked and hedged all the metals.

Borjan Sehovac: Yes. Q2 backlog volumes, we are presenting part of the picture, which is the backlog. Backlog means orders which we have received the purchase order and for which we have already booked and hedged all the metal. This, in the end, it is still almost SAR 6 billion. Yes, in volume is slightly lower than the previous period. What I want to highlight as well that besides backlog, there is also so-called Letter of Intent projects, where we have, let's say, the award with the customer, but the purchase order is not released. Offerings, tenders, these are very strong. These are, let's say, the three phases of the project. You first do the offer, then you receive the award, and then you get the purchase order where you put all the, let's say, this order in the system.

Speaker #4: But in the end, it is still almost 6 billion riyal. Yes, the volume is slightly lower than the previous period. But what I want to highlight as well is that, besides backlog, there are also so-called letter of intent projects where we have, let's say, the award with the customer, but the purchase order is not released.

Speaker #4: And offerings, tenders—these are very strong. So, these are, let's say, the three phases of the projects. You first do the offer, then you receive the award, and then you get the purchase order, where you put, let's say, this order in the system.

Speaker #4: So, while maybe the volume of the backlog went slightly down, the other two segments—the other two phases of offerings and letters of intent—are very strong, and even stronger than the previous period.

Borjan Sehovac: While maybe the volume of the backlog went slightly down, the other two segments, the other two phases of offerings and Letter of Intent, are very strong and even stronger than previous period. Usually, this then will translate into the future backlog. Another very important point is, we have consumed as well in an accelerated, in a very good, let's say, way, the backlog, because the speed of the consumption of the backlog has also accelerated. We have done, as you mentioned, very strong Q2 in sold volume. We are coupling sold volume with a slightly reduced backlog and a very good, let's say, offering, and Letter of Intent awards and offers that we are having with the market.

Speaker #4: So usually, this then will translate into the future backlog. But another very important point is when we have also consumed, in an accelerated and very good—let's say—way, the backlog, because the speed of the consumption of the backlog has also accelerated. This is because we have done, as you mentioned, a very strong Q2 in sold volume.

Speaker #4: So we are coupling sold volume with the slightly reduced backlog and a very good, let's say, offering and letter of intent awards and offers that we are having with the market.

Speaker #5: That's very clear. Thank you so much.

[Analyst]: That's very clear. Thank you so much.

Nour Eldin: That's very clear. Thank you so much.

Speaker #4: Thank you. Thank you, Noor.

Borjan Sehovac: Thank you.

Speaker #3: Omar, thanks for the questions. Comes from the line of Saleh. Please go ahead, you're unmuted.

Hashem Al Haddad: Our next questions comes from the line of Saleh. Please go ahead. You are unmuted.

Speaker #6: Hello.

[Analyst]: Hello?

[Analyst 1]: Hello?

Speaker #4: Yes.

Speaker #6: Yeah. Good afternoon. Am I audible?

Borjan Sehovac: Yes.

[Analyst]: Yeah. Good afternoon. Am I audible?

[Analyst 1]: Yeah. Good afternoon. Am I audible?

Speaker #4: We can hear you very well.

Borjan Sehovac: We can hear you very well.

Speaker #6: That's all right, thank you for your presentation, and thank you to Rogers Capital for arranging the call. I have a follow-up question on the volumes and backlog of volumes, and another question.

[Analyst]: That's all right. Thank you for your presentation, and thank you for Rajhi Capital for arranging the call. I have a follow-up question on the volumes, on backlog of volumes, and other question. My first question is regarding how can we understand the difference between the backlog value that has recorded, mashallah, a growth year over year, while we have seen a decline in volume and backlog volume. Can we understand it from elevated copper and aluminum prices, or it is regard change in mix, or how can we understand it? That's my first question.

[Analyst 1]: That's all right. Thank you for your presentation, and thank you for Rajhi Capital for arranging the call. I have a follow-up question on the volumes, on backlog of volumes, and other question. My first question is regarding how can we understand the difference between the backlog value that has recorded, mashallah, a growth year over year, while we have seen a decline in volume and backlog volume. Can we understand it from elevated copper and aluminum prices, or it is regard change in mix, or how can we understand it? That's my first question.

Speaker #6: My first question is regarding how we can understand the difference between the backlog value, which has, mashallah, recorded growth year over year, while we have seen a decline in volume and backlog volume.

Speaker #6: Can we understand it from elevated corporate aluminum prices, or is it regarding a change in mix, or how can we understand it? That's my first question.

Speaker #4: Yes. Thank you, Saleh, for the question. There is an effect from both, of course. The copper and aluminum LME increased almost 20% compared to the previous year.

Borjan Sehovac: Yes. Thank you, Saleh, for the question. There is effect of the both, of course. Now the copper and aluminum, Al and Mi, increased almost 20% compared to the previous year. That's why maybe in value, the backlog is SAR 5.8 billion, quite at a high level. There's as well an effect on mix. There's also a mix effect on part of the transmission and distribution and low voltage cables. The effect is within both, mix and Al and Mi increase.

Speaker #4: So that's why, maybe in value, the backlog is $5.8 billion—quite at a high level. But there is, as well, an effect on mix.

Speaker #4: There's also a mix effect on part of the transmission and distribution and low voltage cables, so the effect is within both—a mix and LME increase.

[Analyst]: That's right.

[Analyst 1]: That's right.

Speaker #6: And if you allow me, can you explain the can you explain the mix the product mix of this quarter? Are it. More leaning to the transmission or other product?

Borjan Sehovac: Al and Mi prices.

[Analyst]: If you allow me, can you explain the mix, the product mix of this quarter? Is it more leaning to the transmission or other product?

[Analyst 1]: If you allow me, can you explain the mix, the product mix of this quarter? Is it more leaning to the transmission or other product?

Speaker #4: Yes. Let me just say the transmission was quite good this quarter, so this is very good news. Export was good as well. And export—we have exported lower, let's say. A good value on the backlog—I can leave it as well to Muaz to tell you the truth of the backlog, which you are also disclosing during these earnings calls.

Borjan Sehovac: Yes. Let me just say the transmission was quite good this quarter. This is a very good news. Export was good as well. Since export, we have imported a lower, let me say, a good value compared to previous quarter. On the backlog, actually, it is good to Moaz to tell you the state of the backlog that we are as well disclosing during this earnings call. Moaz, please, you can give maybe some information about the backlog.

Speaker #4: So, Muaz, could you please give some information about the backlog?

Speaker #7: As far as the backlog, we're at 65% in transmission products. Products were about 10% in distribution. And then, as far as the induced renewable energy and smaller size cables, we're at 25%.

[Company Representative] (Riyadh Cables Group): As far as the backlog, we're at 65% in transmission products. We're about 10% in distribution. As far as the end use, renewable energy and smaller size cables, we're at 25%. That really explains why you can see volumes decreasing, but numbers going up or the expected revenue from going up. It's just because of the product mix and the pricing response.

Mouaaz Alyounes: As far as the backlog, we're at 65% in transmission products. We're about 10% in distribution. As far as the end use, renewable energy and smaller size cables, we're at 25%. That really explains why you can see volumes decreasing, but numbers going up or the expected revenue from going up. It's just because of the product mix and the pricing response.

Speaker #7: And that really explains why you can see volumes decreasing but numbers going up, or the expected revenues going up. It's due to the product mix and the pricing of these products.

Speaker #3: That's really clear. Thank you so much.

[Analyst]: That's really clear. Thank you so much. My follow-up question or my second question is regarding the tendering in UAE, given the current geopolitical tensions. Given the current geopolitical tensions, how do you see the tendering pipeline in UAE?

[Analyst 1]: That's really clear. Thank you so much. My follow-up question or my second question is regarding the tendering in UAE, given the current geopolitical tensions. Given the current geopolitical tensions, how do you see the tendering pipeline in UAE?

Speaker #6: My follow-up question, or my second question, is regarding tendering in the UAE. Given the current geopolitical conditions and the current geopolitical tensions, how do you see the tendering pipeline in the UAE?

Speaker #4: One very good. Let me say, very good. The utilities are heavily investing. Our good utilization of our factories in UAE—don't forget that, in UAE, we are local as well.

Borjan Sehovac: One, very good, let me say, very good. The utilities are heavily investing. Our good utilization of our factories in UAE. Don't forget that UAE, we are local as well. We are not only exporting from here, but we have as well a local footprint in Sharjah. The business in UAE is doing actually very well. We did not see any slowdown. Actually, we have seen good awards. Anything can happen in the future, but until today, everything is quite positive, actually, in the UAE. UAE means both Dubai, especially Dubai and Abu Dhabi.

Speaker #4: We are not only exporting from here but we have as well local footprint in Sharjah. And the business in UAE is doing actually very very well.

Speaker #4: So, we did not see any slowdown. Actually, we have seen good awards. Anything can happen in the future, but until today, everything is quite positive, actually, in the UAE—both Dubai, especially Dubai, and Abu Dhabi.

Speaker #7: Yeah.

[Analyst]: Yeah, easily.

[Analyst 1]: Yeah, easily.

Speaker #3: Thank you for answering. Our next question comes from the line of Khalid. Please go ahead, you're unmuted.

Hashem Al Haddad: Thank you for answering. Our next question comes from the line of Khalid. Please go ahead. Your line unmuted.

Speaker #5: Thank you, RCD management, and thank you, Raj, for organizing the call. I just have one question on my end. You noted the slowdown in the utility sector.

[Analyst]: Thank you, RCG Management, and thank you, Achie, for organizing the call. I just have one question on my end. You noted a slowdown in the utility sector. Can you elaborate, is that coming from the transmission sector or the distribution, or is it from both? Following on, the backlog, it's 134,000 tons. The decline Q over Q, year over year, was that driven mainly from a decline in transmission or is it across?

[Analyst 2]: Thank you, RCG Management, and thank you, Achie, for organizing the call. I just have one question on my end. You noted a slowdown in the utility sector. Can you elaborate, is that coming from the transmission sector or the distribution, or is it from both? Following on, the backlog, it's 134,000 tons. The decline Q over Q, year over year, was that driven mainly from a decline in transmission or is it across?

Speaker #5: Can you elaborate? Is that coming from the transmission sector or the distribution, or is it from both? And following on, so the backlog is 134,000 tons. The decline quarter over quarter or year over year—was that driven mainly from a decline in transmission, or is it across?

Speaker #4: So, to answer the first question, the local utility slowdown is mainly in the distribution. We are still, let's say, waiting for the new frame agreement as well, as we mentioned last time.

Borjan Sehovac: To answer the first question, the local utility slowdown is mainly in the distribution. We are still, let's say, waiting for the new frame agreement as well, as you mentioned last time. It is mainly distribution. I have seen as well one question in the chat box, so I can also partially answer to this question. We have fully assessed this, let's say, delay of local utility with better export aluminum products. Better volume in export, which has slightly lower profit because the local utility, the profit was fairly okay, but of course, exporting distribution cables, low voltage and medium voltage cables, the profitability is slightly lower. This is indeed on the back. We want also to highlight that, There's a ground loop. Hold on one second. Hashem, please, can you Okay.

Speaker #4: So, it is mainly distribution. And I have seen as well one question in the chat box, so I can also partially answer this question.

Speaker #4: We have fully accepted this, let’s say, delay of local utility, with better export. So, better volume in the export, which has slightly lower profit. Because with the local utility, the profit was fairly okay, but of course, in exporting distribution cables—low voltage and medium voltage cables—the profitability is slightly lower.

Speaker #4: So, we also want to highlight that there is a sub-ground. Hashim, please, can you—okay. So, if and when the local utility comes back with good volumes, this, of course, will be seen on top of our current business.

Borjan Sehovac: If and when the local utility will come back now with the good volumes, this of course will be seeing them on top of our current business. To explain instead the backlog and the reduction of the backlog. I always say, if it is above 100 tons, 90 tons, 100,000 tons, the backlog is very good. I prefer to have better sales and slowly lower backlog, rather to have lower sales and higher backlog. This is as well very important points to highlight. Now, if you refer a backlog of previous quarter to this quarter, to me, these are fairly the same numbers. The backlog is still healthy. There is, of course, most of the backlog are transmission, 70% to 75%, as Moaz mentioned, which is excellent news.

Speaker #4: To explain instead the backlog and the reduction of the backlog—the reduction I always say we have. If it is above 90,000 ton, 100,000 ton, the backlog is very good.

Speaker #4: And I prefer to have better sales and to slowly lower backlog, rather than to have lower sales and higher backlog. So this is a very important point to highlight as well.

Speaker #4: Now, if you refer the backlog of the previous quarter to this quarter, to me, these are fairly the same numbers. So, I don't—we don't—the backlog is still healthy.

Speaker #4: Of course, most of the backlog—about 75%, as Muaz mentioned—is transmission, which is excellent news. Then, of course, the solar projects, low voltage cables for solar, or medium voltage or distribution—they are also part of this backlog.

Borjan Sehovac: Of course, the solar projects, low voltage cables for solar or medium voltage or distribution, they are also part of this backlog. The backlog is healthy, being majority of it in transmission products.

Speaker #4: But the backlog is healthy, with the majority of it in transmission products.

Hashem Al Haddad: Thank you very much. Our next question is from the line of Mr. Tamar. Please go ahead. Your line unmuted.

Hashem Al Haddad: Thank you very much. Our next question is from the line of Mr. Tamer. Please go ahead. Your line unmuted.

Speaker #3: Thank you. Our next question is from the line of Mr. Tomar. Please go ahead, you are unmuted.

Speaker #2: Thank you very much, and thank you for the detailed presentation. Congratulations on a great set of results in a challenging environment. I really appreciate you giving guidance in these uncertain times.

[Analyst]: Thank you very much, Mohan and Moaz for the call and the detailed presentation. Congratulations on a great set of results in a challenging environment, and really appreciate you giving guidance in these uncertain times. I have two questions. First one is looking beyond what is happening in the region currently and towards longer term plans. You were growing capacity at 6% to 10% growth every year. What exactly is the plan currently? Are we still looking at those numbers? Within the 6% to 10%, if you are planning the same, if you can split where the growth is coming from, KSA versus UAE or Iraq? This is the first one, please.

Tamer El-Asmar: Thank you very much, Mohan and Moaz for the call and the detailed presentation. Congratulations on a great set of results in a challenging environment, and really appreciate you giving guidance in these uncertain times. I have two questions. First one is looking beyond what is happening in the region currently and towards longer term plans. You were growing capacity at 6% to 10% growth every year. What exactly is the plan currently? Are we still looking at those numbers? Within the 6% to 10%, if you are planning the same, if you can split where the growth is coming from, KSA versus UAE or Iraq? This is the first one, please.

Speaker #2: I have two questions. So, the first one is: looking beyond what is happening in the region currently, and towards longer-term plans. You were growing capacity at 6% to 10% growth every year.

Speaker #2: What exactly is the plan currently? Are we still looking at those numbers? And within this 6 to 10%, where is the—if you're planning the same—where, if you can split, where the growth is coming from: KSA versus UAE or Iraq?

Speaker #2: So, this is the first one, please.

Speaker #4: Thank you. Thank you, Akash, for this question. So, we are still adding, and as you see, our capex is still at a high and good level.

Borjan Sehovac: Thank you. Thank you, Akash, for this question. We are still adding, and as you see, our CapEx are still on the high and good level because we are still adding capacity, which is very important. We are adding as well technology, that we will be seeing in the next future. We are adding geographical expansions, which are represented by Uzbekistan, represented by Syria. These expansions surely will be bringing, let's say, on the higher side of our declared capacity expansion and volume expansions. Surely we will be following at least the trend of 10% and possibly over.

Speaker #4: Because we are still adding capacity, which is very important. We are also adding technology, which we will be seeing in the near future.

Speaker #4: And we are adding geographical expansions, which are represented by Uzbekistan and Syria. So, these expansions surely will be bringing, let's say, on the higher side of our declared capacity expansion and volume expansions. So, surely you'll be following at least the trend of 10%, and possibly over.

Speaker #2: Thank you, Boran. Just one more—in terms of, I just wanted to get an idea. So as you have mentioned, and I think it's been...

[Analyst]: Thank you, Mohan. Just one more. I just wanted to get an idea. As you have mentioned, and I think it's been now quite some time in terms of utility slowdown. Given that copper prices are going up so much and you kind of have a fixed markup on the top, it's becoming very expensive for utilities to book orders. How long do you think this period of low orders or lower backlogs from utility can continue?

Tamer El-Asmar: Thank you, Mohan. Just one more. I just wanted to get an idea. As you have mentioned, and I think it's been now quite some time in terms of utility slowdown. Given that copper prices are going up so much and you kind of have a fixed markup on the top, it's becoming very expensive for utilities to book orders. How long do you think this period of low orders or lower backlogs from utility can continue?

Speaker #2: It's been quite some time now in terms of utility slowdown. Now, given that copper prices are going up so much and you kind of have a fixed markup on the top, it's becoming very expensive for utilities to purchase, to book orders.

Speaker #2: So, how long do you think this period of low orders—or lower backlogs—from utilities can continue? Just some kind of...

Speaker #4: There will be truth. This is very good. Let's say observation. But to tell you the truth, the slowdown of utilities is more in distribution, which is aluminum.

Borjan Sehovac: I can tell you the truth. This is very good, let's say, observation. To tell you the truth, the slowdown of utilities are more in distribution, which is aluminum. The second answer is, utility will never look at LME prices because the cost of non-dispatchment of the energy, the costs of blackout, the costs of not having secured and, let's say, good networks is much higher for them rather than 10% and 20% increase on copper or aluminum. The utility already saved more than 10 years ago, good amount and good optimization because they changed these distribution products from copper to aluminum, which is good. The slowdown that you are mentioning is mostly in distribution products. Look, in the end, it gave us more challenges to continue good saturation, expanding markets to customers, not having any reliance on a single customer.

Speaker #4: And the second question, second answer is: utility will never look at the LME prices, because the cost of non-dispatchment of the energy, the cost of blackout, the cost of not having secured and, let's say, good networks is much higher for them rather than a 10–20% increase on copper or aluminum.

Speaker #4: So, the utility already saved, more than 10 years ago, a good amount and achieved good optimization because they changed these distribution products from copper to aluminum.

Speaker #4: This is good. The slowdown that you are mentioning is mostly in distribution products, and maybe it is—I mean, in the end, it gave us more challenges to continue good saturation, expanding markets and customers, and not having any reliance on a single customer.

Speaker #4: And I repeat, the utility must continue investing in the distribution network and other expansions. So I'm sure that in the coming quarters, they will be coming back.

Borjan Sehovac: I repeat, the utility must continue investing in the distribution network and other expansions. I'm sure that in the coming quarters, they will be coming back. This, by the way, happened as well a couple of years back, where sometimes utilities have the peak in purchasing cables and overhead lines, and then they may be focused on other items like transformers, switch gears, and then another maybe year, they again focus back to the cable. I believe this is as well happening because seeing as well this utility and the CapEx and investment that they are planning, these are still very important. I'm sure it is just type of phasing of the project by utilities.

Speaker #4: This, by the way, happened as well a couple of years back, where sometimes utilities have a peak in purchasing cables and overhead lines, and then they maybe focus on other items like transformers, switchgears, and then another year they again focus back to the cable.

Speaker #4: So I believe this is also happening because, seeing as well these utility and the capex and investment that they are planning, these are still very important.

Speaker #4: So, I'm sure it is just a type of phasing of the project by utilities. But, to answer to this, it is a very strong message. I don't believe utilities will ever, let's say, look at the LME price to delay some investment, or the security of the network, or the efficient use of the network.

Borjan Sehovac: To answer to this very strong message, I don't believe any utilities will never, let's say, look at the LME price to delay some investment or security of the network or efficiency of the network. This is very important, I believe, to be highlighted.

Speaker #4: So, this is very important, I believe, to be highlighted.

Speaker #2: Well, thank you very much, Mr. Boran. Just one last, very quick question. I know I've already asked two questions, but this is just a very quick one.

[Analyst]: Oh, thank you very much, Mr. Borella. Just very last one, very quick one. I know I've already asked a question, a very quick one. On the pipeline beyond backlog. In our previous calls, you have mentioned that generally that number tends to range in between two waves of the backlog. Can you give us an idea of how does that number look currently?

Tamer El-Asmar: Oh, thank you very much, Mr. Borella. Just very last one, very quick one. I know I've already asked a question, a very quick one. On the pipeline beyond backlog. In our previous calls, you have mentioned that generally that number tends to range in between two waves of the backlog. Can you give us an idea of how does that number look currently?

Speaker #2: On the pipeline beyond backlog—so in our previous calls, you have mentioned that generally that number tends to range between 2x of the backlog.

Speaker #2: So, can you give us an idea of how that number looks currently?

Speaker #4: Sure. The quote backlog today, we stand at around 30 billion reals in quoting activity. Our conversion rate has been pretty much the same as our market share rate, in the 35% range.

[Company Representative] (Riyadh Cables Group): As far as the quote backlog, today, we stand around SAR 30 billion in quoting activity. Our conversion rate has been pretty much the same as our market share rate in the 35% range. We see that there's a lot of heavy quoting activity. In the backlog and LOI, we see that there are conversion in orders from these quotes. It seems to us that it's normal, though maybe the size of the quote log has grown a bit since the last six months. Over the last six months, the size of the quote backlog has increased.

Mouaaz Alyounes: As far as the quote backlog, today, we stand around SAR 30 billion in quoting activity. Our conversion rate has been pretty much the same as our market share rate in the 35% range. We see that there's a lot of heavy quoting activity. In the backlog and LOI, we see that there are conversion in orders from these quotes. It seems to us that it's normal, though maybe the size of the quote log has grown a bit since the last six months. Over the last six months, the size of the quote backlog has increased.

Speaker #4: So, I mean, we see that there's a lot of heavy quoting activity. And in the backlog and LOI, we see that they're converting into orders.

Speaker #4: From these quotes, it seems to us that it's normal, though maybe the size of the quote log has grown a bit over the last six months.

Speaker #4: Over the last six months, the size of the quote backlog had increased.

Speaker #2: That's really cool. Thank you so much, and all the best.

[Analyst]: That's very helpful. Thank you so much and all the best.

Tamer El-Asmar: That's very helpful. Thank you so much and all the best.

Speaker #4: Thank you. Thank you Akash.

Borjan Sehovac: Thank you. Thanks, Akash.

Speaker #3: Our next question comes from the line of Rahim. Please go ahead; you're unmuted.

Hashem Al Haddad: Our next question comes from the line of Ibrahim. Please go ahead, you are unmuted.

Speaker #5: Hello, good afternoon gentlemen. Congratulations on the strong set of results, and thank you for the presentation. I have a few questions from my side. One is regarding the delay of some tenders or some projects.

[Analyst]: Hello, good afternoon, gentlemen. Congrats on the strong set of results, and thank you for the presentation. A few questions from my side. One is on the delaying some tenders or some projects. It's been a while since we heard about any big interconnection projects. My question here is, do you think with the slowdown, there will be some gap created between completion of projects and execution of new projects similar to what we've seen during late 2024, early 2025?

[Analyst 3]: Hello, good afternoon, gentlemen. Congrats on the strong set of results, and thank you for the presentation. A few questions from my side. One is on the delaying some tenders or some projects. It's been a while since we heard about any big interconnection projects. My question here is, do you think with the slowdown, there will be some gap created between completion of projects and execution of new projects similar to what we've seen during late 2024, early 2025?

Speaker #5: It's been a while since we heard about any big interconnection projects. So my question here is do you think with this slowdown will there will be some gap created between completion of projects and execution of new projects similar to what we've seen during late 24 early 25?

Speaker #4: Look, I mean, overall, the projects market is doing pretty well. So there's a slowdown on one side, but there's an offset somewhere else. What we have experienced, as far as the interconnects we've been delivering to these projects...

[Company Representative] (Riyadh Cables Group): Look, overall, the projects market is doing pretty well. If there is a slowdown in one side, there's an offset somewhere else. What we have experienced as far as interconnects, we've been delivering to these projects. We landed some good orders this year and previous year from these, and we're executing deliveries for them. That answers another question in the chat box here about the interconnect. As far as the giga projects specifically, that's the point of the discussion. We have seen recent requests for quotes and orders from some of these projects, mainly the ones related to the international events, World Cup 2034, Expo 2030. We have a very good market share in these orders or in these projects.

Mouaaz Alyounes: Look, overall, the projects market is doing pretty well. If there is a slowdown in one side, there's an offset somewhere else. What we have experienced as far as interconnects, we've been delivering to these projects. We landed some good orders this year and previous year from these, and we're executing deliveries for them. That answers another question in the chat box here about the interconnect. As far as the giga projects specifically, that's the point of the discussion. We have seen recent requests for quotes and orders from some of these projects, mainly the ones related to the international events, World Cup 2034, Expo 2030. We have a very good market share in these orders or in these projects.

Speaker #4: We landed some good orders this year and the previous year from these, and we're executing deliveries for them. That also answers another question in the chat box here about the interconnects.

Speaker #4: As far as the gigaprojects specifically, that's the point of the discussion. We have seen recent requests for quotes and orders from some of these projects, mainly the ones related to the international events.

Speaker #4: World Cup 2034, Expo 2030. I mean, we have a very good market share in these orders, or in these projects.

Speaker #5: So you think the transmission segment will continue its momentum onward, without any gap created because of the delays or slowdown, or what?

[Analyst]: You think the transmission segment will continue its momentum onwards without any gap created because of the delays or slowdown or what?

[Analyst 3]: You think the transmission segment will continue its momentum onwards without any gap created because of the delays or slowdown or what?

Speaker #4: Basically, based on the plans by the Ministry of Energy for renewable energy generation capacity increase and the network enhancements and so on, we foresee it to be pretty steady for the next couple of years.

[Company Representative] (Riyadh Cables Group): Based on the plans by the Ministry of Energy for renewable energy generation capacity increase and the network enhancements and so on, we foresee it to be pretty steady for the next couple of years.

Mouaaz Alyounes: Based on the plans by the Ministry of Energy for renewable energy generation capacity increase and the network enhancements and so on, we foresee it to be pretty steady for the next couple of years.

Speaker #5: Because, Ibrahim, I want to ask—there's a new channel of...

Borjan Sehovac: Ibrahim, I want to add that there is a new channel of interconnection, let's say. It is exporting renewable energy to the nearby countries. Countries that they cannot or they don't have space or they don't have knowledge or financial facilities to build their own. There is, let's say, a new, let me say, not market, but a new channel coming, and this will be as well accelerating in the future. Connecting renewable energy, which is created in Saudi and being exported to the nearby countries. This is in addition to the normal interconnections, utility to utility or GCCIA grids, which gives more efficiency, more security.

Speaker #4: interconnection let's say. It is exporting renewable energy to the nearby countries. Countries that they cannot or they don't have space or they don't have knowledge or financial facilities to build their own so there is let's say a new let me say not market but new channel coming and this will be as well accelerating in the future.

Speaker #4: So, exporting and connecting renewable energy which is created in Saudi and being exported to nearby countries. This is in addition to the normal interconnections utility to utility, or GCCI grids, which gives more efficiency and more security.

Speaker #5: Excellent. Very clear. Just to follow up—and then I have another question. You mentioned that the backlog, or 65% of the backlog, is in transmission.

[Analyst]: Excellent. Very clear. Just follow up and then I have another question. You've mentioned that the backlog or 65% of the backlog is in transmission. I remember this used to be 50% more or less, at least in 2024. Is this correct? You're seeing higher contribution from the transmission to the overall backlog?

[Analyst 3]: Excellent. Very clear. Just follow up and then I have another question. You've mentioned that the backlog or 65% of the backlog is in transmission. I remember this used to be 50% more or less, at least in 2024. Is this correct? You're seeing higher contribution from the transmission to the overall backlog?

Speaker #5: I remember this used to be 50%, more or less, at least in '24. Is this correct? You're seeing higher contribution from the transmission to the overall backlog?

Speaker #4: That is correct. Your numbers are correct. Last quarter, we actually were at about 70% in transmission. Now we're about 65%, so, I mean, it goes up and down.

[Company Representative] (Riyadh Cables Group): That is correct. Your numbers are correct. Last quarter, we actually were at about 70% in transmission. Now we're about 65. It goes up and down. We still continue to see healthy demand from the transmission sector.

Mouaaz Alyounes: That is correct. Your numbers are correct. Last quarter, we actually were at about 70% in transmission. Now we're about 65. It goes up and down. We still continue to see healthy demand from the transmission sector.

Speaker #4: We still continue to see healthy demand from the transmission sector. Again, it's supported by the renewable energy expansion and the interconnect projects, whether it's internal within Saudi Arabia or external.

[Analyst]: Okay.

[Company Representative] (Riyadh Cables Group): It's supported by the renewable energy expansion and the interconnect projects, whether it's the internal within Saudi Arabia or the external.

[Analyst 3]: Okay.

Mouaaz Alyounes: It's supported by the renewable energy expansion and the interconnect projects, whether it's the internal within Saudi Arabia or the external.

Speaker #5: And this is as a percentage—in tonnage, or in value, these percentages?

[Analyst]: Correct.

[Analyst 3]: Correct.

[Company Representative] (Riyadh Cables Group): Yep.

Mouaaz Alyounes: Yep.

[Analyst]: This is as a percentage in tonnage or in value, these percentages?

[Analyst 3]: This is as a percentage in tonnage or in value, these percentages?

Speaker #4: Well, it really depends on the product category. If it's underground cables, then it's going to be higher tonnage. If it's overhead, it's lower tonnage.

[Company Representative] (Riyadh Cables Group): Well, it really depends on the product category. If it's underground cables, then it's going to be a higher tonnage. If it's overhead, it's lower tonnage.

Mouaaz Alyounes: Well, it really depends on the product category. If it's underground cables, then it's going to be a higher tonnage. If it's overhead, it's lower tonnage.

Speaker #5: No, no, I mean, is this 65 or 70% contribution out of the tonnage backlog or the value backlog?

[Analyst]: No, I meant this 65% or 70% contribution, is it out of the tonnage backlog or the value backlog?

[Analyst 3]: No, I meant this 65% or 70% contribution, is it out of the tonnage backlog or the value backlog?

Speaker #4: Tonnage. Tonnage.

Speaker #5: Tonnage. Okay, excellent. My second question: I'd like to get your view on the recent news we've heard about building new batteries by the principal buyer.

[Company Representative] (Riyadh Cables Group): Tonnage.

Mouaaz Alyounes: Tonnage.

[Analyst]: Tonnage. Okay, excellent. My second question, I'd like to get your view on the recent news we've heard about building new factories by the principal buyer. What's your view on this and the visibility of these projects, and if this going to help you in a way or another?

[Analyst 3]: Tonnage. Okay, excellent. My second question, I'd like to get your view on the recent news we've heard about building new factories by the principal buyer. What's your view on this and the visibility of these projects, and if this going to help you in a way or another?

Speaker #5: What's your view on this and the visibility of these projects, and if this can help you in any way or another?

Speaker #4: Well, I mean, we hear a lot about news of this or initiatives that take place for this. We believe that currently the supply, the market, and the demand are pretty much in line.

[Company Representative] (Riyadh Cables Group): Well, we hear a lot about news of this or initiatives that take place for this. We believe that currently the supply in the markets and the demand are pretty much are in line. We're adding capacity, others are adding capacity. If there's any competition that might come in, it's rather welcome.

Mouaaz Alyounes: Well, we hear a lot about news of this or initiatives that take place for this. We believe that currently the supply in the markets and the demand are pretty much are in line. We're adding capacity, others are adding capacity. If there's any competition that might come in, it's rather welcome.

Speaker #4: We're adding capacity. Others are adding capacity. And if there's any competition that might come in, it's rather welcome.

Speaker #5: So, I'm referring to the news related to the establishment of battery projects by the principal buyer.

[Analyst]: Sir, I'm referring to the news related to the establishment of factories projects by the principal buyer.

[Analyst 3]: Sir, I'm referring to the news related to the establishment of factories projects by the principal buyer.

Speaker #4: Yeah, I understand that. And again, whether it's for cables or for others, it's treated by us pretty much the same. Keep in mind one thing.

[Company Representative] (Riyadh Cables Group): Yeah, I understand that. Again, whether it is for cables or for others, it is treated to us pretty much the same. Keep in mind one thing, the transmission and the network enhancements, according to Saudi Energy in some of their presentations, they expect it to go at full speed for the next couple of years. Even if there is something new, they are not going to be able to catch up with the supply of the market, just merely because of the establishment and the qualifications.

Mouaaz Alyounes: Yeah, I understand that. Again, whether it is for cables or for others, it is treated to us pretty much the same. Keep in mind one thing, the transmission and the network enhancements, according to Saudi Energy in some of their presentations, they expect it to go at full speed for the next couple of years. Even if there is something new, they are not going to be able to catch up with the supply of the market, just merely because of the establishment and the qualifications.

Speaker #4: I mean the transmission and network enhancements, according to Saudi Energy in some of their presentations—I mean, they expect it to go at full speed for the next couple of years.

Speaker #4: Even if there's something new, they're not going to be able to catch up with the supply of the market—just merely because of the establishment and the qualifications.

Speaker #5: All right. Thank you, gentlemen, and I wish you the very best of luck.

[Analyst]: Okay. Thank you, gentlemen. Wish you the best of luck.

[Analyst 3]: Okay. Thank you, gentlemen. Wish you the best of luck.

Speaker #4: Thank you very much.

[Company Representative] (Riyadh Cables Group): Thank you very much.

Mouaaz Alyounes: Thank you very much.

Speaker #3: Our next question from the line of Shahad. Please go ahead, you're unmuted.

Hashem Al Haddad: Our next question from the line of Shahed. Please go ahead, you are unmuted.

Speaker #6: Hello am I audible?

[Analyst]: Hello, am I audible?

[Analyst 4]: Hello, am I audible?

Speaker #4: Yes. Yes Mr. Shahad.

[Company Representative] (Riyadh Cables Group): Yes. You are, Shahed.

Mouaaz Alyounes: Yes. You are, Shahed.

Speaker #6: I just had one question or clarification. So, you ended last year with a backlog of around $5.1 billion, and now it's reached nearly $6 billion.

[Analyst]: You ended last year with a backlog of around 5.1 billion, and now it's reached around the near 6 billion. Just to have a better understanding, should we expect lower margins for the existing or the older orders, since it was maybe harder to have price escalations on all of your clients and the adjustments of the pricing?

[Analyst 4]: You ended last year with a backlog of around 5.1 billion, and now it's reached around the near 6 billion. Just to have a better understanding, should we expect lower margins for the existing or the older orders, since it was maybe harder to have price escalations on all of your clients and the adjustments of the pricing?

Speaker #6: So, just to have a better understanding, should we expect lower margins for the existing or the older orders, since it was maybe harder to have price escalations on all of your clients and the adjustments of the pricing?

Speaker #4: If you will have seen this big variation of the pricing or the profitability, you will have seen it mostly in Q1 and Q2.

Borjan Sehovac: If you will have seen this big variation of the pricing or the profitability, you would have seen it mostly in Q1 and Q2. I did not see it because we have been able to pass any extra costs to the customers. We have been able as well to execute our backlog at a fairly good profit as expected profit.

Speaker #4: I did not see it, because we have been able to pass any extra costs to the customers, and we have been able as well to execute our backlog at a fairly good profit, as expected profit.

Speaker #6: Great. So, any further, for example, marginal pressure isn't expected as much, correct?

[Analyst]: Great. Any further, for example, marginal pressure isn't expected as much, correct?

[Analyst 4]: Great. Any further, for example, marginal pressure isn't expected as much, correct?

Speaker #4: No, it is not. For the time being, it is not expected, if, let's say, the situation continues to be the same or better. Because, as I repeat again, proactively we already adjust in advance—before even having it from our suppliers—we adjust in advance some contingency, in case the costs are increasing.

Borjan Sehovac: No, for time being, it is not expected. If let's say the situation continue to be this or better, because as I repeat, proactively, we already adjust in advance before even having it from our suppliers. We adjust in advance some contingency for in case the costs are increasing. This has been done. That's why in these first two quarters, which are the most relevant for the previous backlog, we did not face any, let's say, big pressure on profitability.

Speaker #4: So this has been done. That's why in these first two quarters, which are the most relevant for the previous backlog, we did not face any, let's say, big pressure on profitability.

Speaker #5: Good.

Speaker #6: Noted. Thank you, and congratulations on your results.

[Analyst]: Good. Noted. Thank you and congrats on your results.

[Analyst 4]: Good. Noted. Thank you and congrats on your results.

Speaker #4: Thank you. Thank you, Shahad. Thank you.

Borjan Sehovac: Thank you, Shahed.

Speaker #3: Our next question comes from the line of Shamir. Please go ahead, you're unmuted.

Hashem Al Haddad: Our next comes from the line of Shameer. Please go ahead. You're unmuted.

Speaker #7: Yeah am I audible?

[Analyst]: Am I audible?

[Analyst 5]: Am I audible?

Speaker #4: Yes you are.

Speaker #7: Yeah, so my question basically pertained to the average selling price, and I know that you guys provided us with an average breakdown of both copper and aluminium.

Borjan Sehovac: Yes, you are.

[Analyst]: Yeah. My question basically pertained to the average selling price, and I know that you guys provided us an average breakdown for both copper and aluminum. Could I maybe get an estimate on the markup? What percentage of that is manufacturing premium and what percentage of that is utilities or any other expenses which is added over the selling price?

[Analyst 5]: Yeah. My question basically pertained to the average selling price, and I know that you guys provided us an average breakdown for both copper and aluminum. Could I maybe get an estimate on the markup? What percentage of that is manufacturing premium and what percentage of that is utilities or any other expenses which is added over the selling price?

Speaker #7: Could I maybe get like an estimate on the markup what percentage of that is like a manufacturing premium and what percentage of that is utilities or any other expenses which is added over to the selling price?

Speaker #4: We don't go into these, let's say, details of the split of, let's say, the selling price. But I can just, let's say, simplify it for you.

Borjan Sehovac: We don't go into these, let's say, details or the split of the selling price. I can just, let's say, simplify it for you. We are declaring on purpose for your, let's say, modeling and for what you need. We are declaring the gross profit per ton and gross both copper and aluminum. We declare as well the split of volumes in copper and aluminum. Going more deeper than this, unfortunately, we are not able to answer.

Speaker #4: We are declaring on purpose, for your modeling and for what you need, we are declaring the gross profit per ton and gross—both copper and aluminium.

Speaker #4: And we declare as well the split of volumes in copper and aluminium. But going deeper than this, unfortunately, we are not able to answer.

Speaker #7: Okay. The second question pertains to basically the revenue segment that we're saying that okay 40% of that came out from out of KSA. What does the management expect that in the coming future of how will that percentage would that be stable around 40 or do we expect that to increase in the coming times?

[Analyst]: Okay. The second question pertains to basically the revenue segment that we're seeing, that 40% of that came out of KSA. What does the management expect that in the coming future, how will that percentage look? Will that be stable around 40, or do we expect that to increase in the coming times?

[Analyst 5]: Okay. The second question pertains to basically the revenue segment that we're seeing, that 40% of that came out of KSA. What does the management expect that in the coming future, how will that percentage look? Will that be stable around 40, or do we expect that to increase in the coming times?

Speaker #4: It is almost 40. Let's say this: The first half, as I mentioned before, one of our strategies is to diversify the geographies. We have already done this in Uzbekistan.

Borjan Sehovac: It is almost 40, let's say, this H1. As well, I mentioned before, one of our strategies to diversify the geographies, we have already done this in Uzbekistan. We have done this in Syria. We believe that in the future, of course I wish that in the future, let's say, every market increases, the split remains the same. In any case, we want always to diversify our geographical presence, we will do our best to, let's say, have more and more revenue non KSA based.

Speaker #4: We have done this in Syria. So, we believe that in the future—of course, I wish that in the future, let's say, every market increases so the split remains the same.

Speaker #4: But in any case, we always want to diversify our geographical presence. So we will do our best to, let’s say, have more and more revenue that is non-KSA based.

Speaker #7: Okay. Okay. Thank you.

[Analyst]: Okay. Thank you.

[Analyst 5]: Okay. Thank you.

Speaker #4: Thank you.

Speaker #7: Thank you.

Borjan Sehovac: Thank you.

[Analyst]: Okay.

[Analyst 5]: Okay.

Speaker #3: Our next question is from the line of Chitnaya. Please go ahead, you're unmuted.

Hashem Al Haddad: Italian. Our next question is from the line of Chaitanya. Please go ahead. You are unmuted.

Speaker #7: Am I audible?

[Analyst]: Am I audible?

[Analyst 6]: Am I audible?

Speaker #4: Yes, we can hear you very well.

Speaker #7: Yeah. So, my question is on volume expectations for the second half, compared to H1. How do you expect volumes and volume mix for H2?

Borjan Sehovac: Yes, we can hear you very well.

[Analyst]: Yeah. My question is on volume expectation for H2 compared to H1. How do you expect volumes and volume mix for H2? Do you expect any volumes from Uzbekistan and Syria?

[Analyst 6]: Yeah. My question is on volume expectation for H2 compared to H1. How do you expect volumes and volume mix for H2? Do you expect any volumes from Uzbekistan and Syria?

Speaker #7: And do you expect any volumes from Uzbekistan and Syria?

Speaker #4: Thank you. Thank you for this question. So, under normal conditions—and I highlight 'normal conditions' because in these current conditions, it's difficult to commit to any, let's say, clear answer.

Borjan Sehovac: Thank you for these questions. In normal conditions, and I highlight normal conditions, because in these conditions, it is difficult to commit to any clear answer. In normal conditions, H2 is better than H1. We have seen this as well in our previous years, for many reasons. Holidays, summer holidays, Eid holidays, et cetera. H2 normally is quite good. This H2, we are forecasting as good as H1. Hopefully, this will be achieved and overachieved. This is all in normal conditions. With the conditions that we are seeing today, gentlemen, I repeat, ladies and gentlemen, we have problems. Everybody has problems.

Speaker #4: Under normal conditions, the second half is better than the first half. We have seen this as well in our previous years, for many reasons.

Speaker #4: Holidays—summer holidays, Eid holidays, etc.—so the second half is normally quite good. This second half, we are forecasting to be as good as the first half. Hopefully, this will be achieved or even overachieved.

Speaker #4: But this is only under normal conditions. With the conditions that we are facing today, gentlemen—I repeat, ladies and gentlemen—we have problems. Everybody has problems.

Speaker #4: It is the matter how to manage the problems. How to be agile. How to have very good sales network and contact with customers. Maybe to accelerate some markets or some products or some contracts being postponed others because it's not that we have everything perfect on time as we wish.

Borjan Sehovac: It is the matter how to manage the problems, how to be agile, how to have a very good sales network and contact with customers, maybe to accelerate some markets or some products or some contracts, being postponed others, because it's not that we have everything perfect on time as we wish. These are the conditions. This is as well, let's say, our strength for these first six months, that we have been able to deliver a very solid, I believe, set of results. If this continue and our struggle, let's say, continue, we will be doing our best to repeat the halves. If tomorrow all the geopolitical conditions are solved, we can even do slightly better than, surely better than H1.

Speaker #4: So these are the conditions that we—this is as well, let's say, our strength for these first six months, that we have been able to deliver a very solid, I believe, set of results.

Speaker #4: If this continues and our struggle, let's say, continues, we will be doing our best to repeat the half. But if tomorrow all the geopolitical conditions are solved, we can even do slightly better—surely better than the first half.

Speaker #4: So I hope I gave you a little bit the color of what we could see in the second half. But please pay attention to this geopolitical situation.

Borjan Sehovac: I hope I gave you a little bit the color of what we could see H2. Please pay attention on this geopolitical situation, pay attention on the logistics delays, disruption, and trade closure. We have opened many other sources, channels of supply, still our main channels are through the shipments, which are coming in all these, let's say, straits, where it is quite affected by the current situation.

Speaker #4: Pay attention to the logistics delays and disruptions. Straight closure. So we have opened many other sources and channels of supply, but still, our main channels are through the shipments.

Speaker #4: Which are coming in all these, let's say, straits where it is quite affected by the current situation.

Speaker #3: Thank you, management. Our next question is from the line of Mohamed. Please go ahead, you're unmuted.

Hashem Al Haddad: Thank you, management. Our next question from the line of Mohammed. Please go ahead. You are unmuted.

Speaker #5: Thank you so much management. My question is from Waz. I have two things rather. When we last met during event hosted by EFG Waz you had slightly indicated that you expect just around the corner of 750k tons that would be generated from the Syrian plants.

[Analyst]: Thank you so much, management. My question is for Moaz. I have two things, rather. When we last met, during event hosted by EFG, Moaz, you had slightly indicated that you expect just around the corner of 750,000 tons that would be generated from the Syrian plants. Is that in place, as you said? Question number two, do you foresee any introductions or do you have any willingness to participate in submarine cable in the coming future? Thank you.

[Analyst 7]: Thank you so much, management. My question is for Moaz. I have two things, rather. When we last met, during event hosted by EFG, Moaz, you had slightly indicated that you expect just around the corner of 750,000 tons that would be generated from the Syrian plants. Is that in place, as you said? Question number two, do you foresee any introductions or do you have any willingness to participate in submarine cable in the coming future? Thank you.

Speaker #5: Is that in place as you said? And question number two. Do you foresee any introductions or do you have any willingness to participate in submarines cable in the coming future?

Speaker #5: Thank you.

Speaker #7: Well and this will answer hopefully your question and Mr. Hisham's question about the plans in Syria and what's going on. So I mean as we have disclosed to the market we had made an agreement with the Syrian sovereign fund to spend about 60 million riyals for a number of years.

[Company Representative] (Riyadh Cables Group): Look, this will answer, hopefully, your question and Mr. Hesham's question about the plans in Syria and what's going on. I mean, as we have disclosed to the market, we had made an agreement with the Syrian Sovereign Fund to spend about SAR 60 million for a number of years to rehabilitate this facility. The plan was phased and agreed upon, so it's not going to be a lot of CapEx that's spent upfront on this. It's going to take a phased approach. We wanted to make sure that the market is able to take these rehabilitations and expansions and the growth in capacity before we went and spent the amount. As far as how is the actual performance of the company, the Syrian company, versus the plan or the expectations, I believe we're very in line with the expectations. It's been performing very well.

Mouaaz Alyounes: Look, this will answer, hopefully, your question and Mr. Hesham's question about the plans in Syria and what's going on. I mean, as we have disclosed to the market, we had made an agreement with the Syrian Sovereign Fund to spend about SAR 60 million for a number of years to rehabilitate this facility. The plan was phased and agreed upon, so it's not going to be a lot of CapEx that's spent upfront on this. It's going to take a phased approach. We wanted to make sure that the market is able to take these rehabilitations and expansions and the growth in capacity before we went and spent the amount. As far as how is the actual performance of the company, the Syrian company, versus the plan or the expectations, I believe we're very in line with the expectations. It's been performing very well.

Speaker #7: To rehabilitate this facility. Now, this plan was phased and agreed upon, so it's not going to be a lot of capex that's spent upfront on this.

Speaker #7: It's going to take a phased approach. And we wanted to make sure that the market is able to take these rehabilitations and expansions and the growth and capacity before we and spend the money.

Speaker #7: As far as how is the actual performance of the company the Syrian company versus the plant or the expectations. I believe we're very in line with the expectations.

Speaker #7: It's been performing very well. There are month-to-month, or month-over-month, increases in production and in sales. As I said during our meeting, the target was 750 for this year. We believe we're still on track.

[Company Representative] (Riyadh Cables Group): There are month over month increase in production and in sales. As I said during our meeting, that the target was 750 for this year. We believe we're still on track for that.

Mouaaz Alyounes: There are month over month increase in production and in sales. As I said during our meeting, that the target was 750 for this year. We believe we're still on track for that.

Speaker #4: Yes. Maybe the second question was about the submarine, and this was also in the chat box. Look, absolutely, we don't have anything planned to do in submarine.

Borjan Sehovac: Yeah. Maybe the second question was about the submarine. This was also in chat box. Look, absolutely, we don't have anything in plan to do in submarine. Submarine, it is a quite different business. We are evaluating many options. One of these options, yes, of course, could have been submarine, but as of today, we have no any, let's say, confirmation or serious plan or kickoff of the submarine project to be happening.

Speaker #4: Submarine is quite a different business. We are evaluating many options. This is one of these options—yes, of course, it could have been submarine. But as of today, we have no, let's say, confirmation or serious plan or kickoff of the submarine project to be happening.

Speaker #7: All right. We have to always keep in mind—I mean, we are aware of the international trends. We make sure that we know what's going on worldwide and globally within the cable industry.

[Company Representative] (Riyadh Cables Group): Right. We have to always keep in mind that, we are aware of the international trends. We make sure that we know what's going on worldwide and globally within the cable industry. Not everything applies to our region. There's always active studies about the different trends that come in the market, and see how we can capitalize on.

Mouaaz Alyounes: Right. We have to always keep in mind that, we are aware of the international trends. We make sure that we know what's going on worldwide and globally within the cable industry. Not everything applies to our region. There's always active studies about the different trends that come in the market, and see how we can capitalize on.

Speaker #7: Not everything applies to our region. But I mean there's always active studies about the different trends that come in the market and see how we can capitalize on.

Speaker #5: Sure. I'll just follow up on with another question Waz. This is just connecting dots from your cash flow. Have we started collecting from Iraq or is this something that is still yet to be done?

Hashem Al Haddad: Sure. I'll just follow up with another question, Moaz. This is just connecting dots from your cash flow. Have we started collecting from Iraq, or is this something that is still yet to be done?

[Analyst 7]: Sure. I'll just follow up with another question, Moaz. This is just connecting dots from your cash flow. Have we started collecting from Iraq, or is this something that is still yet to be done?

Speaker #7: Well, look, I mean, regularly we are receiving payments from Iraq. Though you can see that we have booked some more provisions. This quarter, however, we are getting payments from Iraq.

[Company Representative] (Riyadh Cables Group): Well, look, regularly, we're receiving payments from Iraq. Though you can see that we have booked some more provisions this quarter.

Mouaaz Alyounes: Well, look, regularly, we're receiving payments from Iraq. Though you can see that we have booked some more provisions this quarter.

Hashem Al Haddad: Yes.

[Analyst 7]: Yes.

[Company Representative] (Riyadh Cables Group): However, we are getting payments from Iraq. It's not as fast as we want it to be. However, the message is it's still receivables are outstanding with the government. We know at some point, it will be collected. We're trying to expedite this collection. It was factored originally in the price when we went into such long term tenders. Also, keep in mind that since the Hormuz closure, Iraq has become a higher risk country. The risk factor on it went up, and that's why we're having to book some more provisions, or we have to book some more provisions here in H1 for Iraq.

Mouaaz Alyounes: However, we are getting payments from Iraq. It's not as fast as we want it to be. However, the message is it's still receivables are outstanding with the government. We know at some point, it will be collected. We're trying to expedite this collection. It was factored originally in the price when we went into such long term tenders. Also, keep in mind that since the Hormuz closure, Iraq has become a higher risk country. The risk factor on it went up, and that's why we're having to book some more provisions, or we have to book some more provisions here in H1 for Iraq.

Speaker #7: It's not as fast as we want it to be. However the message is it's still receivables are outstanding with the government. So we know at some point it will be collected.

Speaker #7: We're trying to expedite this collection. And it was factored originally in the price when we went into such long term tenders. Also keep in mind that since the Hormuz closure the Iraq has become a higher risk country.

Speaker #7: So there is a factor on it—it went up. And that's why we’re having to book some more provisions. We had to book some more provisions during H1 for Iraq.

Speaker #5: Thank you so much, Hattikallah management.

Speaker #4: So grand. Thank you.

Hashem Al Haddad: Thank you so much. Thank you, management.

[Analyst 7]: Thank you so much. Thank you, management.

[Company Representative] (Riyadh Cables Group): Welcome.

Mouaaz Alyounes: Welcome.

Borjan Sehovac: You're welcome. Thank you.

Speaker #3: So due to time limits I'll take the last two questions before concluding the Q&A session from the chat box. First question comes from the line of Faisal asking what was the main reason for aluminum gross profits falling and does the backlog still hold a 50/50 copper and aluminum mix?

Hashem Al Haddad: Due to time limits, I'll take the last two questions before concluding the Q&A session from the chat box. First question comes from the line of Faisal, asking, What was the main reason for aluminum gross profits falling? Does the backlog still hold a 50/50 copper and aluminum mix?

Speaker #4: So I will answer to this question. The reason of the slow decline of gross profit per ton of aluminum is mainly due to market mix and cable mix.

Borjan Sehovac: I will answer to this question. The reason of the slow decline of gross profit per ton of aluminum is mainly due to market mix and cable mix, aluminum cable mix, I mean. As I said, there is some slowdown in the utilities, but acceleration in aluminum products which are exported. This is the first effect. Second effect is about the backlog. Maybe Moaz wants to highlight this. Go ahead.

Speaker #4: Aluminum cable mix I mean. As I said there is some slowdown in the utilities. But acceleration in aluminum products could be which are exported.

Speaker #4: So this is the first effect. Second effect is about the backlog. Maybe Waz wants to highlight this. Go ahead.

Speaker #7: As far as the mix within the backlog I mean we copper is prevailing in the backlog over aluminum. Keep in mind that deliveries may not be always in line with the backlog.

[Company Representative] (Riyadh Cables Group): As far as the mix within the backlog, copper is prevailing in the backlog over aluminum. Keep in mind that deliveries may not be always in line with the backlog. You might have deliveries that, you took an order this quarter, and you delivered it in the same quarter. That might not be visible to you when we disclose these numbers. Currently, we have a higher percentage of copper than aluminum.

Mouaaz Alyounes: As far as the mix within the backlog, copper is prevailing in the backlog over aluminum. Keep in mind that deliveries may not be always in line with the backlog. You might have deliveries that, you took an order this quarter, and you delivered it in the same quarter. That might not be visible to you when we disclose these numbers. Currently, we have a higher percentage of copper than aluminum.

Speaker #7: You might have deliveries where you took an order this quarter and delivered it in the same quarter. So, that might not be visible to you when we disclose these numbers.

Speaker #7: But currently we have a higher percentage of copper than aluminum.

Speaker #3: Yes. The last question from the line of Naif is: could you elaborate more, and again, on the copper gross profits?

Hashem Al Haddad: Okay. The last question from the line of Taif is asking, Could you elaborate more and again on the copper gross profit?

Speaker #4: If I'm saying that copper gross profit copper gross profit has been very good because of the good again mix. Mix of the transmission and other cables.

Borjan Sehovac: If I understand that, copper gross profit? Copper gross profit has been very good because of the good, again, mix of the transmission and other cables. Basically, it's mostly due to the mix. This is more or less the same mix that we are seeing in our backlog.

Speaker #4: So basically, it's mostly due to the mix, and this is more or less the same mix that we are seeing in our backlog.

Speaker #3: Clear. Thank you all. I'll now hand over the mic to the management team for a closing remark.

Hashem Al Haddad: That's clear. Thank you all. I'll now hand over the mic to the management team for a closing remark.

Speaker #4: Thank you Hashim. Thank you Rajiv Capital. Thank you all for attending Riyadh Cable Group earning call. Before we conclude I mean let me again leave you with the final message.

Borjan Sehovac: Thank you, Hashem. Thank you, Rajhi Capital. Thank you all for attending Riyadh Cables Group earnings call. Before we conclude, let me again give you the final message. The H1 2026 really has tested our company, our industry in many ways. Again, these geopolitical uncertainties, supply chain logistics, we mentioned them all. All these challenges have really put us in a quite demanding operating environment. Despite this, our strong team, our strong people, our strong group, our strong board, we all have, I believe, demonstrated the strength of our business model, which is really positioning our group on a very well, let's say, level to continue creating long-term value for all our stakeholders. Once again, thank you. Thank you all for your time and your continued interest and continued support. Have a pleasant afternoon.

Speaker #4: The first half of 2026 has really tested our company and our industry in many ways. Again, there are geopolitical uncertainties and supply chain logistics—we mentioned them all.

Speaker #4: And all these challenges have really put us in a quite demanding operating environment. But despite this, our strong team, our strong people, our strong group, our strong Board—we all have, I believe, demonstrated the strength of our business model, which is really positioning our group on a very, well, let's say, solid level to continue creating long-term value for all our stakeholders.

Speaker #4: So, once again, thank you. Thank you all for your time, your continued interest, and continued support. Have a pleasant afternoon.

Speaker #3: Thank you, management. Thank you, Morian, Fahad, and Mars, for the comprehensive presentation and for answering questions, as well as for taking the time to conduct this call.

Hashem Al Haddad: Thank you, management. Thank you, Brian, Baha, and Moaz for the comprehensive presentation and answering, as well as taking the time to conduct this call. Would also like to thank everyone for attending. Wishing you a good day, and you may now disconnect.

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Q2 2026 Riyadh Cables Group Co Earnings Call

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