Half Year 2026 Musandam Power Co SAOG Earnings Call
Noor Mohammed Al Wahaibi: Welcome our dear subscribers. God willing, today we will have a discussion session with you. Some of the directors will answer your questions. I am Noor Mohammed Al Wahaibi, Compliance Officer at the hospital, Chief Executive Officer of Mashroor Al Yarooni, Support Manager at Nahrain Al Kharusi, and from the financial department we have Mathoo Chetan. From the technical department we have Mahmood Al Saadi, Engineer Operations. Let us start by answering your questions and inquiries. We will start with a small presentation about the company. We start with Mahmood. Hello, everyone. Welcome in this session. Inshallah, today we will take your questions. We have here myself, Noor Mohammed Al Wahaibi, the Compliance Officer, our CEO, Murshid Al-Yarubi, the Business Support Manager, Nahrain Al Kharusi, from technical department, Mahmood Al Saadi, and from finance department, Mathoo Chetan.
Speaker #1: Musandam Power Q3 and Q4. Insha'Allah, we'll be with you for this talk, presenting some figures that will answer questions from you. الرئيس التنفيذي مرشد العربي، مسؤول الدعم المؤسسي نهرين الفاروسي، والمالية معنا مدحت شيكن، ومن قسم التكنيكال معنا محمود السعدي، مهندس عمليات أول.
Speaker #1: نبدأ بسم الله مع استفساراتكم وأسئلتكم. سنبدأ بعد العرض القصير عن الشركة. Hello everyone, welcome to this session. Insha'Allah, today we'll take your questions, and we have here myself, Nour El Wahedi, the Compliance Officer, and our CEO, مرشد العربي.
Noor Wahaibi: [Foreign language] Hello, everyone. Welcome in this session. Inshallah, today we will take your questions. We have here myself, Noor Wahaibi, the Compliance Officer, our CEO, Murshid Al-Yarubi, the Business Support Manager, Nahrain Al Kharusi, from technical department, Mahmood Al Saadi, and from finance department, Madhuchethan.
Speaker #1: The Support Manager, نهرين الفاروسي; our Technical Department, محمود السعدي; and from the Finance Department, مدحت شيكن. We'll start with a small presentation and a module that will explain this. Welcome to the discussion session on the unlimited financial reserve for the period ending 30 June 2026.
Noor Mohammed Al Wahaibi: We will start with a small presentation. Mathoo will explain this.
Noor Wahaibi: We will start with a small presentation with Madhu will explain this.
Mathoo Chetan: Sorry, share. You are all welcome to the discussion session on the unaudited financial results for the period ended 30 June 2026. Myself, I am Mathoo Chetan. I will be taking you through this one presentation. Once we are done with the presentation, we will take the questions from the analysts and the investors. Just to take on the executive summary, the key highlights for the year ended H1 2026. On the operational results on the HSE, we have a tremendous record. There is no recordable incident for IT June 2026. The TRIR for the year so far, Alhamdulillah, is at zero. Our reliability, as everyone knows, we still stand at a great reliability at 99.97%. Our scheduled maintenance activity has been successfully executed in accordance with our O&M contract.
[Company Representative] (Musandam Power): Sorry, share. You are all welcome to the discussion session on the unaudited financial results for the period ended 30 June 2026. Myself, I am Mathoo Chetan. I will be taking you through this one presentation. Once we are done with the presentation, we will take the questions from the analysts and the investors. Just to take on the executive summary, the key highlights for the year ended H1 2026. On the operational results on the HSE, we have a tremendous record. There is no recordable incident for IT June 2026. The TRIR for the year so far, Alhamdulillah, is at zero. Our reliability, as everyone knows, we still stand at a great reliability at 99.97%. Our scheduled maintenance activity has been successfully executed in accordance with our O&M contract.
Speaker #1: My name is Madhu Chetan, and I will be taking you through this small presentation. Once we are done with the presentation, we will take questions from analysts and investors.
Speaker #1: So, just to take on the executive summary—the key highlights for the year in the first half of 2026. On the operational results, on the HSC, we have a tremendous record.
Speaker #1: There is no recordable incident for June 2026. The TRIR for the year so far is zero, and our reliability as everyone knows, we still stand under great reliability at 99.97%, and our scheduled maintenance activity has been successfully executed in accordance with our contract, our guaranteed 48 maintenance hours.
Mathoo Chetan: Our guaranteed 48 maintenance hours, we have only consumed about 25 hours, so we have about 52% of contractual allowance. The APT, annual performance test, has been successfully completed for the nearest contract year, and it has been accepted and approved. Going to the financial result, the revenue for the YTD June 2026 has been standing at OMR 9.5 million as compared to OMR 9.1 million as of 2022. Yeah. Just a small request. I hope I am audible. Someone from the Zoom side, if you can. Yeah. We can hear you. We can hear you, Mathoo. Yeah. I can go ahead, right? I am audible? Interesting. Thank you. Yes, we can hear you. Thank you so much. As I was explaining regarding the revenue, the revenue for the period ended 30 June 2026 is at OMR 9.5 million as compared to OMR 9.1 million.
[Company Representative] (Musandam Power): Our guaranteed 48 maintenance hours, we have only consumed about 25 hours, so we have about 52% of contractual allowance. The APT, annual performance test, has been successfully completed for the nearest contract year, and it has been accepted and approved. Going to the financial result, the revenue for the YTD June 2026 has been standing at OMR 9.5 million as compared to OMR 9.1 million as of 2022. Yeah. Just a small request. I hope I am audible. Someone from the Zoom side, if you can. Yeah. We can hear you. We can hear you, Mathoo. Yeah. I can go ahead, right? I am audible? Interesting. Thank you. Yes, we can hear you. Thank you so much. As I was explaining regarding the revenue, the revenue for the period ended 30 June 2026 is at OMR 9.5 million as compared to OMR 9.1 million.
Speaker #1: We have only consumed about 25 hours, so we have about 52% of the contractual allowance. The APG annual performance test has been successfully completed for the contract year, and it has been accepted and approved.
Speaker #1: Going through the financial results, the revenue for the YTD June 2026 has been standing at $9.5 million, as compared to $9.1 million as of 30 June.
Speaker #1: Yeah, I have just a small request. I hope I'm audible. Someone from the investors' side, if you can...
Speaker #2: Yeah, we can hear you. We can hear you, Madhu. Yeah. I'll go—I can go ahead, right? I'm audible? Yes. Thank you.
Speaker #3: Yes, we can hear you.
Speaker #2: Thank you so much. As I was explaining regarding the revenue, the revenue for the period ending 30 June 2026 is at $9.5 million, as compared to $9.1 million.
Speaker #2: The increase is mainly due to the annual increase in the tariff because of the indexation. Also, we have achieved higher engine running hours compared to the same period of 2025.
Mathoo Chetan: The increase is majorly because of the increase in the annual tariff because of the indexation. Also we have achieved the higher engine running hours as compared to the same period of 2025. The total revenue has increased by 3%, which is in a standard similar line from our previous year. However, the revenue cost has been increased by 5% as compared to 2025, majorly due to higher fuel cost associated with the generation increased demand. But as we always say in these meetings, our fuel cost is a pass-through cost, as well as we have a higher LPFA variable fee, which is also directly linked to the energy running hours. Going to the profit before interest and tax, it has been decreased by 6% compared with the same period, falling from OMR 2.719 million as compared to OMR 2.557 million.
[Company Representative] (Musandam Power): The increase is majorly because of the increase in the annual tariff because of the indexation. Also we have achieved the higher engine running hours as compared to the same period of 2025. The total revenue has increased by 3%, which is in a standard similar line from our previous year. However, the revenue cost has been increased by 5% as compared to 2025, majorly due to higher fuel cost associated with the generation increased demand. But as we always say in these meetings, our fuel cost is a pass-through cost, as well as we have a higher LPFA variable fee, which is also directly linked to the energy running hours. Going to the profit before interest and tax, it has been decreased by 6% compared with the same period, falling from OMR 2.719 million as compared to OMR 2.557 million.
Speaker #2: So, the total revenue is increased by 3%, which is in a standard similar line of our previous year as well. However, with the credit cost has been increased by 5% as compared to June 2025.
Speaker #2: This is mainly due to higher fuel costs associated with the increase in generation and demand as well. But, as we always say in our previous meetings, our fuel cost in the past, as well as the higher LTSA variable fee, which is also directly linked to the energy running hours, have contributed to this.
Speaker #2: Going to the profit before interest and tax, it has decreased by 6% compared to the same period, falling from OMR 2.71 million to OMR 2.557 million.
Speaker #2: The decline was primarily attributed to higher indirect cost during the period. We will go into the detail in the next slide. So, the period benefited from a reduction in finance cost due to the lower interest expenses because of our senior as per the senior facility agreement.
Mathoo Chetan: The decline was primarily attributable to higher indirect costs during the period. We will go into the detail in the next slide. We have benefited from a reduction in finance cost due to the lower interest expenses because of our, as per the senior facility agreement. The net profit for the period ended June 2026 is decreased by 9% as compared to June 2025. As of 30 June 2026, our company share price stood at Baiza 349 as compared to Baiza 283 of the same period in June 2025. Going to our plant's HSE, health, safety, and environment. As I explained in the previous slide, our TRIR is zero, which is extremely good record, and near miss case, which we have recorded about 67. We always encourage staff to record all the near misses, even if it is very minor.
[Company Representative] (Musandam Power): The decline was primarily attributable to higher indirect costs during the period. We will go into the detail in the next slide. We have benefited from a reduction in finance cost due to the lower interest expenses because of our, as per the senior facility agreement. The net profit for the period ended June 2026 is decreased by 9% as compared to June 2025. As of 30 June 2026, our company share price stood at Baiza 349 as compared to Baiza 283 of the same period in June 2025. Going to our plant's HSE, health, safety, and environment. As I explained in the previous slide, our TRIR is zero, which is extremely good record, and near miss case, which we have recorded about 67. We always encourage staff to record all the near misses, even if it is very minor.
Speaker #2: The net profit for the period ended June 2026 decreased by 9% as compared to June 2025. As of 30 June 2026, our company share price was at 349, compared to 283 for the same period in June 2025.
Speaker #2: Now, going to our planned HSE—Health, Safety, and Environment—as I explained in the previous slide, our TRIR is zero, which is an extremely good record.
Speaker #2: And near misses, we have recorded about 67, so we always encourage staff to record all the near misses, even if it is very minor. Also, in the third part, there is a third-party audit on the HSE conducted by Atlas Philips.
Mathoo Chetan: Also there is a third-party audit on the HSE conducted by Applus+. With respect to plant performance, our plant target is 99.25%, but achieved is tremendously about 99.97%. Also our scheduled maintenance against our guaranteed hours, where our actual hours are 69.65% of the guaranteed hours. When you say compared to guaranteed hours to actual hours, we have 2,469 actual hours as compared to 1,719.74 hours. This is again a very predominant slide because this shows about the liquid fuel consumption and the LFO consumption, as well as the natural gas consumption. Historically, we were ideally between 2021 and 2022, there was a greater dependence on the LFO, which is diesel. But comparatively from 2023, the diesel consumption has been significantly reduced thanks to the gas supply from our adjacent plants from MGP.
[Company Representative] (Musandam Power): Also there is a third-party audit on the HSE conducted by Applus+. With respect to plant performance, our plant target is 99.25%, but achieved is tremendously about 99.97%. Also our scheduled maintenance against our guaranteed hours, where our actual hours are 69.65% of the guaranteed hours. When you say compared to guaranteed hours to actual hours, we have 2,469 actual hours as compared to 1,719.74 hours. This is again a very predominant slide because this shows about the liquid fuel consumption and the LFO consumption, as well as the natural gas consumption. Historically, we were ideally between 2021 and 2022, there was a greater dependence on the LFO, which is diesel. But comparatively from 2023, the diesel consumption has been significantly reduced thanks to the gas supply from our adjacent plants from MGP.
Speaker #2: With respect to planned performance, our target planned target is 99.25%, but achieved is tremendously at about 99.97%. And also, our scheduled maintenance within the guaranteed hours—we have actual hours at 69.65% of the guaranteed hours.
Speaker #2: When you say compared to guaranteed hours to actual hours, we have 2,469 actual hours as compared to 1,719.74 hours. Now, this is again a very predominant slide because this shows about the liquid fuel consumption that the LFO consumption is average the natural gas consumption historically we were ideally between 2021 and 2022 there was a greater dependence on the LFO which is diesel but comparatively from 2023 the diesel consumption has been significantly reduced thanks to the gas supply from our existing plants from MGP so in the year 2026 we are running the plant with 98% in our natural gas and 2% in LFO comparing to the last year year 2025 for a period of 12 months we had we had run our plant with 97% of natural gas about 3% on LFO.
Mathoo Chetan: In the year 2026, we are running the plant with 98% in our natural gas and 2% in LFO. Comparing to the last year 2025, for a period of 12 months, we had run our plant in 97% of natural gas, about 3% on LFO. This is our plant generation trend. The plant net generation in 2026 recorded about 40,400 megawatt hours, compared 45,584 megawatt hours in June 2025, representing the decrease in approximately about 11.4%. But this reduction was primarily attributed to dispatch and demand changes as per the instruction and system operating changes which is being corresponding if you see the previous year figures. This is about the financial variance analysis compared to our business plan. Alhamdulillah, we are doing fairly well.
[Company Representative] (Musandam Power): In the year 2026, we are running the plant with 98% in our natural gas and 2% in LFO. Comparing to the last year 2025, for a period of 12 months, we had run our plant in 97% of natural gas, about 3% on LFO. This is our plant generation trend. The plant net generation in 2026 recorded about 40,400 megawatt hours, compared 45,584 megawatt hours in June 2025, representing the decrease in approximately about 11.4%. But this reduction was primarily attributed to dispatch and demand changes as per the instruction and system operating changes which is being corresponding if you see the previous year figures. This is about the financial variance analysis compared to our business plan. Alhamdulillah, we are doing fairly well.
Speaker #2: So, this is our planned generation trend. The planned net generation in 2026 is recorded at about 40,400 megawatt-hours, compared to 45,584 megawatt-hours in June 2025, representing a decrease of approximately 11.4%. This reduction was primarily attributed to dispatch and demand changes as per the instruction and system operating changes, which is consistent if you see the previous year figures.
Speaker #2: Now, this is about the financial balance analysis compared to our business plan. Alhamdulillah, we are doing fairly well. There is a slight profit after tax, which you see as per the plan as of June YTD.
Mathoo Chetan: There is a slight profit after tax, which you see as per the plan as of June YTD, we have about OMR 84,000 plus. However, as per the business plan, there were certain expenses which has come in 2026 we have to observe, especially with respect to direct other cost. There were also certain indirect costs which is attributing to this plan because there are certain employee exit and the full and final settlements as well. This slide we are comparing with 2025 and 2026 results. As we stated in my first slide, there is an increase in the revenue because of the annual tariff indexation with OPWP. There is also a PRH which has impacted the NGSA variable fees. The same thing you can also see, as we say, the fuel costs are pass-through costs.
[Company Representative] (Musandam Power): There is a slight profit after tax, which you see as per the plan as of June YTD, we have about OMR 84,000 plus. However, as per the business plan, there were certain expenses which has come in 2026 we have to observe, especially with respect to direct other cost. There were also certain indirect costs which is attributing to this plan because there are certain employee exit and the full and final settlements as well. This slide we are comparing with 2025 and 2026 results. As we stated in my first slide, there is an increase in the revenue because of the annual tariff indexation with OPWP. There is also a PRH which has impacted the NGSA variable fees. The same thing you can also see, as we say, the fuel costs are pass-through costs.
Speaker #2: We have about 84,000 plus. However, as per the business plan, there were certain expenses which have come in 2026. We have to observe, especially with respect to direct other costs.
Speaker #2: And also, there were certain indirect costs which are attributable to this plan because there are certain employee exits and the full and final settlements.
Speaker #2: On this slide, we are comparing the 2025 and 2026 results. As we stated in my first slide, there is an increase in revenue because of the annual tariff indexation with the NPWP, and also there is an ERH, which has impacted the LTSA variable fees.
Speaker #2: The same thing you can also see, as we say the fuel costs are our pass-through costs. Mostly, all the fuel costs—11.5 fuel cost, natural gas—is always recovered by OPWP.
Mathoo Chetan: Mostly all the fuel costs, LFO and fuel cost natural gas is always recoverable by OPWP. The direct cost stood at OMR 5 million as compared to 2026, we have about OMR 5.3 million, and the gross profit is actually same as June 2025. It has been tandem with our operations. Only there is a very minor variance, about OMR 19,000. The variance in the indirect cost is majorly due to the timing difference. The accrued employee bonuses of 2024 were settled in Q3 2025, whereas accrued bonuses of 2025 were settled in Q2 2026. So that's a major timing difference between the Q2 and Q3. The cost will be levelized in Q3 2026. Also, as I mentioned earlier, there were certain final settlements paid to the existed employees in 2026. So overall, the profit after tax as last year, Q2 2026 stood at OMR 1.13 million as compared to OMR 1 million.
[Company Representative] (Musandam Power): Mostly all the fuel costs, LFO and fuel cost natural gas is always recoverable by OPWP. The direct cost stood at OMR 5 million as compared to 2026, we have about OMR 5.3 million, and the gross profit is actually same as June 2025. It has been tandem with our operations. Only there is a very minor variance, about OMR 19,000. The variance in the indirect cost is majorly due to the timing difference. The accrued employee bonuses of 2024 were settled in Q3 2025, whereas accrued bonuses of 2025 were settled in Q2 2026. So that's a major timing difference between the Q2 and Q3.
Speaker #2: And the direct cost to that—$5 million—as compared to 2026, we have about $5.3 million. And the gross profit is slightly, I mean, it is actually the same as June 2025. It has been in tandem with the operations as well; there is a very minor variance, about $19,000.
Speaker #2: The indirect cost variance in the indirect cost is mainly due to the timing difference. The approved employee bonuses for 2024 were settled in Q3 2025, whereas approved bonuses for 2025 were settled in Q2 2026.
Speaker #2: So, that's a major timing difference between Q2 and Q3. The cost will be levelized in Q3 2026. Also, as I mentioned earlier, there were certain final settlements paid to the existing employees in 2026.
[Company Representative] (Musandam Power): The cost will be levelized in Q3 2026. Also, as I mentioned earlier, there were certain final settlements paid to the existed employees in 2026. So overall, the profit after tax as last year, Q2 2026 stood at OMR 1.13 million as compared to OMR 1 million. So we have a slight decrease in the profit after tax, about OMR 100,000. So this slide basically compares with our business plan actual and as well as actual last year. In tandem, just to touch on the profit after tax, the planned profit after tax was about OMR 1.1 million. So the current profit after tax as of June 2026 is about OMR 1 million, OMR 1,027,000.
Speaker #2: The overall profit after tax as of last year Q2 2026 stood at $1.13 million as compared to $1 million. So we have a slight decrease in the profit after tax, about $100,000.
Mathoo Chetan: So we have a slight decrease in the profit after tax, about OMR 100,000. So this slide basically compares with our business plan actual and as well as actual last year. In tandem, just to touch on the profit after tax, the planned profit after tax was about OMR 1.1 million. So the current profit after tax as of June 2026 is about OMR 1 million, OMR 1,027,000. Last year, at the same period, we had about OMR 1.1 million. This is how our P&L forecast is looking at the end of the year. But the forecasts are always dependent on the other aspects. So our business is straightforward. The revenue numbers is purely dependent on the energy running hours and the fuel charges. So we are looking to end our business year with OMR 2.5 million. That is the projected profit before tax.
Speaker #2: So, this slide basically compares our business plan actuals, as well as actuals from last year. In tandem, just to touch on the profit after tax: the planned profit after tax was about $1.1 million.
Speaker #2: So, the current profit after tax as of June 2026 is about $1,027,000. Last year, at the same period, we had about $1,130,000.
[Company Representative] (Musandam Power): Last year, at the same period, we had about OMR 1.1 million. This is how our P&L forecast is looking at the end of the year. But the forecasts are always dependent on the other aspects. So our business is straightforward. The revenue numbers is purely dependent on the energy running hours and the fuel charges. So we are looking to end our business year with OMR 2.5 million. That is the projected profit before tax.
Speaker #2: This is our how our P&L forecast is looking at the end of the year. But the forecast are always dependent on the on the other aspects like so our business is straightforward.
Speaker #2: The revenue numbers are purely dependent on the energy running hours and the fuel charges. So we are looking to end our business year with $2.5 million.
Speaker #2: That is a projected profit before that. So this is a small presentation. We would love to present to all our investors and analysts regarding the results as of the half-yearly results, or you can say full year 2026.
Mathoo Chetan: This is a small presentation we would love to present to all our investors and analysts regarding the results as of half yearly results, or you can say Q2 2026. We would now would like to take questions from everybody. We have a hand raised by Rao Amir Ali. As-salamu alaykum.
[Company Representative] (Musandam Power): This is a small presentation we would love to present to all our investors and analysts regarding the results as of half yearly results, or you can say Q2 2026. We would now would like to take questions from everybody. We have a hand raised by Rao Amir Ali. As-salamu alaykum.
Speaker #2: We would now like to take questions from everybody. We have a hand raised by Rao Ameer Ali. Assalamu alaikum.
Speaker #1: Wa alaikum assalam. First of all, thank you for the detailed presentation. My name is Rao Ameer Ali, and I am a research analyst at Omar Capital.
Rao Amir Ali: Wa alaykumu salam. First of all, thank you for detailed presentation. My name is Rao Amir Ali, and I am a research analyst at Umar Capital. Are you hearing me?
Rao Aamir Ali: Wa alaykumu salam. First of all, thank you for detailed presentation. My name is Rao Amir Ali, and I am a research analyst at Umar Capital. Are you hearing me?
Speaker #1: Are you hearing me?
Speaker #2: Yes, you are audible.
Mathoo Chetan: Yes, we are hearing you.
[Company Representative] (Musandam Power): Yes, we are hearing you.
Speaker #1: Okay, so my first question is regarding the power demand in the Musandam power system. What do you expect the demand will be in 2032, which is the PPA expiration date for Musandam Power?
Rao Amir Ali: Okay. My first question is regarding the power demand in Musandam Power system. What do you expect, what will be demand in 2032, which is the PPA expiration date of Musandam Power?
Rao Aamir Ali: Okay. My first question is regarding the power demand in Musandam Power system. What do you expect, what will be demand in 2032, which is the PPA expiration date of Musandam Power?
Mathoo Chetan: Just to answer your question with respect to 2032, as you can notice, the demand in the region of Musandam is slightly increasing every year. Correspondingly, there are a lot of the projects, CapEx projects, infrastructure projects announced by the government. This will directly impact the power demand in the sector. We are expecting an increased demand in the coming years.
[Company Representative] (Musandam Power): Just to answer your question with respect to 2032, as you can notice, the demand in the region of Musandam is slightly increasing every year. Correspondingly, there are a lot of the projects, CapEx projects, infrastructure projects announced by the government. This will directly impact the power demand in the sector. We are expecting an increased demand in the coming years.
Speaker #2: Well, just to answer your question with respect to 2032 as if you notice the reason in the Musandam the demand in the region of Musandam is slightly increasing every year and correspondingly there are a lot of the projects CAPEX projects infrastructure projects announced by the government.
Speaker #2: So obviously, this will indirectly and directly impact the power demand in the sector. So we are expecting an increased demand in the coming years.
Speaker #1: So can you can you refer to number what what do you expect what the power expected power demand by 2032?
Rao Amir Ali: So can you refer the number? What do you expect? What the expected power to run by 2032?
Rao Aamir Ali: So can you refer the number? What do you expect? What the expected power to run by 2032?
Speaker #3: Sorry, Mr. Rao. The percentage in terms of percentage increase normally comes from the NPWP. We cannot disclose that because this basically comes as an approved project, and then all the demands which are needed for the region are compared to the NPWP.
Murshid Al-Yarubi: Sorry, Mr. Rao. The percentage in terms of percentage increase, it normally comes from OPWP. Thus, we cannot disclose that because this basically comes as approved project and then all the demands which is needed for the region is compared to the OPWP. So we do not have an exact percentage on that. So we cannot disclose any information on that aspect.
Murshid Al-Yarubi: Sorry, Mr. Rao. The percentage in terms of percentage increase, it normally comes from OPWP. Thus, we cannot disclose that because this basically comes as approved project and then all the demands which is needed for the region is compared to the OPWP. So we do not have an exact percentage on that. So we cannot disclose any information on that aspect.
Speaker #3: So, we don't have an exact percentage on that. Yeah, so we cannot disclose any information on that aspect.
Speaker #1: Sure. So my next question is about your plant life. What is the plant life?
Rao Amir Ali: Sure. My next question is about your plant life. What is the plant life?
Rao Aamir Ali: Sure. My next question is about your plant life. What is the plant life?
Speaker #2: Yeah. If you have referred to our financial statement, the plant life is about 40 years. So, up to 2057, this will be from 2017; we have started a depreciation schedule.
Mathoo Chetan: Yeah. If you refer to our financial statement, the plant life is about 40 years, so up to 2057. This will be from 2017, we have started our depreciation schedule. So our depreciation schedule will end by 2057.
[Company Representative] (Musandam Power): Yeah. If you refer to our financial statement, the plant life is about 40 years, so up to 2057. This will be from 2017, we have started our depreciation schedule. So our depreciation schedule will end by 2057.
Speaker #2: So our depreciation schedule will end by 2057.
Speaker #1: So it is highly, highly possible that you will get PPA renewal after 2032, keeping in mind your plant life and the rising demand in the region.
Rao Amir Ali: It is highly possible that you will get PPA renewable after 2032, keeping that your plant life and the rising demand in the region?
Rao Aamir Ali: It is highly possible that you will get PPA renewable after 2032, keeping that your plant life and the rising demand in the region?
Speaker #2: Alhamdulillah. As you know, we have highlighted this question in our previous meetings as well. We are hoping, you know, of course, with the current trend and with all that we are saying, we have no plans.
Mathoo Chetan: Alhamdulillah. We have highlighted this question in our previous meetings as well. We are hoping, of course, with the current trend and with all the We are planning a new plant. We are just commencing 2017. Alhamdulillah, we hope for the best.
[Company Representative] (Musandam Power): Alhamdulillah. We have highlighted this question in our previous meetings as well. We are hoping, of course, with the current trend and with all the We are planning a new plant. We are just commencing 2017. Alhamdulillah, we hope for the best.
Speaker #2: We are just commissioning 2017. Alhamdulillah, we hope for the best.
Speaker #1: Can you allow me to ask the next question?
Rao Amir Ali: Can you allow me for next question, please?
Rao Aamir Ali: Can you allow me for next question, please?
Speaker #2: Yes. Sure.
Mathoo Chetan: Yes, sure.
[Company Representative] (Musandam Power): Yes, sure.
Speaker #1: Yes. So my next question is about renewables. Is there any plan by the government to install renewable energy in the Musandam power system?
Rao Amir Ali: Yes. My next question about the renewables. Is there any plan by the government to install the renewable energy in the Musandam Power System?
Rao Aamir Ali: Yes. My next question about the renewables. Is there any plan by the government to install the renewable energy in the Musandam Power System?
Murshid Al-Yarubi: We do not want to answer on that one because it is on the other side of the game. We as an operator there, we are just concerned on the power plant that we have. Any new development is basically dependent on the government focus, how they want to take it. I know within Oman region, there are different projects are taking place in south, in the central Oman, in some areas within Oman. That is not a point that we can answer on it.
Murshid Al-Yarubi: We do not want to answer on that one because it is on the other side of the game. We as an operator there, we are just concerned on the power plant that we have. Any new development is basically dependent on the government focus, how they want to take it. I know within Oman region, there are different projects are taking place in south, in the central Oman, in some areas within Oman. That is not a point that we can answer on it.
Speaker #3: We don't want to answer on that one because it's it's it's on on the other side of the game. So we as as an operator there we just concerned on the on the power plant that we have.
Speaker #3: Any new development is basically dependent on the government's focus—how they want to take it. I know that within the Oman region, there are different projects taking place in South and Central Oman, and some areas within Oman.
Speaker #3: So that's not, you know, a point that we can answer on. Yeah.
Speaker #1: Sure. One last question, if you allow me.
Rao Amir Ali: Sure. One last question, if you allow me.
Rao Aamir Ali: Sure. One last question, if you allow me.
Speaker #2: Sure. In the meantime, sorry for interrupting. We would kindly request that you just raise your hand so that we can queue up the questions.
Mathoo Chetan: Sure. Sorry for interrupting. We would kindly request if you can just raise your hand so that we can queue up the questions. Yes, Rao, please continue.
[Company Representative] (Musandam Power): Sure. Sorry for interrupting. We would kindly request if you can just raise your hand so that we can queue up the questions. Yes, Rao, please continue.
Speaker #2: Yes.
Speaker #1: One last question. Allah forbid, if Musandam Power suffers damage due to the current geopolitical situation, how would this impact the capacity payment under the current PPA, and how would the insurance coverage protect the revenues and debt obligations?
Rao Amir Ali: One last question. Allah forbid, if the Musandam Power suffer damage due to current geopolitical situation, how would this impact the capacity payment under the current PPA, and how would the insurance coverage protect the revenues and debt obligations?
Rao Aamir Ali: One last question. Allah forbid, if the Musandam Power suffer damage due to current geopolitical situation, how would this impact the capacity payment under the current PPA, and how would the insurance coverage protect the revenues and debt obligations?
Murshid Al-Yarubi: The latter question, sir.
Murshid Al-Yarubi: The latter question, sir.
Speaker #2: Yeah. So you know yes we do understand what is currently going and in a geopolitical situations but we are well insured and even the PPA is very strong about you know these kind of situations and any such event will definitely will act according to what is there in the PPA and also we are well covered in terms of you know in terms of insurance coverage for these kind of activities.
Mathoo Chetan: Yes, we do understand what is currently going in the geopolitical situations, but we are well-insured, and even the PPA is very strong about these kind of situations. Any such event will definitely act according to what is there in the PPA. Also we are well covered in terms of insurance coverage for these kind of facilities.
[Company Representative] (Musandam Power): Yes, we do understand what is currently going in the geopolitical situations, but we are well-insured, and even the PPA is very strong about these kind of situations. Any such event will definitely act according to what is there in the PPA. Also we are well covered in terms of insurance coverage for these kind of facilities.
Speaker #1: So, if I am saying again, Allah forbid, if this happens during the availability period—in which you are not available for generation—will you get the capacity payment? Is there any clause in the PPA?
Rao Amir Ali: If, I am saying again, Allah forbid, if this happens during the period in which you are not available for generation, will you get the capacity payment? Any clause in the PPA?
Rao Aamir Ali: If, I am saying again, Allah forbid, if this happens during the period in which you are not available for generation, will you get the capacity payment? Any clause in the PPA?
Speaker #3: Sorry Rao you are you are your your question is clear. However we are as a as a plant or or as a company the facilities ensure there's basically on the whatever situation is.
Murshid Al-Yarubi: Sorry, Rao, your question is clear. However, as a plant or as a company, the facilities insured based on whatever situation is. As well, the PPA is guaranteed the payment based on the availability. So that's bigger than of the PPA concord. However, any losses as such for any reason, the insurance is covering that payment based on the assured load. So there are some clauses in the insurance itself.
Murshid Al-Yarubi: Sorry, Rao, your question is clear. However, as a plant or as a company, the facilities insured based on whatever situation is. As well, the PPA is guaranteed the payment based on the availability. So that's bigger than of the PPA concord. However, any losses as such for any reason, the insurance is covering that payment based on the assured load. So there are some clauses in the insurance itself.
Speaker #3: Yeah. As well the PPA is guarantee the the payment basically based on the on the on the availability. Yeah. So that's the government of the of the PPA contract.
Speaker #3: However the any losses as such for any any reason so the insurance is is covering that that payment based on the on the installed load.
Speaker #3: So there's an — there are some clauses in the insurance itself. Yeah.
Speaker #1: So both payments, like the plant damage and the capacity payment—both payments are covered by insurance.
Rao Amir Ali: So both payment, like the plant damage and the capacity payments, both payment are covered in insurance?
Rao Aamir Ali: So both payment, like the plant damage and the capacity payments, both payment are covered in insurance?
Speaker #3: The the losses. The losses.
Murshid Al-Yarubi: The losses.
Murshid Al-Yarubi: The losses.
Speaker #1: Losses in terms of unavailability. Is this?
Rao Amir Ali: Losses in term of unavailability. Is this?
Rao Aamir Ali: Losses in term of unavailability. Is this?
Speaker #2: Yes. If I if I may answer. So the insurance we have certain you know campaigns regarding if such kind of events happen there are certain number of you know amount of campaign where we will be able to recover such losses Alhamdulillah God forbid nothing should happen but in case of these circumstances yes we we are you know we are well insured to cover these kind of circumstances.
Mathoo Chetan: Yes. If I may answer. The insurance, we have certain capping regarding if such kind of events happen. There are certain amount of capping where we will be able to recover such losses. Alhamdulillah, God forbid, nothing should happen. But in case of these circumstances, yes, we are well-insured to cover these kind of circumstances, to cover these losses due to unavailability of the plant.
[Company Representative] (Musandam Power): Yes. If I may answer. The insurance, we have certain capping regarding if such kind of events happen. There are certain amount of capping where we will be able to recover such losses. Alhamdulillah, God forbid, nothing should happen. But in case of these circumstances, yes, we are well-insured to cover these kind of circumstances, to cover these losses due to unavailability of the plant.
Speaker #2: You know, to cover these losses due to, you know, unavailability of the plant.
Speaker #1: Thank you. Thank you for the detailed answer. No further questions. Thank you.
Rao Amir Ali: Thank you. Thank you for the detailed answer. No further question. Thank you.
Rao Aamir Ali: Thank you. Thank you for the detailed answer. No further question. Thank you.
Speaker #2: You are welcome to ask questions. Please feel free to ask your questions. Mr. Ali Ali Khan, we noticed you are trying to speak. Please let us know.
Mathoo Chetan: Are there any questions, please feel free to ask the questions Sir Ali? Ali Khan? We noticed, are you trying to speak? Please let us know.
[Company Representative] (Musandam Power): Are there any questions, please feel free to ask the questions Sir Ali? Ali Khan? We noticed, are you trying to speak? Please let us know.
Speaker #2: Can I ask one more question?
Rao Amir Ali: Can I ask one more question if there is no question?
Rao Aamir Ali: Can I ask one more question if there is no question?
Speaker #1: if there is no question?
Speaker #2: Yes. Yes. Please Rao.
Mathoo Chetan: Yes, please go on.
[Company Representative] (Musandam Power): Yes, please go on.
Speaker #1: Yes. In your slide, you have shown that the percentage of generation based on LFO has decreased since 2022. Is this because of gas availability, or has the overall demand for power in the region declined?
Rao Amir Ali: Yes. In slide, you have shown that the percentage of generation based on LFO has decreased since 2022. Is this because of gas availability or the overall demand of power in the region has declined?
Rao Aamir Ali: Yes. In slide, you have shown that the percentage of generation based on LFO has decreased since 2022. Is this because of gas availability or the overall demand of power in the region has declined?
Speaker #2: No. I think we are making two different things here. The yes there was a shortage of gas but then if you have noticed that we are even in our financial reports we have presented this thing from 2023 the availability of MGP plant from the gas from the just from the MGP plant has increased and that's where we are able to run our plant and also our principally or predominantly our plant is supposed to run on natural gas and also the cost of natural gas is when you compare with when you're running to a diesel is about closely about one is to one is to one is to five.
Mathoo Chetan: I think we are mentioning two different things here. That, yes, there was a shortage of gas, but then if you have noticed that even in our financial reports, we have presented this thing. From 2023, the availability of MG2 plant from the gas from the purchase from the MG2 plant has increased, and in that phase, we are able to run our plant. Also principally or predominantly, our plant is supposed to run on natural gas. Also the cost of natural gas is, when you compare with when you are running through a diesel, is closely about one is to five. That is the main purpose of we are highlighting the LFO consumption. From 2023 onwards, we have got the gas supply from MG2 has been almost sufficient enough, though not 100%, but we are closely going at about 97%, 98%.
[Company Representative] (Musandam Power): I think we are mentioning two different things here. That, yes, there was a shortage of gas, but then if you have noticed that even in our financial reports, we have presented this thing. From 2023, the availability of MG2 plant from the gas from the purchase from the MG2 plant has increased, and in that phase, we are able to run our plant. Also principally or predominantly, our plant is supposed to run on natural gas. Also the cost of natural gas is, when you compare with when you are running through a diesel, is closely about one is to five. That is the main purpose of we are highlighting the LFO consumption. From 2023 onwards, we have got the gas supply from MG2 has been almost sufficient enough, though not 100%, but we are closely going at about 97%, 98%.
Speaker #2: So that is like you know that that is the that's the main purpose of we are highlighting the LFO consumption so from 2023 onwards we have got a the gas supply from MGP has been sufficient enough almost sufficient enough though not 100% but we have closely going at like about 97 98%.
Speaker #1: Thank you. Thank you for the answer. Is there any plant in the region that is supplying electricity to the grid or the system?
Rao Amir Ali: Thank you. Thank you for that, sir. Is there any plant in the region who will be supplying the electricity to the grid, the system?
Rao Aamir Ali: Thank you. Thank you for that, sir. Is there any plant in the region who will be supplying the electricity to the grid, the system?
Mathoo Chetan: MPC is the main plant in the region of Musandam Power. There is a catcher plant. It is a power station that would be decided by the Electricity Authority.
[Company Representative] (Musandam Power): MPC is the main plant in the region of Musandam Power. There is a catcher plant. It is a power station that would be decided by the Electricity Authority.
Speaker #2: MPC is the main plant in the region of Sundam Power. There is a catch-up plant, which is a power station that could be decided by, you know, the electricity authority, and, you know.
Murshid Al-Yarubi: It is under the Nama Group. The main power supply in the region is MIPP, Musandam Power. The other plant is set by the government as a backup in case we need to stop the plant for any major maintenance. Then the other plants have to come in. The FASA plant is basically a government unit where they use it as a backup.
Murshid Al-Yarubi: It is under the Nama Group. The main power supply in the region is MIPP, Musandam Power. The other plant is set by the government as a backup in case we need to stop the plant for any major maintenance. Then the other plants have to come in. The FASA plant is basically a government unit where they use it as a backup.
Speaker #3: It's it's under the Namak Group. So the the main power supply in the region is the MIPP the Sundam Power the other plant is set by the government as a backup in case of any we need like to you know to to stop the plant for any major maintenance then the other plants has to come in.
Speaker #3: Yeah. So the FASA plant is basically a government unit where they use it as a backup.
Speaker #1: Understood. Thank you for the answer.
Rao Amir Ali: Understood. Thank you. Thank you so much.
Rao Aamir Ali: Understood. Thank you. Thank you so much.
Speaker #2: If you have any questions. Please let us know if you have any further questions. We we let them all all of you to let us know in case you have any questions in the audience.
Mathoo Chetan: If you have any questions, please let us know if you have any further questions. We welcome all of you to let us know in case you have any questions in the audience.
[Company Representative] (Musandam Power): If you have any questions, please let us know if you have any further questions. We welcome all of you to let us know in case you have any questions in the audience.
