Q2 2026 Tanmiah Food Co Earnings Call

August 9, 2026

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Speaker #4: Good afternoon, everyone. This is Farhan. I'm a sell-side user at Al Jazeera Capital. On behalf of Al Jazeera Capital, it is my pleasure to welcome you all to Tanmiah's earnings call for Q2 2026.

Farrukh Khan: Good afternoon, everyone. This is Farrukh Khan from Sell-Side Research at Aljazira Capital. On behalf of Aljazira Capital, it is my pleasure to welcome you all to Tanmiah's earnings call for Q2 2026. I am pleased to welcome our panelists on the call today. Amongst our panelists, we have Mr. Zulfiqar Hamadani, the Group CEO; Mr. Fadi Qutishat, Group CFO; Mr. Marcos Delorenzo, the CEO of Fresh Poultry Segment. We will start the call with the management before opening the floor for participants for the Q&A session. I will start by handing over to the Investor Relations. Ms. Mona, the mic is yours.

Speaker #4: I am pleased to welcome our panelists on the call today. Among our panelists, we have Mr. Zulfikar Hamdani, the Group CEO; Mr. Fadi Qudai Shah, Group CFO; and Mr. Marcus De Lorenzo, the CEO of the Fresh Poultry Segment.

Speaker #4: We will start the call with the management before opening the floor for participants. For the Q&A session, I will start by handing over to Investor Relations. Ms. Mona, the mic is yours.

Speaker #5: Good afternoon, everyone, and thank you for joining Tanmiah Food Company's Q2 and first half of 2026 earnings presentation. I would also like to thank Al Jazeera Capital for hosting the call.

[Company Representative] (Tanmiah Food Co): Good afternoon, everyone. Thank you for joining Tanmiah Food Company's Q2 and H1 2026 earnings presentation. I would like to thank you, Aljazira Capital, for hosting the call. My name is Mona, and I'm the Investor Relations Manager. We released our H1 2026 results earlier today, which are available on Tadawul. The earnings presentation is also posted in the Investor Relations section on our website. Before we begin, a quick reminder that today's remarks may include forward-looking statements which are subject to the risks set out of our disclaimer. Once we've walked you through the presentation, we will be glad to take your questions on the performance, strategy, and the outlook ahead. Right now, the mic is with you, Mr. Zulfiqar.

Mona Alobeid: Good afternoon, everyone. Thank you for joining Tanmiah Food Company's Q2 and H1 2026 earnings presentation. I would like to thank you, Aljazira Capital, for hosting the call. My name is Mona, and I'm the Investor Relations Manager. We released our H1 2026 results earlier today, which are available on Tadawul. The earnings presentation is also posted in the Investor Relations section on our website. Before we begin, a quick reminder that today's remarks may include forward-looking statements which are subject to the risks set out of our disclaimer. Once we've walked you through the presentation, we will be glad to take your questions on the performance, strategy, and the outlook ahead. Right now, the mic is with you, Mr. Zulfiqar.

Speaker #5: My name is Mona, and I'm an investor relations manager. We have released our H1 2026 results earlier today, which are available on Tadawul. The earnings presentation is also posted in the investor relations section on our website.

Speaker #5: Before we begin, a quick reminder that today's remarks may include forward-thinking statements, which are subject to the risks set out in our disclaimer. Once we walk you through the presentation, we will be glad to take your questions on performance, strategy, and the outlook ahead.

Speaker #5: Right now, the mic is with you, Mr. Zulfikar.

Speaker #4: Thank you very much, Mona, and thank you very much, Al Jazeera Capital, for hosting this call. My name is Zulfikar Hamdani. I'm the CEO of Tanmiah.

Zulfiqar Hamadani: Thank you very much, Mona, and thank you very much, Aljazira Capital, for hosting this call. My name is Zulfiqar Hamadani. I am the CEO of Tanmiah. I am joined today by our group CFO, Mr. Fadi Qutishat; the CEO of our fresh poultry division, Marcos Delorenzo; CEO of our restaurants business, Mr. Ehab Mohammed; and our director of investor relations, Ms. Laura Fraga. As Mona mentioned, we have released the H1 of 2026 results earlier today, which are available on Tadawul, and the earnings presentation is also posted in our investor relations section of our website. Once we have walked you through the presentation, we will be glad to take your questions on performance, strategy, and the outlook ahead with the disclaimer which Mona already mentioned about the forward-looking statements. We can move to the next slide.

Speaker #4: I'm joined today by our Group CFO, Mr. Fadi Qudai Shah; the CEO of our Fresh Poultry Division, Marcus De Lorenzo; the CEO of our Restaurants Business, Mr. Ehab Mohammad; and our Director of Investor Relations, Ms. Laura Frega.

Speaker #4: As Mona mentioned, we have released the first half 2026 results earlier today, which are available on Tadawul. The earnings presentation is also posted in the Investor Relations section of our website.

Speaker #4: We are glad to take your questions on performance, strategy, and the outlook ahead, with the disclaimer that Mona already mentioned about the forward-looking statements.

Speaker #4: We can move to the next slide. The first half of 2026 demonstrated continued progress in translating our strategic priorities into tangible operational and financial outcomes.

Zulfiqar Hamadani: The H1 of 2026 demonstrated continued progress in translating our strategic priorities into tangible operational and financial outcomes. While the regional environment remained complex, all four of our strategic pillars stayed on track, with the Q2 marking a clear step up in performance. On customer-focused commercial excellence, we entered the Qatar market during the H1, scaling our GCC coverage alongside Kuwait, Bahrain, and the UAE. This drove a 56% year-on-year increase in revenue outside KSA and 80% in Q2 alone. We also advanced our innovation efforts with the continued success and rollout of our fresh Taste Secrets and frozen breaded chicken lines, catering to today's consumer needs. On strengthening the core and optimizing the asset base, we continued expanding capacity in our value chain and added six new farms during this period as part of our efforts.

Speaker #4: While the regional environment remained complex, all four of our strategic pillars stayed on track, with the second quarter marking a clear step-up in performance.

Speaker #4: On customer-focused commercial excellence, we entered the Qatar market during the first half, scaling our GCC coverage alongside Kuwait, Bahrain, and the UAE. This drove a 56% year-on-year increase in revenue outside KSA, and 80% in Q2 alone.

Speaker #4: We also advanced our innovation efforts with the continued success in rollout of our Fresh Taste Secrets and frozen breaded chicken lines, catering to today's consumer needs.

Speaker #4: On strengthening the core and optimizing the asset base, we continued expanding capacity in our value chain and added six new farms during this period as part of our efforts.

Speaker #4: To utilize our current processing capacity, fresh poultry production rose 10% year-on-year to an average of 604,000 birds per day. In restaurant operations, Popeyes' revenue per store increased 15%, with the same growth witnessed for like-for-like sales, and a significant improvement in EBITDA.

Zulfiqar Hamadani: To utilize our current processing capacity, fresh poultry production rose 10% year-on-year to an average of 604,000 birds per day. In restaurant operations, Popeyes revenue per store increased 15%, with the same growth witnessed for like-for-like sales and a significant improvement in EBITDA. As a matter of fact, Popeyes has now reached corporate EBITDA positive level, which of course is a major step forward. On operational excellence and cost optimization, we increased our cash balance and reduced working capital days over the last six months, even as grain and key input purchases increased to support operations through ongoing geopolitical tensions. Popeyes progress has also helped deliver SAR 11 million.

Speaker #4: As a matter of fact, Popeye's has now reached a corporate EBITDA-positive level, which, of course, is a major step forward. On operational excellence and cost optimization, we increased our cash balance and reduced working capital days over the last 6 months, even as grain and key input purchases increased to support operations through ongoing geopolitical tensions.

Speaker #4: Popeye's progress has also helped deliver 11 million riyals. And finally, on digital enablement and people, we are building the digital backbone through our SAP S/4HANA implementation, with the H2—by the second half of 2026—go-live on track.

Zulfiqar Hamadani: Finally, on digital enablement and people, we are building the digital backbone through our SAP S/4HANA implementation with the H2 by H2 of 2026 go live on track while accelerating our digital retail and CRM capabilities and using intelligent automation to improve productivity. To sum up, despite a more complex and challenging external environment compared to the H1 of 2025, we executed as planned across all four pillars, and we are confident these initiatives will continue to translate into improved profitability as they mature through the year. Next one. Our platform spans the full value chain from feed formulation through farming and processing and ultimately distribution to retail and food service channels. We serve customers in Saudi Arabia, the UAE, Bahrain, Oman, Kuwait, and now Qatar as well, and we continue to gain traction in select Asian markets.

Speaker #4: While accelerating our digital retail and CRM capabilities, and using intelligent automation to improve productivity. To sum up, despite a more complex and challenging external environment compared to the first half of 2025, we executed as planned across all four pillars, and we are confident these initiatives will continue to translate into improved profitability as they mature through the year.

Speaker #4: Our platform spans the full value chain, from feed formulation through farming and processing, and ultimately distribution to retail and food service channels.

Speaker #4: We serve customers in Saudi Arabia, the UAE, Bahrain, Oman, Kuwait, and now Qatar as well. We continue to gain traction in select Asian markets.

Speaker #4: Aside from the new farm additions, our facilities across both agribusiness and restaurant operations have remained relatively stable, as we focus on optimizing the core.

Zulfiqar Hamadani: Aside from the new farm additions, our facilities across both agribusiness and restaurant operations have remained relatively stable as we focus on optimizing the core. Our reach keeps growing. We now supply more retail stores in Saudi Arabia and the GCC countries, up nearly 17% and 12% year-on-year respectively. This footprint helps us manage cost to serve, run logistics efficiently, and use our distribution network to protect margins as we grow. Next one. Tanmiah has been focused on maximizing the value of our existing asset base, and the progress achieved in H1 reflects this transition. Capital expenditure declined nearly 77% year-on-year as we moved beyond the peak investment phase and shifted our focus towards utilizing end returns.

Speaker #4: Our reach keeps growing. We now supply more retail stores in Saudi Arabia and the GCC countries, up nearly 17% and 12% year-on-year, respectively. This footprint helps us manage cost to serve, run logistics efficiently, and use our distribution network to protect margins as we grow.

Speaker #4: Tanmiah has been focused on maximizing the value of our existing asset base, and the progress achieved in the first half reflects this transition.

Speaker #4: Capital expenditure declined nearly 77% year-on-year as we moved beyond the peak investment phase and shifted our focus towards utilization and returns. Our agribusiness platform has an average daily harvesting capacity of 800,000 birds per day, with SAR 142.6 million in leased right-of-use assets and SAR 174.9 million in remaining CapEx commitments.

Zulfiqar Hamadani: Our agribusiness platform has an average daily harvesting capacity of 800,000 birds per day, with SAR 142.6 million in leased Right-of-Use assets and SAR 174.9 million in remaining CapEx commitments. Restaurant operations with limited lease ROUA and outstanding capital commitments. We are advancing key optimization initiatives, including commissioning the new mega hatchery and feed mill this year, building our new grain silos as an extension to our existing storage facilities, expanding energy-saving projects, and continuing to work with our partners on broiler house development under capital light model. Next. Let me now take you through the key highlights from our two business segments. Beginning with Agribusiness, which comprises fresh poultry and animal feed and health products, contributing approximately 92% of total revenue. Agribusiness revenue increased 13.3% year-on-year to SAR 1,395 million, SAR 1.3 billion, basically.

Speaker #4: Restaurant operations with limited lease RUA and outstanding capital commitments. We are advancing key optimization initiatives, including commissioning the new mega hatchery and feed mill this year, building our new grain silos as an extension to our existing storage facilities, expanding energy-saving projects, and continuing to work with our partners on broiler house development under a capital-light model.

Speaker #4: Next, let me now take you through the key highlights from our two business segments. Beginning with Agribusiness, which comprises Fresh Poultry and Animal Feed and Health products, contributing approximately 92% of total revenue.

Speaker #4: Agribusiness revenue increased 13.3% year-on-year to SAR 1,395 million—basically SAR 1.4 billion. Fresh poultry revenues rose 13.9% to SAR 1.1 billion, supported by higher volumes, improved average selling prices, continued domestic and regional demand, and our entry into Qatar.

Zulfiqar Hamadani: Fresh poultry revenues rose 13.9% to SAR 1.1 billion, supported by higher volumes, improved average selling prices, continued domestic and regional demand, and our entry into Qatar. Animal feed and health products revenue increased 10.8% to SAR 278 million. Overall, Agribusiness reported H1 2026 net income of SAR 36 million, down 25.4% compared with the same period last year, with a margin of 2.6%, a 600 basis point increase compared with Q1 2026. Turning to restaurant operations, revenues increased 31.8% to SAR 126 million, driven by stronger commercial execution, like-for-like sales growth, and continued progress in Popeyes turnaround. The network comprised 94 outlets by 30 June, with aggregators accounting for 57% of transactions, driven by higher aggregator usage in Bahrain and Kuwait.

Speaker #4: Animal Feed and Health products revenue increased 10.8% to 278 million riyals. Overall, agribusiness reported first half 2026 net income of 36 million riyals, down 25.4% compared with the same period last year, with a margin of 2.6%, a 600 basis point increase compared with Q1 2026.

Speaker #4: Turning to restaurant operations, revenues increased 31.8% to 126 million riyals, driven by stronger commercial execution, like-for-like sales growth, and continued progress in Popeye's turnaround.

Speaker #4: The network comprised 94 outlets as of June 30th, with aggregators accounting for 57% of transactions, driven by higher aggregator usage in Bahrain and Kuwait.

Speaker #4: Amid the regional conflict and more cautious consumer mobility, the segment's net loss narrowed to 18 million riyals for the period, with an improving margin profile.

Zulfiqar Hamadani: Amid the regional conflict and more cautious consumer mobility, the segment's net loss narrowed to SAR 18 million for the period, with an improving margin profile. Importantly, restaurant operations achieved quarterly EBITDA positive in Q2. Overall, both segments delivered solid revenue growth during H1, alongside stronger Agribusiness profitability and a meaningful improvement in restaurant operations as the platform matures. Now we double to business, and for Agribusiness, I'll ask my colleague, Marcos Delorenzo, who heads our poultry business, to take us through the Agribusiness results for H1.

Speaker #4: Importantly, restaurant operations achieved quarterly EBITDA positive in Q2. Overall, both segments delivered solid revenue growth during the half, alongside stronger agribusiness profitability and a meaningful improvement in restaurant operations as the platform matures.

Speaker #4: Now we move to the business, and for agribusiness, I'll ask my colleague Marcos De Lorenzo, who heads our poultry business, to take us through the agribusiness results for the first half.

Speaker #1: Thank you, Zulfikar. Turning now to the agribusiness segments in more detail—the volumes sold translated into 85.5 million birds in the first half, supported by continued demand across the Kingdom and our export markets.

Marcos Delorenzo: Thank you, Zulfiqar. Turning now to the agri business segment in more detail. The volume sold translated into 85.5 million birds in H1, supported by continued demand across the kingdom and our export markets. The revenue breakdown by region demonstrates our successful effort in GCC market expansion with our branch and distribution network for fresh and frozen chicken. Average birds processed per day held at approximately 604,000 birds per day for the period, up 9.8% year-on-year, reflecting our measured approach to capacity ramp-up rather than growth for its sake. Lastly, on innovation, our value-added portfolio continued to build momentum. Taste Secrets revenues increased 115% year-on-year. This is our marinated value-added line. While our breaded chicken value-added line, launched just in the end of December, delivered 84% quarter-on-quarter growth.

Speaker #1: The revenue breakdown by region demonstrates our successful efforts in GCC market expansion, with our branches and distribution network for fresh and frozen chicken. Average birds processed per day held at approximately 604,000 birds per day for the period.

Speaker #1: Up 9.8% year-on-year, reflecting our measured approach to capacity ramp-up rather than growth for its own sake. Lastly, on innovation, our value-added portfolio continued to build momentum.

Speaker #1: These Secrets revenues increased 115% year-on-year; this is our marinated value-added line. While our breaded chicken value-added line, launched just at the end of December, delivered 84% quarter-on-quarter growth.

Speaker #1: The Secrets Chakra Pepper was recognized as the Product of the Year in Saudi Arabia in 2026, and we further expanded our regional reach with the launch of Tanmiah Premium Chicken in Qatar as well.

Marcos Delorenzo: Taste Secrets Shaqra Pepper was recognized as the product of the year in Saudi Arabia in 2026, and we further expanded our regional reach with the launch of Tanmiah Premium Chicken in Qatar as well. This is a deliberate strategy to shift our mix to a high margin value-added products, less exposed to commodity price volatility, and better aligned with the Saudi consumer preferences. I will hand over now back to Mr. Zulfiqar.

Speaker #1: This is a deliberate strategy to shift our mix to high-margin, value-added products, less exposed to commodity price volatility and better aligned with the Saudi consumer preferences.

Speaker #1: I will now hand over back to Mr. Zulfikar.

Speaker #4: Thank you, Marcos. Now, on the restaurant business: Performance in the first half reflected strong commercial momentum and continued improvement in unit economics across the network. The network comprised 94 outlets as of June 30, 2026.

Zulfiqar Hamadani: Thank you, Marcos. Now on restaurant business. Performance in H1 reflected strong commercial momentum and continued improvement in unit economics across the network. The network comprised 94 outlets as of 30 June 2026. Quarterly EBITDA per store improved from the loss of SAR 8.4 million in Q4 2025 to + in Q2 of 2026, marking the achievement of quarterly EBITDA breakeven ahead of schedule despite challenging external environment. Saudi Arabia accounted for 89% of the network, followed by Kuwait at 7% and Bahrain at 4%. Aggregators represented 57% of transactions, compared with 43% in store. While delivery remains an important channel, the strategic priority is to increase in-store sales and move towards a longer-term mix of approximately 60% in store and 40% delivery. Like-for-like sales increased 13% year-on-year, primarily driven by an 18% increase in transactions.

Speaker #4: Quarterly EBITDA per store improved from a loss of SAR 8.4 million in Q4 2025 to positive in Q2 2026, marking the achievement of quarterly EBITDA break-even ahead of schedule, despite a challenging external environment.

Speaker #4: Saudi Arabia accounted for 89% of the network, followed by Kuwait at 7% and Bahrain at 4%. Aggregators represented 57% of transactions, compared with 43% in-store.

Speaker #4: While delivery remains an important channel, the strategic priority is to increase in-store sales and move towards a longer-term mix of approximately 60% in-store and 40% delivery.

Speaker #4: Like-for-like sales increased 13% year-on-year, primarily driven by an 18% increase in transactions. This growth was sustained across all six months of the period, reflecting the impact of localized product innovation, value-led campaigns, and stronger commercial execution.

Zulfiqar Hamadani: This growth was sustained across all six months of period, reflecting the impact of localized product innovation, value-led campaigns, and stronger commercial execution. Overall, the business continues to mature with sustained sales momentum and improving economics supporting the transactions from quarterly EBITDA breakeven towards consistent profitability. With that, I will hand over to Fadi to take you through the financial performance in greater detail. Fadi?

Speaker #4: Overall, the business continues to mature, with sustained sales momentum and improving economics supporting the transition from quarterly EBITDA break-even towards consistent profitability. With that, I will hand over to Fadhi to take you through the financial performance in greater detail.

Speaker #4: Fadhi.

Speaker #2: Thank you. Mr. Zulfikar, assalamu alaikum. Good afternoon, everybody, and thank you to Al Jazeera for hosting us today. Revenue increased 14.6% year-on-year to 1.5 billion riyals for H1 2026.

Fadi Qutishat: Thank you, Mr. Zulfiqar. As-salamu alaykum. Good afternoon, everybody, and thank you for Aljazira Capital for hosting us today. Revenue increased 14.6% year on year, SAR 1.5 billion for H1 2026, with both segments delivering double digits. Momentum accelerated in Q2, with revenue increasing 21.5% to SAR 789 million. Agribusiness revenue increased 13.3%, led by fresh poultry, which benefited from improved average selling price and a 5.7% increase in sales volume to 85.5 million birds for H1. Restaurant operation revenue grew 31.8% to SAR 126 million, supported by continued commercial and operational excellence in Popeyes and stronger like-for-like sales across the 94 Outlook network. H1 net income attributable to shareholder amounted to SAR 18 million, down 8% year on year, primarily reflecting higher financing costs associated with the expansion program, along with the impact of geopolitical situation on higher grain costs, logistics, and insurance.

Speaker #2: With both segments delivering double digits, momentum accelerated in the second quarter, with revenue increasing 21.5% to 789 million riyals. Agribusiness revenue increased 13.3%, led by fresh poultry, which benefited from improved average selling price and a 5.7% increase in sales volume, to 85.5 million birds for the quarter.

Speaker #2: For the first half, restaurant operation revenue grew 31.8% to SAR 126 million, supported by continued commercial and operational excellence in Popeyes and stronger like-for-like sales across the 94 Outlook network.

Speaker #2: H1 net income attributable to shareholders amounted to 18 million riyals, down 8% year-on-year. This was primarily due to higher financing costs associated with the expansion program, along with the impact of the geopolitical situation on higher grain costs, logistics, and insurance.

Speaker #2: The quarterly trend was significantly stronger, with Q2 net income rising sharply year-on-year to 19 million riyals. On a quarter-over-quarter basis, the latest performance reflects 7.9% revenue growth and a substantial increase in net profit.

Fadi Qutishat: The quarterly trend was significantly stronger, with Q2 net income rising sharply year on year to SAR 19 million. On a quarter-over-quarter basis, the latest performance reflects 7.9% revenue growth and a substantial increase in net profits. While these cost pressures affected the first year results, the strong Q2 recovery and continued revenue growth across both segments provide a solid foundation for margin improvement, supported by higher utilization rates for our assets, enhancing commercial execution, and ongoing operational efficiencies. Let's flip the page to walk you through profitability. The results reflect a significant improvement in Q2, supporting growth across H1. Gross profit increased 12.2% year on year to SAR 360 million in H1. While the margin eased to 23.7% as higher grain, fuel, logistic costs were more than offset improved average selling price during H1.

Speaker #2: While these cost pressures affected the first-year results, the strong Q2 recovery and continued revenue growth across both segments provide a solid foundation for margin improvement, supported by higher utilization rates for our assets, enhanced commercial execution, and ongoing operational efficiencies.

Speaker #2: Let's flip the page to walk you through profitability. The results reflect a significant improvement in the second quarter, supporting growth across the first half.

Speaker #2: Gross profit increased 12.2% year-on-year to 360 million riyals in the first half, while the margin eased to 23.7%, as higher grain, fuel, and logistic costs were more than offset by improved average selling price during the first half.

Speaker #2: In Q2, gross profit increased by 26.6% to 194 million riyals, with margin expanding to 24.5%. Further improvement is expected as utilization of our newest facility increases.

Fadi Qutishat: In Q2, gross profit increased to 26.6% to SAR 194 million, with margin expanding 24.5%. Further improvement is expected as utilization of our newest facility increases. EBITDA increased 16.5% year on year to SAR 204 million in H1, with the margin improving to 13.4% in Q2. EBITDA rose to 42.3% to SAR 116 million, lifting the margin to 14.6%. On a quarter-over-quarter basis, the latest performance reflects 16.1% increase in gross profit and a 31% increase in EBITDA. Turning from the net income to the bridge slide, which sets out what moved our results between the two periods. Let me start from the top to walk you through Q2 results, because it's where the year turned. Three items drove the improvements. Price, channel actions contributed SAR 50 million, reflecting better price and a sharper channel mix.

Speaker #2: EBITDA increased 16.5% year-on-year to 204 million riyals in the first half. With the margin improving to 13.4% in Q2, EBITDA rose 42.3% to 116 million riyals, reflecting a margin lift to 14.6%.

Speaker #2: On a quarter-over-quarter basis, the latest performance reflects a 16.1% increase in gross profit and a 31% increase in EBITDA. Turning to the net income to the bridge slide, which sets out what moved our results between the two periods.

Speaker #2: Let me start from the top to walk you through the second quarter results, because it's where the year turned. Three items drove the improvement.

Speaker #2: Price and channel actions contributed SAR 50 million, reflecting better pricing and a sharper channel mix. Volume and portfolio mix added another SAR 18 million, as higher-margin categories grew their share as well.

Fadi Qutishat: Volume and portfolio mix added another SAR 18 million as higher margin categories grew their share as well, and restaurant operation contributed SAR 5 million as the Popeyes turnaround continued to gain momentum. Against those gains, we have absorbed SAR 24 million inflationary impact, SAR 15 million from expansion for routes and branches, SAR 6 million of production ramp-up costs, and SAR 5 million each in financing and additional depreciation. I would separate those headwinds into two categories because they are not the same thing. Inflation is a cost we manage. The other three, ramp-up, route expansion, and depreciation, are the cost of building capacity that is not yet fully earning. They are investment arriving in the P&L ahead of the returns they will generate. As the assets we have commissioned move forward to full utilization, the ramp-up and expansion lines should compress while the commercial contribution carries forward.

Speaker #2: And restaurant operations contributed 5 million riyals, as the Popeyes turnaround continued to gain momentum. Against those gains, we have absorbed a 24 million riyals inflationary impact, 15 million riyals from expansion for Roots and Branches, 6 million riyals of production ramp-up costs, and 5 million riyals each in financing and additional depreciation.

Speaker #2: I would separate those headwinds into two categories, because they are not the same thing. Inflation is a cost we manage. The other three—ramp-up, route expansion, and depreciation—are the costs of building capacity that is not yet fully earning. They are investments arriving in the P&L ahead of the returns they will generate.

Speaker #2: As the asset we have commissioned moves forward to full utilization, the ramp-up and expansion lines should compress, while the commercial contribution carries forward. For the first half, net profit attributable to shareholders was 17.8 million riyals, compared to 19 million riyals.

Fadi Qutishat: For H1, net profit attributable to shareholder was SAR 17.8 million against SAR 19 million, a decline of 8%. The same drivers apply at a larger scale. SAR 58 million from price and channel, SAR 25 million from volume and mix, SAR 10 million from the restaurant operation, set against SAR 37 million of inflation, SAR 26 million of route expansion and branches, SAR 13 million of ramp-up costs, SAR 16 million of financing, and SAR 9 million of additional depreciation on new assets. What the H1 figure conceals is the trajectory within it. The decline is entirely attributable to Q1, where we reported a small net loss. Q2 more than recovered that position. We finished H1 with quarterly earning materially ahead of where we began the year, and materiality ahead of the comparable quarter. Turning to cash flow and working capital.

Speaker #2: A decline of 8%. The same drivers apply at a larger scale: SAR 58 million from price and channel, SAR 25 million from volume and mix, and SAR 10 million from restaurant operations.

Speaker #2: Set against 37 million riyals of inflation, 26 million riyals of root expansion and branches, 13 million riyals of ramp-up costs, 16 million riyals of financing, and 9 million riyals of additional depreciation on a new asset.

Speaker #2: What the half-year figure conceals is the trajectory within it. The decline is entirely attributable to the first quarter. Where we reported a small net loss, the second quarter more than recovered that position.

Speaker #2: We finished the first half with quarterly earnings materially ahead of where we began the year, and materially ahead of the comparable quarter.

Speaker #2: Turning to cash flow and working capital, working capital declined to SAR 45.9 million in Q2, from SAR 226 million in the prior year. Working capital days improved to 86 days, versus 91 days in the prior quarter.

Fadi Qutishat: Working capital declined to SAR 45.9 million in Q2 from SAR 226 million in a prior year. Working capital days improved to 86 days versus 91 days in the prior quarter, supported by tighter inventory management and improved collections. The cash balance increased to SAR 81 million, up 31.4% from year-end 2025, reflecting higher utilization across the platform and lower CapEx intensity. As the major investment phase recedes, our focus remains on strengthening liquidity, maintaining working capital discipline, and improving cash generation across the business. Turning to the balance sheets. Our focus has shifted from funding expansion towards reducing leverage, improving returns, and preserving financial flexibility. Net debt to long-term EBITDA improved to 4.84x at June 2026 from 5.33x at year-end 2025, supported by EBITDA growth, stronger liquidity. The debt-to-capital ratio also improved to 70.2% from 70.9%.

Speaker #2: Supported by tighter inventory management and improved collections, the cash balance increased to 81 million riyals, up 31.4% from year-end 2025, reflecting higher utilization across the platform and lower capital expenditure intensity.

Speaker #2: As the major investment phase recedes, our focus remains on strengthening liquidity, maintaining working capital discipline, and improving cash generation across the business.

Speaker #2: Turning to the balance sheet, our focus has shifted from funding expansion towards reducing leverage, improving returns, and preserving financial flexibility. Net debt to long-term EBITDA improved to 4.84 times at June 2026 from 5.33 times at year-end 2025.

Speaker #2: Supported by EBITDA growth and stronger liquidity, the debt-to-capital ratio also improved to 70.2% from 70.9%. Return on invested capital increased to 4.2% from 3.6% on a long-term basis, while the current ratio stood at 1.0 times.

Fadi Qutishat: Return on invested capital increased to 4.2% from 3.6% on a long-term basis, while the current ratio stood at 1x. As utilization increases and capital deployment remains disciplined, we expect continued progress in leverage and returns over the remainder of the year. With that, I will hand it back to Mr. Zulfiqar to walk us through ESG priorities.

Speaker #2: As utilization increases and capital deployment remains disciplined, we expect continued progress in leverage and returns over the remainder of the year. With that, I will hand it back to Mr. Zulfikar to walk us through ESG priorities.

Speaker #1: Thank you very much, Fadi. I'd like to take a moment to explain how our sustainability strategy translates into measurable operational and financial outcomes, and how we intend to report progress consistently going forward.

Zulfiqar Hamadani: Thank you very much, Fadi. I'd like a moment to explain how our sustainability strategy translates into measurable operational and financial outcomes, and how we intend to report progress consistently going forward. Our ESG framework begins with three foundational pillars: sustaining people, sustaining agriculture, and sustaining planet. These pillars operate with a strong board and management level governance layers around them. Based on our materiality assessment and after aligning with our corporate strategy, the pillars are further refined into the second layer of eight focus areas covering customer trust, innovation, health and safety, circularity, environment, talent, diversity and inclusion, and corporate culture. The third layer connects specific initiatives to their operational and financial impact.

Zulfiqar Hamadani: Thank you very much, Fadi. I'd like a moment to explain how our sustainability strategy translates into measurable operational and financial outcomes, and how we intend to report progress consistently going forward. Our ESG framework begins with three foundational pillars: sustaining people, sustaining agriculture, and sustaining planet. These pillars operate with a strong board and management level governance layers around them. Based on our materiality assessment and after aligning with our corporate strategy, the pillars are further refined into the second layer of eight focus areas covering customer trust, innovation, health, and safety, circularity, environment, talent, diversity, and inclusion, and corporate culture. The third layer connects specific initiatives to their operational and financial impact.

Speaker #1: Our ESG framework begins with three foundational pillars: sustaining people, sustaining agriculture, and sustaining the planet. These pillars operate with strong board and management-level governance layers around them.

Speaker #1: Based on our materiality assessment, and after aligning with our corporate strategy, the pillars are further refined into a second layer of eight focus areas covering customer trust, innovation, health and safety, circularity, environment, talent, diversity, and inclusion in corporate culture.

Speaker #1: The third layer connects specific initiatives to their operational and financial impact. These include lower fuel costs through LPG conversion, reduced grid costs through solar energy, training and development of our workforce, automation in our operations, and improved water and waste efficiency.

Zulfiqar Hamadani: These include lower fuel costs through LPG conversion, reduced grid costs through solar energy, training and development of our workforce, automation in our operations, and improved water and waste efficiency, reverse osmosis plants, and value creation through waste management and valorization. These initiatives and more are already under implementation and managed through a robust stage gate project management system. Our alternative feed solution using locally sourced ingredients has yielded remarkable results during the trials, and we are working with international partners and regulators to scale it. Sustainability is therefore embedded within our operating model, supporting efficiency, resilience, and financial performance. As the framework develops, we intend to expand the scope and consistency of our reporting. Next. As we close, a word on the market backdrop. Conditions remained challenging in H1. Supply chain costs rose, and while pricing improved against 2025, it stayed volatile across all channels.

Zulfiqar Hamadani: These include lower fuel costs through LPG conversion, reduced grid costs through solar energy, training, and development of our workforce, automation in our operations, and improved water and waste efficiency, reverse osmosis plants, and value creation through waste management and valorization. These initiatives and more are already under implementation and managed through a robust stage gate project management system. Our alternative feed solution using locally sourced ingredients has yielded remarkable results during the trials, and we are working with international partners and regulators to scale it. Sustainability is therefore embedded within our operating model, supporting efficiency, resilience, and financial performance. As the framework develops, we intend to expand the scope and consistency of our reporting. Next. As we close, a word on the market backdrop. Conditions remained challenging in H1. Supply chain costs rose, and while pricing improved against 2025, it stayed volatile across all channels.

Speaker #1: Reverse osmosis plants and value creation through waste management and valorization—these initiatives and more are already under implementation and managed through a robust stage-gate project management system.

Speaker #1: Our alternative feed solution, using locally sourced ingredients, has yielded remarkable results during the trials, and we are working with international partners and regulators to scale it.

Speaker #1: Sustainability is, therefore, embedded within our operating model—supporting efficiency, resilience, and financial performance. As the framework develops, we intend to expand the scope and consistency of our reporting.

Speaker #1: Next, as we close, a word on the market backdrop. Conditions remained challenging in the first half. Supply chain costs rose, and while pricing improved against 2025, it stayed volatile across all channels.

Speaker #1: What has not changed is the direction of consumer demand, which continues to shift towards convenient, healthy, ready-to-cook formats using local ingredients and familiar flavors.

Zulfiqar Hamadani: What has not changed is the direction of consumer demand, which continues to shift towards convenient, healthy, ready-to-cook formats using local ingredients and familiar flavors. Nor has the underlying strength of poultry as the leading protein of choice. Against that backdrop, Tanmiah is well-positioned. Years of targeted investment have strengthened our platform, and disciplined execution is improving unit economics, letting us scale responsibly while protecting profitability even in the challenging market. Our execution stays guided by four pillars: customer-focused commercial excellence, strengthening the core and optimizing the asset base, operational excellence, liquidity, and cost optimization, and digital enablement and our people. Together, these carry us from disciplined execution today towards sustainable margin-led growth with a clear focus on long-term value for our shareholders. Thank you. We are happy to take your questions now.

Speaker #1: Nor has the underlying strength of poultry as the leading protein of choice. Against that backdrop, Tanmiah is well positioned. Years of targeted investment have strengthened our platform, and disciplined execution is improving unit economics.

Speaker #1: Letting us scale responsibly while protecting profitability, even in a challenging market. Our execution stays guided by four pillars: customer-focused commercial excellence; strengthening the core and optimizing the asset base; operational excellence, liquidity, and cost optimization; and digital enablement and our people.

Speaker #1: Together, these carry us from disciplined execution today towards sustainable, margin-led growth with a clear focus on local, long-term value for our shareholders. Thank you. We are happy to take your questions now.

Speaker #3: Thank you, panelists. Ladies and gentlemen, we will now commence with the Q&A session. You may raise your hand to speak with our panelists by pressing the hand icon on your screen.

Fadi Qutishat: Thank you, Dhanus.

Mona Alobeid: Thank you, Dhanus.

Farrukh Khan: Ladies and gentlemen, we will now commence with the Q&A session. You may raise your hand to speak with our panelists by pressing the hand icon on your screen, or alternatively, drop your questions into the Q&A chat box. With that being said, we will, however, prioritize raised hands. Please limit your questions to two at a time so we may cater to all participants. You are more than welcome, however, to join the back of the queue if you have a follow-up. Without further ado, the Q&A session is now open. Our first question comes from the line of Mr. Abdullah Al-Buraii. Mr. Abdullah, please unmute yourself locally and go ahead with your question.

Farrukh Khan: Ladies and gentlemen, we will now commence with the Q&A session. You may raise your hand to speak with our panelists by pressing the hand icon on your screen, or alternatively, drop your questions into the Q&A chat box. With that being said, we will, however, prioritize raised hands. Please limit your questions to two at a time so, we may cater to all participants. You are more than welcome, however, to join the back of the queue if you have a follow-up. Without further ado, the Q&A session is now open. Our first question comes from the line of Mr. Abdullah Al-Buraii. Mr. Abdullah, please unmute yourself locally and go ahead with your question.

Speaker #3: Or alternatively, drop your questions into the Q&A chat box. With that being said, we will, however, prioritize raised hands. Please limit your questions to two at a time so we may cater to all participants.

Speaker #3: You are more than welcome, however, to join the back of the queue if you have a follow-up. Without further ado, the Q&A session is now open.

Speaker #3: Our first question comes from the line of Mr. Abdullah Al-Bureidi. Mr. Abdullah, please unmute yourself locally and go ahead with your question.

Speaker #4: Am I audible?

Abdullah Al-Buraii: Am I audible?

Abdullah Al Buraidi: Am I audible?

Speaker #1: Yes. Yes, we can hear you, Abdullah.

Zulfiqar Hamadani: Yes. Yes, we can hear you, Abdullah.

Speaker #4: Thank you very much. This is Abdullah Al-Bureidi from Emirates NBD Capital. Thank you for the presentation, and congratulations on the very strong results. I have a question regarding the agri-product business.

Abdullah Al-Buraii: Yeah. Thank you very much. This is Abdullah Burayi from Emerson Birdie Capital. Thank you for the presentation. Congrats for the very great results. I have a question regarding the agri-product business. We noticed quite the growth year-over-year of 37.1%. We'd like to segregate the growth in terms of volume and in terms of price, and whether this is a continuous thing or is it simply coming from a gain on the inventory that is held. Do you expect a similar profitability and growth rates on that line of business for the rest of the year, or do you think it's only a one-off?

Abdullah Al Buraidi: Yeah. Thank you very much. This is Abdullah Burayi from Emerson Birdie Capital. Thank you for the presentation. Congrats for the very great results. I have a question regarding the agri-product business. We noticed quite the growth year-over-year of 37.1%. We'd like to segregate the growth in terms of volume and in terms of price, and whether this is a continuous thing or is it simply coming from a gain on the inventory that is held. Do you expect a similar profitability and growth rates on that line of business for the rest of the year, or do you think it's only a one-off?

Speaker #4: We noticed quite the growth year over year of 37.1%. We'd like to break down this growth in terms of volume and in terms of price, and whether this is a continuous trend or if it's simply coming from a gain on the inventory that is held.

Speaker #4: In that, do you expect similar profitability and growth rates on that line of business for the rest of the year, or do you think it's only a one-off?

Speaker #1: So your question is related to the agri-products, the trading items—feed and chicks.

Zulfiqar Hamadani: Your question is related to the agri-products, the trading items-

Zulfiqar Hamadani: Your question is related to the agri-products, the trading items.

Abdullah Al-Buraii: Yeah

Abdullah Al Buraidi: Yeah

Zulfiqar Hamadani: feed and chicks. Okay, yeah.

Speaker #4: Yeah. Yeah.

Speaker #1: Okay, yeah. No, we believe that it's a great business as the market is becoming more and more tight in terms of competition and the imports, etc.

Abdullah Al-Buraii: Yeah.

Abdullah Al Buraidi: Yeah.

Zulfiqar Hamadani: We believe that it's a great business as the market is becoming more and more tight in terms of competition and the imports, et cetera. The producers are becoming more and more conscious of cost management and more efficiency needs to be brought into the operations, which is now not a nice-to-have thing, it's a survival thing. We produce the best or one of the best in the region, day-old chicks, hatching eggs. We represent some of the top companies around the world in animal health products and feed ingredients. Our feed composition and milling is the best. In fact, our feed conversion ratios speak for themselves. We believe that this market is only going to grow and move away from more commodity-like mindset from the producers and come to a more quality-driven market.

Speaker #1: The producers are becoming more and more conscious of cost management, and more efficiency needs to be brought into the operations, which is now not a nice-to-have thing.

Speaker #1: It's a survival thing. We produce the best, or one of the best, day-old chicks and hatching eggs in the region. We represent some of the top companies around the world in animal health products and feed ingredients.

Speaker #1: Our feed composition and milling is the best. In fact, our feed conversion ratios speak for themselves. We believe that this market is only going to grow and move away from a more commodity-like mindset from the producers and shift to a more quality-driven market.

Speaker #1: So, we expect this market to grow and the profitability to keep up with that growth.

Zulfiqar Hamadani: We expect this market to grow and the profitability to keep up with that growth.

Speaker #4: Undoubtedly, but how much of that 37% is volume?

Abdullah Al-Buraii: Undoubtedly. How much of that 37% is volume?

Abdullah Al Buraidi: Undoubtedly. How much of that 37% is volume?

Speaker #1: That Fadi, if you can?

Zulfiqar Hamadani: That, Fadi, if you can

Zulfiqar Hamadani: That, Fadi, if you can.

Speaker #2: So you're talking about fresh poultry? No, DHV.

Fadi Qutishat: You're talking about fresh poultry?

Zulfiqar Hamadani: No, DAP.

Speaker #1: Yeah, the agribusiness growth from a volume perspective was primarily on the feed that they want, chick, which contributed to almost 8% within the first half.

Fadi Qutishat: Yeah. The agri business growth from the volume perspective, primarily on the feed, the day one chick, which contributed to almost 8% within the H1.

Speaker #4: Okay, and so the rest, around 30%, is coming from pricing?

Abdullah Al-Buraii: Okay. The rest of around 30% that is coming from pricing.

Abdullah Al Buraidi: Okay. The rest of around 30% that is coming from pricing.

Speaker #1: Correct. Pricing and volume, because if you compare our poultry business, it grew 7.4% year-on-year, volume-wise.

Fadi Qutishat: Correct. Pricing and volume, because if you compare our poultry business, it grew 7.4% year on year.

Fadi Qutishat: Volume-wise.

Speaker #4: Yeah, okay, okay. That's great. Thank you very much.

Abdullah Al-Buraii: Okay. That's great. Thank you very much.

Abdullah Al Buraidi: Okay. That's great. Thank you very much.

Speaker #1: Yep.

Fadi Qutishat: Yep.

Speaker #3: Thank you. Our next question comes from the line of Jawahar Al-Tahsan. Jawahar, please unmute yourself locally and go ahead with your question.

Farrukh Khan: Thank you. Our next question comes from the line of Jawahir Al-Tassan. Jawahir, please unmute yourself locally and go ahead with your question.

Speaker #5: Thank you, management, for the call. I have two questions. My first question is on poultry pricing. We saw that the average selling prices increased by 5% sequentially and 12% year-over-year.

Jawahir Al-Tassan: Thank you, management, for the call. I have two questions. My first question is on the poultry pricing. We saw that the average selling price is increasing by 5% sequentially and 12% year over year. Can you explain what drove this pricing improvement in terms of the channel mix? If you can comment on the pricing trends in the retail versus the wholesale, and if you can also provide us with the percentage of your poultry sales currently coming from the retail channel.

Jawaher Al-Tassan: Thank you, management, for the call. I have two questions. My first question is on the poultry pricing. We saw that the average selling price is increasing by 5% sequentially and 12% year-over-year. Can you explain what drove this pricing improvement in terms of the channel mix? If you can comment on the pricing trends in the retail versus the wholesale, and if you can also provide us with the percentage of your poultry sales currently coming from the retail channel.

Speaker #5: Can you explain what drove this pricing improvement in terms of the channel mix? If you can, comment on the pricing trends in retail versus wholesale. Also, could you provide us with the percentage of your poultry sales currently coming from the retail channel?

Speaker #1: Marcus?

Zulfiqar Hamadani: Marcus?

Speaker #2: Yes, thank you, Jawahar. I think what we saw here in the poultry market was that we didn't see the market growing prices in all channels.

Fadi Qutishat: Yes. Thank you, Jawahir. I think what we saw here in the poultry market was we didn't see the market growing prices

Marcos Delorenzo: Yes. Thank you, Jawahir. I think what we saw here in the poultry market was we didn't see the market growing prices in all channels. What we saw was a movement that we have done in terms of go-to-market to use our best levers to drive the price increase. One of the levers for us was the GCC, where we found an opportunity. In GCC, we've been establishing our own distribution centers. When you work with a fresh chicken, takes a time for you to develop that. When you develop that and you have opportunity for increasing the price and volumes, you really grab it. We have done that. We have branches well-established in the UAE, in Bahrain, in Kuwait, and now we entered also in Qatar via a partner that's a long-term partner that we had there. All those movements helped you finding better choices and better price opportunities.

Marcos Delorenzo: In all channels. What we saw was a movement that we have done in terms of go-to-market to use our best levers to drive the price increase. One of the levers for us was the GCC, where we found an opportunity. In GCC, we've been establishing our own distribution centers. When you work with a fresh chicken, takes a time for you to develop that. When you develop that and you have opportunity for increasing the price and volumes, you really grab it. We have done that. We have branches well-established in the UAE, in Bahrain, in Kuwait, and now we entered also in Qatar via a partner that's a long-term partner that we had there. All those movements helped you finding better choices and better price opportunities.

Speaker #2: What we saw was a movement that we have made in terms of go-to-market to use our best levers to drive the price increase. One of the levers for us was the GCC, where we found an opportunity.

Speaker #2: We've been in the GCC; we've been establishing our own distribution centers. When you work with fresh chicken, it takes time for you to develop that.

Speaker #2: But when you develop that, and you have the opportunity for increasing the price and volumes, you really grab it. We have done that. We have branches well established in the UAE.

Speaker #2: In Bahrain, in Kuwait, and now we have also entered Qatar via a partner that we've had there for a long time. So all those movements help you find better choices and better price opportunities.

Speaker #2: Another lever I would mention to you is our ability now, as we have 20-plus branches in Saudi Arabia, we are able to move through channels as we see opportunities.

Marcos Delorenzo: Another lever I would mention to you is our ability now, as we have 20 plus branches in Saudi Arabia, we are able to move through channels as we see opportunities. We are able to move from food service into retail and to mini markets and modern trade. We are able to understand what are the best opportunities for us and what will give us a better results. Another level that we've been developing are the new products that are more value-added, and they have a more, let's say, margin resilient products where the prices don't fluctuate too much as you deliver convenience. I think this line of Taste Secrets, it's a full marinated line now with five items there, also deliver that which is a price that support us in results. All those are a combination of go-to-market helping us.

Speaker #2: We are able to move from food service into retail, and to mini markets and modern trade. So we are able to understand what the best opportunities for us are, and what will give us a better result.

Speaker #2: Another level that we've been developing is new products that are more value-added, and they have, let's say, more margin-resilient characteristics, where the prices don't fluctuate too much as you deliver convenience.

Speaker #2: I think this line of these secrets, it's a full marinated line now with five items there. Also, deliver that, which is a price that supports us in results.

Speaker #2: So all those are a combination of go-to-market helping us. We didn't see prices increasing in the market per se. We did see—when you see modern trade—you saw that the frozen prices increased from a very low base, increased because probably a delay into imports.

Marcos Delorenzo: We didn't see prices increasing in the market per se. We did see when you see modern trade, you saw that the frozen prices increased from a very low base, increased because probably a delay into imports, but overall, the fresh market, we saw our movements supporting us and helping us to take that opportunity.

Speaker #2: But overall, in the fresh market, we saw our movements supporting us and helping us to take that opportunity.

Speaker #5: Okay, and how much does retail contribute to the total sales?

Jawahir Al-Tassan: Okay. How much of the retail contributes from the total sales?

Jawaher Al-Tassan: Okay. How much of the retail contributes from the total sales?

Speaker #2: We are very balanced on that, Jawahar. Normally, I don't disclose it, but we are half and half in terms of retail. And when you look at food service and retail, in retail, we have several sub-channels.

Marcos Delorenzo: We are very balanced on that, Johara. We normally don't disclose it, but we are half in terms of retail. When you look food service and retail, in retail, we have several sub-channels. You might ask channels like modern trade, they have also important contribution, but not more than 10% to 12%.

Speaker #2: You might ask about channels like modern trade. They also have an important contribution, but not more than 10 to 12%.

Speaker #5: Okay, and when you mentioned that you haven't really seen pricing increase, what do you mean exactly by that? Because when I track the retail channel across all the supermarkets, we've seen improvement in the retail channel versus Q1 in terms of the poultry prices across all the poultry companies.

Jawahir Al-Tassan: Okay. When you mentioned that you haven't really seen pricing increase, what do you mean exactly by that? Because when I track the retail channel across all the supermarkets, we've seen improvement in the retail channel versus Q1 in terms of the poultry prices across all the poultry companies. Is it because the wholesale hasn't improved much so that the total average haven't recovered? What do you mean exactly?

Jawaher Al-Tassan: Okay. When you mentioned that you haven't really seen pricing increase, what do you mean exactly by that? Because when I track the retail channel across all the supermarkets, we've seen improvement in the retail channel versus Q1 in terms of the poultry prices across all the poultry companies. Is it because the wholesale hasn't improved much so that the total average haven't recovered? What do you mean exactly?

Speaker #5: So is it because the wholesale hasn't improved much, so that the total average hasn't recovered, or what do you mean exactly?

Speaker #1: Look, Jawahar, when you look at retail—when I track the same, and I use news in the retail audit—you probably have access as well.

Marcos Delorenzo: Look, Johara, when you look for the retail, when I track the same and I use Nielsen Retail audit that you probably have access as well, when you look at the fresh market, prices increased by 2% maximum. This is in the fresh segment. When you look into the frozen segment, there was an increase of two digits in price. That frozen has a gap to fresh. There was an opportunity to frozen, in those channel, but those are at a lower prices than fresh. When you compare this data on average trended line, this is what happened to the modern trade. Of course, the wholesaler that is more subjected to frozen sales, it did face a price increase. I remind you, those price of frozen are below fresh prices.

Speaker #1: When you look at the fresh market, prices increased by 2% maximum, and this is in the fresh segment. When you look at the frozen segment, there was an increase of double digits in price.

Speaker #1: But that frozen has a gap to fresh, and so there was an opportunity for frozen in those channels. But those are at lower prices than fresh.

Speaker #1: So, when you compare this data on the average trended line, this is what happened to the modern trade. Of course, the wholesaler that is more subjected to frozen sales didn't face a price increase.

Speaker #1: But I remind you, those prices of frozen are below fresh prices. You know our focus in Tanmiah has always been to have the maximum optimization in fresh prices, which demands the distribution.

Marcos Delorenzo: You know our focus in Tanmiah has been always to have the maximum optimization into fresh prices, which demands the distribution, and you are able to have a higher price. This is what happened in the last months, in terms of the channels. There was a, let's say, a delay of some imports that impacted the frozen market and gave some opportunity to the frozen market. Is it clear?

Speaker #1: And you are able to have a higher price. So this is what happened in the last months in terms of the channels. But there was, let's say, a delay or some imports that impacted the frozen market and gave some opportunity in the frozen market.

Speaker #1: Is it clear?

Jawahir Al-Tassan: Very clear. Yes, that's clear. I just have a follow-up question on the volumes. We saw volumes declining by around 2% sequentially. I recall, in Q1, you mentioned that you had strategically frozen part of your production, which was expected to be sold in Q2, particularly to export markets and the local market. Can you explain why volumes were still down Q over Q, especially that you have already increased your capacity in 2026, and that should at least increase given the ramp-up phase? I would really appreciate your answer here.

Jawaher Al-Tassan: Very clear. Yes, that's clear. I just have a follow-up question on the volumes. We saw volumes declining by around 2% sequentially. I recall, in Q1, you mentioned that you had strategically frozen part of your production, which was expected to be sold in Q2, particularly to export markets and the local market. Can you explain why volumes were still down Q over Q, especially that you have already increased your capacity in 2026, and that should at least increase given the ramp-up phase? I would really appreciate your answer here.

Speaker #5: Very clear. Yes, that's clear. I just have a follow-up question on the volumes. So, we saw volumes declining by around 2% sequentially. And I recall in Q1, you mentioned that you had strategically frozen part of your production, which was expected to be sold in Q2.

Speaker #5: Particularly with respect to export markets and the local market—can you explain why volumes were still down quarter over quarter, especially since you have already increased your capacity in Q2 2026? That should have at least resulted in an increase, given the ramp-up phase.

Speaker #5: I would really appreciate your answer here.

Speaker #2: Thank you so much, Jawahar. So, in terms of volumes, we continue our ramp-up of production. We didn't decrease any production. We achieved, as we mentioned in our initial part, around 605,000 birds per day.

Marcos Delorenzo: Thank you so much, Johara. In terms of volumes, we continue our ramp-up of production. We didn't decrease any production. We achieved, as we mentioned on our initial part, around 605,000 birds per day. We are working as more farms are arriving, we continue to do that ramp-up of our facilities as well as the feed mill that is arriving for us, as well as the new hatchery, the mega hatchery that will be available soon. All that will continue our trajectory of ramp-up. When you look at Q1 to Q2, yes, there was this 2% decrease. We didn't decrease anything. Of course, in the Q2, you had two Eids on that quarter. If you look, the difference between our Q1 to Q2 was around 1 million birds.

Speaker #2: And we are working as more farms are arriving, we continue to do that ramp-up of our facilities as well as the feed mill that is arriving for us, as well as the new hatchery, the mega hatchery that is will be available soon.

Speaker #2: All that will continue our trajectory of ramp-up. So when you look at Q1 to Q2, yes, there was this 2% decrease. We didn't decrease anything.

Speaker #2: Of course, in Q2, you had two EATs in that quarter. So if you look at the difference between our Q1 and Q2, it was around 1 million birds.

Speaker #2: And mainly, this is attributed to those holidays when the market also had a holiday, and we also gave the holiday. And a half day of inventory increase in terms of frozen products that we have done.

Marcos Delorenzo: Mainly this is attributed for those holidays that the market also had the holiday, and we also gave the holiday. Half day of inventory increase in terms of frozen products that we have done. In summary, we continue our trajectory of growth, and we just subject it to the new assets arriving, which will allow us to use them and capitalize them.

Speaker #2: So, in summary, we continue our trajectory of growth, and we are just subject to the new assets arriving, which will allow us to use them and capitalize on them.

Speaker #5: That was clear.

Jawahir Al-Tassan: That was clear.

Jawaher Al-Tassan: That was clear.

Speaker #2: Thank you so much for your questions.

Marcos Delorenzo: Thank you so much for your questions.

Speaker #3: Thank you, Jawahar, and thank you, panelists. Our next question comes from the line of Nadar Abdul Malik. Nadar, please unmute yourself locally and go ahead with your questions.

Jawahir Al-Tassan: Thank you.

Jawaher Al-Tassan: Thank you.

Jawahir Al-Tassan: Thank you, Jawahir, and thank you, panelists. Our next question comes from the line of Nada Al-Malik. Nada, please unmute yourself locally and go ahead with your questions. Nada, you are unmuted, but we cannot hear you. Can you make sure that your connection is working? Okay, Nada, I believe there is some technical issue at your end. We will go to our next participant. You can join the back of the queue. The next question comes from the line of Doha AlFadl. Doha, please unmute yourself locally and go ahead with your question.

Farrukh Khan: Thank you, Jawahir, and thank you, panelists. Our next question comes from the line of Nada Al-Malik. Nada, please unmute yourself locally and go ahead with your questions. Nada, you are unmuted, but we cannot hear you. Can you make sure that your connection is working? Okay, Nada, I believe there is some technical issue at your end. We will go to our next participant. You can join the back of the queue. The next question comes from the line of Doha AlFadl. Doha, please unmute yourself locally and go ahead with your question.

Speaker #3: Now you are unmuted, but we cannot hear you. Can you make sure that your connection is working? Okay, Nadar, I believe there is some technical issue at your end.

Speaker #3: We will go to our next participants. You can join the back of the queue. The next question comes from the line of Dua Al-Fada. Dua, please unmute yourself locally and go ahead with your question.

Speaker #5: Hi, am I audible?

Doha AlFadl: Hi, am I audible?

Duaa AlFadda: Hi, am I audible?

Speaker #3: Yes.

Marcos Delorenzo: Yes.

Speaker #1: Yes, Dora.

Farrukh Khan: Yes, Doha.

Speaker #5: Assalamu alaikum. I have a general question about the prices of poultry. Have you seen any changes in prices, specifically regarding the magnitude of discounts?

Doha AlFadl: As-salamu alaykum. I have a general question just on the prices of poultry. Have you seen any changes in the prices, specifically the magnitude of discounts?

Duaa AlFadda: As-salamu alaykum. I have a general question just on the prices of poultry. Have you seen any changes in the prices, specifically the magnitude of discounts?

Speaker #2: As I mentioned before, in the answer to Jawahar, we didn't see an increase in the fresh prices. We didn't see this happening in the last few months.

Marcos Delorenzo: As I mentioned before in the answer to Jawahir, we didn't see an increase in the fresh prices. We didn't see this happen in the last few months. The minimum increase that happened in modern trade. We saw an increase in the frozen imported chicken that probably due for some delays on an arrival of those products, but not on the fresh segment.

Speaker #2: The minimum increase that happened in modern trade, but we saw an increase in the frozen imported chicken. That was probably due to some delays in the arrival of those products.

Speaker #2: But not on the fresh segment.

Speaker #5: Okay. Is there an oversupply of imported chicken?

Doha AlFadl: Okay. Is there an oversupply of imported chicken?

Duaa AlFadda: Okay. Is there an oversupply of imported chicken?

Speaker #2: You know that we've been working for the last years with the frozen products available in the market. We do understand that MEWA and the government are very aware when there is an unbalance in terms of supply and demand.

Marcos Delorenzo: You know that we've been working from the last years with the frozen products available in the market. We do understand that MEWA and the government is very aware when there is an unbalance in terms of supply and demand. We don't see this situation getting worse than previous years we had work with. We have established ourselves a maximum ability to mitigate any unbalance on those volumes. We do understand that if too much volumes are coming imported, this impacts the pressure in the market and ability of several companies to live with that. We have prepared ourself as maximum to mitigate that with choices, with go-to-market, with clients and channels. Of course, if that happens, we will be monitoring, and we continue engage with the government for the balancing of that.

Speaker #2: We don't see this situation getting worse than in previous years we have worked with. We have established ourselves with a maximum ability to mitigate any imbalance in those volumes.

Speaker #2: We do understand that if too much volume is imported, this impacts the pressure in the market and the ability of several companies to live with that.

Speaker #2: We have prepared ourselves as much as possible to mitigate that with choices, with go-to-market, with clients and channels. But of course, if that happens, we will be monitoring and we will continue to engage with the government for the balancing of that.

Speaker #5: Okay, clear. And if I may, last question on the utilization: What’s the targeted utilization for 2026? Because there was a massive drop in utilization for 2025 post the expansion in capacity.

Doha AlFadl: Okay, clear. If I may, last question on the utilization. What's the targeted utilization for 2026? Because there was a massive drop in the utilization for 2025 post the expansion and capacity.

Duaa AlFadda: Okay, clear. If I may, last question on the utilization. What's the targeted utilization for 2026? Because there was a massive drop in the utilization for 2025 post the expansion and capacity.

Speaker #1: So our target, when you look at the average birds per day, we are currently running at 604. So we will ramp up as Marcos mentioned earlier.

Zulfiqar Hamadani: Our targets, when you look at the average birds per day, we are currently running at 604. We will ramp up, as Marcos mentioned earlier, it's a whole entire ecosystem from farms, feed mill, hatchery, and the slaughterhouse. We do have the slaughterhouse up to 800,000 per day today. As these farms are available, tested, and ready to come online, we will bring them online. We do have a plan this year to include some of those new farms and ramp up that capacity to a certain level. We'll be more than happy to share that as those assets come online soon.

Speaker #1: It's a whole entire ecosystem—from farms, feed mill, hatchery, to the slaughterhouse. We have the slaughterhouse running at up to 800,000 per day today.

Speaker #1: And as these farms are available, tested, and ready to come online, we will bring them online. And we do have a plan this year to include some of those new farms and ramp up that capacity to a certain level.

Speaker #1: We'll be more than happy to share that as those assets come online soon.

Speaker #5: Okay, clear. Thank you so much.

Doha AlFadl: Okay, clear. Thank you so much.

Duaa AlFadda: Okay, clear. Thank you so much.

Speaker #1: Thank you.

Zulfiqar Hamadani: Thank you.

Speaker #3: Thank you. Our next question comes from the line of Nadar Abdul Malik. Nadar, please unmute yourself locally and go ahead with your question.

Marcos Delorenzo: Thank you.

Farrukh Khan: Our next question comes from the line of Nada Al-Malik. Nada, please unmute yourself locally and go ahead with your question. Nada, we cannot hear you. Nada, you can unmute yourself locally and go ahead with your question.

Speaker #1: Nadar, we cannot hear you.

Speaker #3: Nadar, you can unmute yourself locally and go ahead with your question.

Nada Al-Malik: Yes. Can you hear me now?

Nada Alwardi: Yes. Can you hear me now?

Speaker #5: Yes, can you hear me now?

Speaker #2: Yes.

Farrukh Khan: Yes.

Speaker #3: Yes, please.

Marcos Delorenzo: Yes, please.

Speaker #5: Yes, thank you, gentlemen, for the call and congrats on these very strong results. I have two questions from my end. The first one on Baba's.

Nada Al-Malik: Yes. Thank you, gentlemen, for the call, and congrats on this very strong results. I have two questions from my end. The first one on Popeyes. If I look at Popeyes results on Q-over-Q basis, honestly, if I look at the revenue more or less it's flat, only increased by 2%. However, if I look at the losses, you've been able to do a very great job to minimize the losses from SAR 12 million to almost SAR 6 million in this quarter. My question, is there any seasonality when it comes to the OpEx or the raw material happened in Q2? Because I understand the seasonality when it comes to Ramadan, but that should impact also the sales. But sales on a Q-to-Q, almost flat. Yet the losses have improved big time. My second question is.

Nada Alwardi: Yes. Thank you, gentlemen, for the call, and congrats on this very strong results. I have two questions from my end. The first one on Popeyes. If I look at Popeyes results on Q-over-Q basis, honestly, if I look at the revenue more or less it's flat, only increased by 2%. However, if I look at the losses, you've been able to do a very great job to minimize the losses from SAR 12 million to almost SAR 6 million in this quarter. My question, is there any seasonality when it comes to the OpEx or the raw material happened in Q2? Because I understand the seasonality when it comes to Ramadan, but that should impact also the sales. But sales on a Q-to-Q, almost flat. Yet the losses have improved big time. My second question is.

Speaker #5: If I look at Baba's results on a quarter-over-quarter basis, honestly, if I look at the revenue, revenue is more or less flat—only increased by 2%.

Speaker #5: However, if I look at the losses, you've been able to do a very great job to minimize the losses from 12 million to almost 6 million.

Speaker #5: And this quarter, so my question: Is there any seasonality when it comes to the OPEX or the raw material that happened in Q2? Because I understand the seasonality when it comes to Ramadan, but that should also impact the sales.

Speaker #5: But sales on Q-to-Q are almost flat, yet the losses have improved big time. And my second question is, yes,

Fadi Qutishat: Thank you.

Nada Al-Malik: Yes.

Nada Alwardi: Yes.

Speaker #1: Oh, go ahead. Go ahead with the second question.

Fadi Qutishat: No, go ahead. Go ahead with the second question.

Speaker #5: Yeah, my second question is on poultry prices. We have heard that at the beginning of Q3, there was some normalization in poultry prices; actually, they went down by 10%.

Nada Al-Malik: Yeah. My second question is on poultry prices. We have heard that beginning of Q3, there is some normalization on the poultry prices. Actually, it went down by 10% on the retail side. Have you witnessed this? What is your expectation when it comes to the prices for Q3?

Nada Alwardi: Yeah. My second question is on poultry prices. We have heard that beginning of Q3, there is some normalization on the poultry prices. Actually, it went down by 10% on the retail side. Have you witnessed this? What is your expectation when it comes to the prices for Q3?

Speaker #5: On the retail side, have you witnessed this? What are your expectations when it comes to prices for Q3?

Speaker #1: Very good. So let me tackle the first question, which is related to Papa's seasonality. We don't have any seasonality in terms of OPEX or cost structure in Q2 versus Q1.

Fadi Qutishat: Very good. Let me tackle the first question, which is related to Popeyes seasonality. We don't have any seasonality in terms of OpEx or cost structure in Q2 versus Q1. It's the deliberate execution from management. Also, as you probably saw, we've targeted a lot of different campaigns during Eid, during holiday season, and those were consistently targeting those customers with a local flavor. Alhamdulillah, those marketing campaign paid dividends, and it helped us achieve that EBITDA positive for Q2. We expect to continue that momentum as we ramp up the like for like performance for those new stores that we've added last year, the performance continue to improve. On regarding the poultry prices, we are seeing a normalization in Q3, and I'll hand it over to Marcos to add a little bit more color.

Speaker #1: It's the deliberate execution from management. Also, as you probably saw, we've targeted a lot of different campaigns during Eid and during the holiday season, and those were consistently targeting those customers with the local flavor.

Speaker #1: So, Alhamdulillah, those marketing campaigns paid dividends, and it helped us achieve that EBITDA positive for the second quarter. We expect to continue that momentum.

Speaker #1: As we ramp up the like-for-like performance for those new stores that we added last year, the performance continues to improve. Regarding poultry prices, we are seeing a normalization in Q3.

Speaker #1: And I'll hand it over to Marcus to add a little bit more color.

Speaker #2: Okay. I think what we see here, Nadar, when you say that you saw that decrease, is mainly in the frozen market. So, when you look at the frozen market—which is driven a lot by imported chicken, which drives that volume—you had a situation in Q2, the second quarter, where there was a delay in the arrivals of these products because of the war.

Marcos Delorenzo: Okay. I think what we see here, Nada Al-Malik, when you say that you saw that decrease, is mainly in the frozen market. When you look at the frozen market, which is driven a lot from the imported chicken, which drives that volume, you had a situation on Q2 where there was a delay into arrivals of these products because of the war, and there was a movement in price for frozen. This is what you have seen on that. We, as you know, we are not exposed as much for frozen, but if frozen prices go too much low, for sure there are consumers that eventually migrate between fresh and frozen. In that moment, it can generate a pressure for us, and this is what might create a pressure.

Speaker #2: And there was a movement in price for frozen. So this is what you have seen on that. As you know, we are not exposed as much to frozen, but if frozen prices go too low, for sure, there are consumers that eventually migrate between fresh and frozen.

Speaker #2: In that moment, it can generate a pressure for us, and this is what, in my view, creates a pressure. But we've been dealing with that for the last many years.

Marcos Delorenzo: We've been dealing with that for the last many years, and we'll try to mitigate as much as possible. This might happen, as you understand.

Speaker #2: And we'll try to mitigate as much as possible, but this might happen, as you understand.

Speaker #5: Yeah, very clear. Just back to Papa's—what is the targeted timeline when it comes to break-even? Do you expect it to happen?

Nada Al-Malik: Yeah. Very clear. Just back to Popeyes. What is the targeted timeline when it comes to the break even? Do you expect it to happen, for example, the H1 of next year?

Nada Alwardi: Yeah. Very clear. Just back to Popeyes. What is the targeted timeline when it comes to the break even? Do you expect it to happen, for example, the H1 of next year?

Speaker #5: For example, next, the first half of next year?

Speaker #1: On net profit level?

Fadi Qutishat: On net profit level, Nada Al-Malik?

Speaker #5: Yes. Yeah.

Nada Al-Malik: Yes. Yeah.

Nada Alwardi: Yes. Yeah.

Speaker #1: So, we gave guidance previously that we would achieve EBITDA positive by the end of 2026. Alhamdulillah, we've achieved that, and we are on target in terms of EBITDA positive ahead of the scheduled time, which we communicated would be Q4 2026.

Fadi Qutishat: We gave guidance previously that we will achieve EBITDA positive by end of 2026. Alhamdulillah, we've achieved that, and we are on target in terms of EBITDA positive ahead of the scheduled time, which we've communicated that will be Q4 2026, and now we've executed that in Q2 2026. We do have plans to start net profit positive in 2027.

Speaker #1: And now we've executed that in Q2 2026. We do have plans to start being net profit positive in 2027.

Speaker #5: Very clear. Thank you, gentlemen. All the best.

Nada Al-Malik: Very clear. Thank you, gentlemen. All the best.

Nada Alwardi: Very clear. Thank you, gentlemen. All the best.

Speaker #1: Thank you.

Fadi Qutishat: Thank you.

Speaker #3: Thank you, Nadar. Thank you, panelists. I will now take a few questions from the chat box. You can ignore questions that have already been answered.

Marcos Delorenzo: Thank you.

Farrukh Khan: Thank you, Nada. Thank you, panelists. I will now take a few questions from the chat box. You can ignore questions that have already been answered. The first question comes from Mr. Taha Khan Javed. Why was there a Q-on-Q decline in volumes for the second consecutive quarter in Q2 2026? Question two, we have seen some pressure in poultry prices for both imported and local poultry prices. Why is this the case? I believe a lot is answered, but please go ahead if you have any comments on these questions.

Speaker #3: So, the first question comes from Mr. Taha Khan Javed: Why was there a quarter-on-quarter decline in volumes for the second consecutive quarter, and in Q2 2026?

Speaker #3: And question two, we have seen some pressure in poultry prices for both imported and local poultry. Why is this the case? I believe a lot has been answered, but please go ahead if you have any comments on these questions.

Speaker #1: I think both questions were addressed by Marcus. On the volume—yep.

Fadi Qutishat: I think both questions were addressed by Marcos, on the volume and on the poultry prices. Yep.

Speaker #3: We can move to the second question in the chat box from Osama Mawad. You highlighted a structural shift in consumer demand towards convenient and ready-to-cook products.

Farrukh Khan: We can move to the second question in the chat box from Usama Mewad. You highlighted a structural shift in consumer demand towards convenient and ready-to-cook products. Are you seeing this translate into higher margins or better growth compared with your traditional poultry products? How significant could this category become in your revenue mix?

Speaker #3: Are you seeing this translate into higher margins or better growth compared with your traditional poultry products? And how significant could this category become in your revenue mix?

Speaker #1: So I'll give you a little bit of flavor in terms of the slide where we talked about the agribusiness for the first half. On the bottom of that slide, we shared year-on-year growth for the Taste Secret line of 115% growth.

Fadi Qutishat: I'll give you a little bit of flavor in terms of the slide where we talked about the agribusiness for the H1. On the bottom of that slide, we shared year-on-year growth for the Taste Secrets line of 115% growth. The new breaded lines that we've launched in December, these are growing 84% quarter-over-quarter. The trajectory of this business is really positive, and we continue to invest money in value-added products

Speaker #1: And the new braided lines that we launched in December are growing 84% quarter over quarter. So, the trajectory of this business is really positive.

Speaker #1: And we continue to invest money in value-added products. And I'll add—maybe Marcus, if you have anything else to add.

Zulfiqar Hamadani: I'll add, maybe Marcos, if you have anything else to add.

Speaker #3: Of course, those categories, thank you for I think those categories the objective for them is to bring more convenience and for consumers. By having those convenience and flavor, as you see a lot of those value-added are not commoditized products.

Marcos Delorenzo: Of course, those categories, thank you, Fadi. I think those categories, the objective for them is to bring more convenience for consumers. By having those convenience and flavor, as you see, a lot of those value adds are not commoditized products. They have R&D, they have research behind it and so on, so forth. We've been very successful, and we're very happy with the results we had so far. We are, of course, scaling them more, getting more capacities on those items as well. They deliver, and they should constantly deliver better margins. Of course, you have a moment where you list those products, where you distribute, that you invest, but then they generate better results. We have, as Fadi mentioned, a very strong pipeline going ahead. We did a pipeline of three years, but for the last six months, we already have everything being worked and under process.

Speaker #3: They have R&D, they have research behind it, and so on and so forth. So, we've been very successful. We're very happy with the results we've had so far.

Speaker #3: We are, of course, scaling them more and getting more capacities on those items as well. They should deliver better margins. Of course, you have a moment where you list those products, where you distribute, and where you invest.

Speaker #3: But then, they should generate better results. We have, as Fadi mentioned, a very strong pipeline going ahead. We did a pipeline for three years.

Speaker #3: But for the last six months, we already have everything being worked on and under process. So all those, they go through several channels—not only for retail; they go for food service, they go for catering, they go for different clients.

Marcos Delorenzo: All those, they go for several channels, not only for retail. They go for foodservice, they go for catering, they go for different clients, and they should add value for those clients. That's why we believe, together with Fadi and Zouk, that those will be very important in our future, and we are nurturing them now to grow.

Speaker #3: And they should add value for those clients. So that's why we believe, together with Fadi and Zufka, that these will be very important in our future.

Speaker #3: And we are nurturing them now to grow.

Zulfiqar Hamadani: Thank you.

Fadi Qutishat: Thank you.

Speaker #1: Thank you.

Speaker #3: The next question comes from Mr. Aneel Kamar. Hello, and many thanks for the opportunity. Would you be able to provide more color on the profitability of the fresh poultry segment, both on a quarter-on-quarter and year-on-year basis?

Farrukh Khan: Next question comes from Mr. Anil Gover. Hello, many thanks for the opportunity. Would you be able to provide more color on profitability of fresh poultry segment, both on Q&Q and year-on-year basis?

Speaker #1: So, yeah. The profitability for the agribusiness, as we walked you through earlier, on the revenue side grew 13.3%. Net income, despite being lower than the first half of last year, for the second quarter itself is up 7.9% on the revenue side.

Fadi Qutishat: So-

Zulfiqar Hamadani: So. Fadi?

Fadi Qutishat: Fadi?

Fadi Qutishat: Yeah. The profitability for the agribusiness, as we walked you through earlier, revenue side grew 13.3%. The net income, despite that it's lower than the H1 of last year, the Q2 itself, it's up 7.9% on the revenue side and almost 1,785% on the net income side, because Q1, we reported negative 1.1, and now for the Q2, we are reporting amazing results.

Speaker #1: And almost 1,785% on the net income side, because in Q1 we reported negative 1.1, and now for the second quarter, we are reporting amazing results.

Speaker #3: Okay, next question is regarding Saudi GAP. So regarding the Saudi GAP certification requirement for poultry imports, our understanding is that the grace period for foreign poultry suppliers was expected to end in March 2026.

Farrukh Khan: Okay. Next question is regarding Saudi GAP. Regarding the Saudi GAP certification requirement for poultry imports, our understanding is that the grace period for foreign poultry suppliers was expected to end in March 2026. Has this requirement now been fully implemented for poultry exporters to Saudi Arabia, or has the grace period been extended?

Speaker #3: Has this requirement now been fully implemented for poultry exporters to Saudi Arabia, or has the grace period been extended?

Speaker #1: Here, the grace period has been extended. It was not fully implemented—the grace period has been extended. But there are certain other measures which have been taken.

Zulfiqar Hamadani: Here, the grace period has been extended. It was not fully implemented. The grace period has been extended, but there are certain other measures which have been taken to check the imports. We are moving, although a bit slowly, but we are moving in the right direction. Of course, the geopolitical situation and the sudden closure of waterways also prompted the government to, there were other priorities, understandably so. It has been extended by a year, but other things like the licensing and the new approvals, et cetera, that is something which is in place and is having the positive impact on the market.

Speaker #1: To check the imports, so we are moving, although a bit slowly, but we are moving in the right direction. Of course, the geopolitical situation and the sudden closure of waterways also prompted the government to—there were other priorities.

Speaker #1: Understandably so. So it has been extended by a year. But other things like the licensing and the new approvals, etcetera, that is something which is in place.

Speaker #1: And it is having a positive impact on the market.

Speaker #3: Next question is: What will be the incremental annual depreciation and interest expense going to the P&L once the mega hatchery and feed mill are live in H2?

Farrukh Khan: Next question is, what will be the incremental annual depreciation and interest expense flowing to the P&L once the mega hatchery and feed mill are live in H2? What utilization rate do you need before these assets are earning above cost of capital?

Speaker #3: What utilization rate do you need before these assets are earning above the cost of capital?

Speaker #1: So the question is on the ramp-up of those assets and when they will start earning at fully utilized rates. So, in terms of...

Zulfiqar Hamadani: The question is on the ramp-up of those assets and when they will start earning at fully utilized rates.

Fadi Qutishat: The question is on the ramp-up of those assets and when they will start earning at fully utilized rates.

Speaker #3: Question is on yeah.

Farrukh Khan: The question is on

Zulfiqar Hamadani: Yeah, go ahead.

Fadi Qutishat: Yeah, go ahead.

Speaker #1: Go ahead.

Speaker #3: Yes, please. Please do it.

Farrukh Khan: Yes, please. Please go ahead.

Speaker #1: So, in terms of the feed mill, that's expected to go live in Q3. As you know, the process of increasing capacity doesn't happen overnight; it's a process, from end-to-end procurement to production.

Zulfiqar Hamadani: In terms of feed mill, that's expected to go live in Q3. As you know, the process of increasing capacity doesn't happen overnight. It's a process in terms of end-to-end procurement to production, to how you can optimize that cost to produce. We expect feed mill to have good momentum in terms of capacity realization by year-end. That ramp-up phase and plan is already in place. This is more of a strategic play that we've communicated in Q1, where we've increased grain buy-in, et cetera. We do need that storage and the production to ramp up in Q3 and Q4. That's not going to be a concern for us.

Fadi Qutishat: In terms of feed mill, that's expected to go live in Q3. As you know, the process of increasing capacity doesn't happen overnight. It's a process in terms of end-to-end procurement to production, to how you can optimize that cost to produce. We expect feed mill to have good momentum in terms of capacity realization by year-end. That ramp-up phase and plan is already in place. This is more of a strategic play that we've communicated in Q1, where we've increased grain buy-in, et cetera. We do need that storage and the production to ramp up in Q3 and Q4. That's not going to be a concern for us.

Speaker #1: To how you can optimize that cost to produce. We expect the feed mill to have good momentum in terms of capacity realization by year end.

Speaker #1: That ramp-up phase and plan is already in place, and this is more of a strategic play that we've communicated in the first quarter, where we've increased grain buy-in, et cetera.

Speaker #1: So we do need that storage and the production to ramp up in the third and fourth quarters, so that's not going to be a concern for us.

Speaker #1: On the hatchery side, that's probably more of a 2027 utilization expectation to improve, since that's going to be mostly online toward the end of the year.

Zulfiqar Hamadani: On the hatchery side, that's probably more of a 2027 utilization expectations to improve, since that's going to be mostly online toward the end of the year, with the hope that all the parts and everything is available and connected by then.

Fadi Qutishat: On the hatchery side, that's probably more of a 2027 utilization expectations to improve, since that's going to be mostly online toward the end of the year, with the hope that all the parts and everything is available and connected by then.

Speaker #1: With the hope that all the parts and everything are available and connected by then.

Speaker #3: Thank you. We will take questions from Mr. Asmar Shams. Mr. Asmar, please limit your question to one. You are unmuted. Please go ahead with your question.

Farrukh Khan: Thank you. We will take a question from Mr. Asmar Shams. Mr. Asmar, please limit your question to one. You are unmuted. Please go ahead with your question.

Speaker #4: Asmar here from BSF Capital. I'd like to ask, did you see any impact of higher shipping costs of raw materials in Q2? Or did you mainly utilize older raw material inventory?

Asmar Shams: Asmar here from BFS Capital. I'd like to ask, did you see any impact of higher shipping costs of raw materials in Q2, or did you mainly utilize older raw material inventory? If you could also please talk about how you're managing your current raw material purchases given that both waterways have been disrupted in Q3. Thank you.

Speaker #4: And if you could also please talk about how you're managing your current raw material purchases, given that both waterways have been disrupted in the third quarter.

Speaker #4: Thank you.

Speaker #1: Thank you, Asmar. It's definitely part of Q2 cost that we've seen, and it's already in our P&L. And it's communicated on the bridge, where you have inflationary cost versus the prior quarter and versus last year as well.

Fadi Qutishat: Thank you, Asmar. It's definitely part of Q2 cost that we've seen, it's already in our P&L, it's communicated on the bridge where you have inflationary cost versus prior quarter and versus last year as well. That inflation is hitting us as we speak, we are working on the controllables of what we can do to offset those costs and mitigate them. I hope that answered the question.

Speaker #1: So that inflation is hitting us as we speak, and we are working on the controllables—on what we can do to offset those costs and mitigate them.

Speaker #1: I hope that answered the question.

Speaker #3: Thank you. All right, ladies and gentlemen, that marks the final question for our session. If there are any unresolved queries, you are more than welcome to reach Tanmiah's IR team via the email shared.

Farrukh Khan: Thank you. All right, ladies and gentlemen, that marked the final question for our session. If there are any unresolved queries, you are more than welcome to reach Tanmiah's IR team via their email shared. On behalf of Aljazira Capital, I'd like to extend our sincere thanks to the management and participants for taking the time for the call. I will now hand back the mic to the management for any closing remarks.

Speaker #3: On behalf of Al Jazeera Capital, I'd like to extend our sincere thanks to the management and participants for taking the time to join the call.

Speaker #3: I will now hand back the mic to management for any closing remarks.

Speaker #1: Thank you, Al Jazeera. Thank you very much. Yeah, thank you. Thanks a lot to all the participants. We remain available for answering any queries that are there or may come up later.

Fadi Qutishat: Thank you, Aljazira.

Zulfiqar Hamadani: Thank you very much. Thank you. Thanks a lot for all the participants. We remain available for answering any queries which are there or may come up later. Please contact our investor relations team. Thank you very much for everyone. Have a great evening.

Speaker #1: So, please contact our Investor Relations team. And thank you very much, everyone. Have a great evening. Thank you.

Fadi Qutishat: Thank you.

Speaker #3: Thank you, everyone. The meeting is now over and you may exit the call.

Farrukh Khan: Thank you, everyone. The meeting is now over. You may exit the call.

Speaker #1: Thank you.

Asmar Shams: Thank you.

Farrukh Khan: Thank you.

Speaker #2: This webinar is no longer being recorded.

Operator 1: This webinar is no longer being recorded.

[Video Narrator]: This webinar is no longer being recorded. This webinar is being transcribed and summarized. Thanks for using Webex. Visit our website at www.webex.com.

Speaker #5: This webinar is being transcribed and summarized.

Nada Al-Malik: This webinar is being transcribed and summarized.

Operator 1: Thanks for using Webex. Visit our website at www.webex.com.

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Q2 2026 Tanmiah Food Co Earnings Call

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