Half Year 2026 Kuwait Projects Co Holding KSCP Earnings Call

August 19, 2026

Speaker #1: Good afternoon, everyone, and welcome to KIPCO's Q2 2026 results call. This is Ahmed El Shazli from EFG Hermes, and it's a pleasure to have with us on the call today, from KIPCO's management, Mr. Mustafa Shami, Group CFO.

Ahmed El-Shazly: Good afternoon, everyone, and welcome to KIPCO's 2Q26 results call. This is Ahmed El-Shazly from EFG Hermes, and it is a pleasure to have with us on the call today from KIPCO's management, Moustapha Samir Chami, Group CFO, Naveen Kumar Rajanala, Group SVP Financial Control, and Eman Mohammad Al Awadhi, Group SVP Corporate Communications and IR. I will now hand the call over to Eman to start with the presentation.

Ahmed El-Shazly: Good afternoon, everyone, and welcome to KIPCO's Q2 2026 results call. This is Ahmed El-Shazly from EFG Hermes, and it is a pleasure to have with us on the call today from KIPCO's management, Moustapha Samir Chami, Group CFO, Naveen Kumar Rajanala, Group SVP Financial Control, and Eman Mohammad Al Awadhi, Group SVP Corporate Communications and IR. I will now hand the call over to Eman to start with the presentation.

Speaker #1: Mr. Nadim Kumar Rajanala, Group SVP, Financial Control, and Ms. Eman Al-Awadi, Group SVP, Corporate Communications and IR. I will now hand the call over to Eman to start with the presentation.

Eman Mohammad Al Awadhi: Thank you, Ahmed. Good afternoon, everyone. We welcome you to our earnings call for the H1 2026. Please note that today's presentation is also available on our website, along with the financial statements for the period. Moving on to the presentation, please refer to a brief disclaimer on slide 2. Some of the statements that we will be making today and information available in the presentation can be forward-looking. Such statements are based on KIPCO's current expectations, predictions, and estimates and are subject to risks and uncertainties which may adversely or otherwise affect the future outcome. They are not a guarantee of future performance, achievement, or results. Moving on to slide 7, looking at the broader economic environment. Lower economic activity, continued inflationary pressures, particularly in Turkey, and elevated interest rates have adversely affected our performance during the H1 2026.

Eman Mohammad Al Awadhi: Thank you, Ahmed. Good afternoon, everyone. We welcome you to our earnings call for the H1 2026. Please note that today's presentation is also available on our website, along with the financial statements for the period. Moving on to the presentation, please refer to a brief disclaimer on slide two. Some of the statements that we will be making today and information available in the presentation can be forward-looking. Such statements are based on KIPCO's current expectations, predictions, and estimates and are subject to risks and uncertainties which may adversely or otherwise affect the future outcome. They are not a guarantee of future performance, achievement, or results. Moving on to slide seven, looking at the broader economic environment. Lower economic activity, continued inflationary pressures, particularly in Turkey, and elevated interest rates have adversely affected our performance during the H1 2026.

Speaker #2: Thank you, Ahmed. Good afternoon, everyone. We welcome you to our earnings call for the first half of 2026. Please note that today's presentation is also available on our website, along with the financial statements for the period.

Speaker #2: Moving on to the presentation, please refer to a brief disclaimer on slide 2. Some of the statements that we'll be making today, and information available in the presentation, can be forward-looking.

Speaker #2: Such statements are based on KIPCO's current expectations, predictions, and estimates, and are subject to risks and uncertainties, which may adversely or otherwise affect the future outcome.

Speaker #2: They are not a guarantee of future performance, achievement, or results. Moving on to Slide 7, looking at the broader economic environment—lower economic activity, continued inflationary pressures, particularly in Turkey, and elevated interest rates have adversely affected our performance during the first half of 2026.

Speaker #2: As regional conditions recover, however, we expect performance to gradually normalize in the coming period. Business sentiment softened during the period, delaying spending and investment, while shipping and logistics disruptions placed additional pressure on regional trade flows.

Eman Mohammad Al Awadhi: As regional conditions recover, however, we expect performance to gradually normalize in the coming periods. Business sentiments softened during the period, delaying spending and investment, while shipping and logistics disruptions placed additional pressure on regional trade flows. Inflation also continued to affect raw material costs and margins, while delays in anticipated interest rate cuts maintained pressure on financing costs. The macroeconomic outlook was revised significantly following the regional disruption. Current estimates point to a contraction in the GCC's GDP of 2.3% in 2026, compared with pre-conflict expectations of 3.1% growth, followed by a recovery of 7.1% in 2027. For Kuwait, the revision is more pronounced, with GDP currently expected to contract by 11.9% in 2026 before rebounding by 14.2% in 2027. Turkey, meanwhile, is expected to record a growth of 3% this year and 4.6% in 2027. Inflation remains another factor to watch.

Speaker #2: Inflation also continued to affect raw material costs and margins, while delays in anticipated interest rate cuts maintained pressure on financing costs. The macroeconomic outlook was revised significantly following the regional disruption. Current estimates point to a contraction in the GCC's GDP of 2.3% in 2026, compared with pre-conflict expectations of 3.1% growth.

Speaker #2: Followed by a recovery of 7.1% in 2027. For Kuwait, the revision is more pronounced, with GDP currently expected to contract by 11.9% in 2026, before rebounding by 14.2% in 2027.

Speaker #2: Turkey, meanwhile, is expected to record growth of 3% this year and 4.6% in 2027. Inflation remains another factor to watch. It's estimated at 2.2% across the GCC and 2.5% in Kuwait for 2026, while inflation in Turkey remains considerably higher at around 30.6%.

Eman Mohammad Al Awadhi: It is estimated at 2.2% across the GCC and 2.5% in Kuwait for 2026, while inflation in Turkey remains considerably higher at around 30.6%. Oil prices also reflected the volatility in the operating environment. Brent crude averaged approximately $63 per barrel in 2025, rising to $78 in the Q1 2026, and $79 in the Q2. The current full-year estimate stands at approximately $83 per barrel. Despite these pressures, strong policy and financial buffers continue to support resilience. Regional central banks have prioritized liquidity and financial stability, including measures introduced by the Central Bank of Kuwait to ease liquidity and capital requirements. Kuwait's sovereign strength remains well supported, with S&P and Moody's reaffirming their ratings with stable outlooks in May, and Fitch affirming Kuwait's long-term issuer default rating at AA minus with a stable outlook in August.

Speaker #2: Oil prices also reflected the volatility in the operating environment. Brent crude averaged approximately $63 per barrel in 2025, rising to $78 in the first quarter of 2026 and $79 in the second quarter.

Speaker #2: The current full-year estimate stands at approximately $83 per barrel. Despite these pressures, strong policy and financial buffers continue to support resilience. Regional central banks have prioritized liquidity and financial stability, including measures introduced by the Central Bank of Kuwait to ease liquidity and capital requirements.

Speaker #2: Kuwait's sovereign strength remains well-supported, with S&P and Moody's reaffirming their ratings with stable outlooks in May, and Fitch affirming Kuwait's long-term issuer default rating at AA- with a stable outlook in August.

Speaker #2: I will now hand over to Mustafa to take you through some of KIPCO's key financial highlights for the period.

Eman Mohammad Al Awadhi: I will now hand over to Mustafa to take you through some of KIPCO's key financial highlights for the period.

Speaker #3: Thank you, Eman, and good afternoon, everyone. Turning now to slide 8, where we review KIPCO’s group financial performance for the first half of 2026.

Moustapha Samir Chami: Thank you, Iman, and good afternoon, everyone. Turning now to slide 8, where we review KIPCO's group financial performance for H1 2026. Despite the challenging macroeconomic and geopolitical environment, the group continued to demonstrate resilience across its diversified portfolio. Total revenue for the first half stood at $2.58 billion, an increase of 3.5% compared with the same period of last year, despite the challenging environment. Total assets increased to $46.9 billion, up 4.6% from year-end 2025, largely driven by growth in the group's banking business. At the parent level, net debt to equity improved to 0.82 times, reflecting our continued focus on maintaining a prudent, well-managed capital and funding structure supported by strong liquidity. Growing the top line and the balance sheet, while continuing to reduce leverage in these conditions is the clearest measure of the group's resilience. Let's move to slide 9.

Moustapha Samir Chami: Thank you, Iman, and good afternoon, everyone. Turning now to slide eight, where we review KIPCO's group financial performance for H1 2026. Despite the challenging macroeconomic and geopolitical environment, the group continued to demonstrate resilience across its diversified portfolio. Total revenue for the first half stood at $2.58 billion, an increase of 3.5% compared with the same period of last year, despite the challenging environment. Total assets increased to $46.9 billion, up 4.6% from year-end 2025, largely driven by growth in the group's banking business. At the parent level, net debt to equity improved to 0.82 times, reflecting our continued focus on maintaining a prudent, well-managed capital and funding structure supported by strong liquidity. Growing the top line and the balance sheet, while continuing to reduce leverage in these conditions is the clearest measure of the group's resilience. Let's move to slide 9.

Speaker #3: Despite the challenging macroeconomic and geopolitical environment, the group continued to demonstrate resilience across its diversified portfolio. Total revenue for the first half stood at $2.58 billion, an increase of 3.5% compared with the same period last year, despite the challenging environment.

Speaker #3: Total assets increased $246.9 billion, up 4.6% from year-end 2025, largely driven by growth in the group's banking business. At the parent level, net debt-to-equity improved to 0.82 times, reflecting our continued focus on maintaining a prudent, well-managed capital and funding structure, supported by strong liquidity.

Speaker #3: Growing the top line and the balance sheet while continuing to reduce leverage in these conditions is the clearest measure of the group's resilience. Let's move to slide 9 and look more closely at revenue.

Moustapha Samir Chami: Looking more closely at revenue, total group revenue reached $2.58 billion in H1 2026, compared with $2.5 billion in the corresponding period last year. This is the third consecutive six-month period of revenue growth starting from H1 2024. The group's top line remains well diversified, with growth during the period largely driven by the increase in banking net interest income. Interest income increased to $1.33 billion compared to $1.25 billion in H1 2025. Net fee and commission income stood at $134 million, while industrial and logistics income reached $479 million. Hospitality and real estate income remained broadly stable at $147 million, while energy income increased slightly to $97 million. Media and digital satellite income was also broadly stable at approximately $115 million.

Speaker #3: Total group revenue reached $2.58 billion in the first half of 2026, compared with $2.5 billion in the corresponding period last year. This is the third consecutive six-month period of revenue growth, starting from H1 2024.

Speaker #3: The group's top line remains well diversified, with gross during the period largely driven by the increase in banking net interest income. Interest income increased to $1.33 billion, compared to $1.25 billion in the first half of 2025.

Speaker #3: Net fee and commission income stood at $134 million, while industrial and logistics income reached $479 million. Hospitality and real estate income remained broadly stable at $147 million, while energy income increased slightly to $97 million.

Speaker #3: Media and digital satellite income was also broadly stable at approximately $115 million. This exemplifies the diversification benefit of the group: nine sectors over 20 countries, and thereby the diversified revenue streams supporting the growth of the group revenue, even in this backdrop.

Moustapha Samir Chami: This exemplifies the diversification benefit of the group, nine sectors, over 20 countries, and thereby the diversified revenue streams supporting the growth of the group revenue, even in this backdrop. Moving to profitability on slide 10, operating profit remained broadly stable at $287 million in H1 2026, compared with $288.2 million in the corresponding period last year. Profit for the period stood at $91.1 million compared to $119.6 million in H1 2025, while net profit attributable to KIPCO shareholders was $17.3 million, compared with $33 million in the same period last year. While operating profit remained stable, net profit was impacted primarily by the deterioration in the macroeconomic backdrop across the region. On slide 11, we have the holdings financial position, where you can see that KIPCO maintained a solid balance sheet during the period.

Speaker #3: Moving to profitability on slide 10, operating profit remained broadly stable at $287 million in the first half of 2026, compared with $288.2 million in the corresponding period last year.

Speaker #3: Profit for the period stood at $91.1 million, compared to $119.6 million in the first half of 2025, while net profit attributable to KIPCO shareholders was $17.3 million, compared with $33 million in the same period last year.

Speaker #3: While operating profit remained stable, net profit was impacted primarily by the deterioration in the macroeconomic backdrop across the region. On slide 11, we have the holdings' financial position, where you can see that KIPCO maintained a solid balance sheet during the period.

Speaker #3: Total assets increased to $46.9 billion, compared to $44.9 billion at year-end 2025, representing growth of approximately 4.6% year-to-date. As mentioned earlier, this growth was primarily driven by the increase in assets from the banking businesses.

Moustapha Samir Chami: Total assets increased to $46.9 billion compared to $44.9 billion at year-end 2025, representing growth of approximately 4.6% year to date. As mentioned earlier, this growth was primarily driven by the growth in assets from the banking businesses. Equity attributable to KIPCO shareholders increased to $2.13 billion compared to $2.09 billion at year-end. While book value per share slightly decreased to $0.455 from $0.461 at the end of 2025, primarily due to increase in outstanding shares due to distribution of 3% dividend using treasury shares for the year 2025. Overall, the group's assets grew, equity increased, and parent leverage reduced. All of these indicate a solid balance sheet management. Moving on to the financial performance of the group principal operations. We have on slide 13 the key performance highlights of our banking operations. We start with Burgan Bank Group's results for H1 2026.

Speaker #3: Equity attributable to KIPCO shareholders increased to $2.13 billion, compared to $2.09 billion at year-end, while book value per share slightly decreased to 45.5 cents, from 46.1 cents at the end of 2025, primarily due to the increase in outstanding shares due to the distribution of a 3% dividend using treasury shares for the year 2025.

Speaker #3: Overall, the group's assets grew, equity increased, and parent leverage reduced—all of these indicating solid balance sheet management. Moving on to the financial performance of the group's principal operations, we have on slide 13 the key performance highlights of our banking operations.

Speaker #3: We start with Burgan Bank Group's results for H1 2026. I would like to note that Burgan held its earnings call on August 4, and you can refer to the transcript for more details.

Moustapha Samir Chami: I would like to note that Burgan held its earnings calls on 4 August, and you can refer to the transcript for more details. The bank delivered resilient revenue growth in H1 2026, underpinned by prudent risk management and balance sheet resilience amid a complex and evolving operating environment. Revenue increased by 9% year on year to $446.5 million, compared with $408.3 million the first half of 2025, and $305 million the same period of 2024. This reflects broad-based growth across the bank's core revenue streams, supported by higher net interest income and stronger contribution from non-interest income. Net interest margin remained stable at 2.2%. Net profit attributable to shareholders stood at $36.1 million for the period. The decline, compared with the first half of 2025, was mainly driven by operating expenses and a higher-than-expected impact from IAS 29 from Turkey.

Speaker #3: The bank delivered resilient revenue growth in H1 2026, underpinned by prudent risk management and balance sheet resilience amid a complex and evolving operating environment.

Speaker #3: Revenue increased by 9% year-on-year to $446.5 million, compared with $408.3 million in the first half of 2025 and $305 million in the same period of 2024.

Speaker #3: This reflects broad-based growth across the bank's core revenue streams, supported by higher net interest income and a stronger contribution from non-interest income. Net interest margin remained stable at 2.2%.

Speaker #3: Net profit attributable to shareholders stood at $36.1 million for the period, a decline compared with the first half of 2025. This was mainly driven by operating expenses and a higher-than-expected impact from IF-29 from Turkey.

Speaker #3: The bank continued to recover growth across its balance sheet. Loans and advances increased to $16.5 billion, compared with $15.7 billion at year-end 2025, while customer deposits increased to $18.3 billion, up from $17.7 billion.

Moustapha Samir Chami: The bank continued to record growth across its balance sheet. Loans and advances increased to $16.5 billion compared with $15.7 billion at year-end 2025, while customer deposits increased to $18.3 billion from $17.7 billion. Burgan Bank also continues to maintain strong capital and liquidity positions, with a capital adequacy ratio of 15.9% and a liquidity coverage ratio of 197%. Looking ahead, the bank remains focused on strengthening its digital capabilities, improving operational efficiency, and creating greater value for its customers. Moving to Jordan Kuwait Bank, JKB, on slide 14. The bank's overall core performance was strong. JKB's net interest income grew by 16% year on year. However, non-interest levels were impacted by regional political tensions through lower commission and foreign exchange income at its Iraqi subsidiary, Bank of Baghdad.

Speaker #3: Burgan Bank also continues to maintain strong capital and liquidity positions, with a capital adequacy ratio of 15.9% and a liquidity coverage ratio of 197%.

Speaker #3: Looking ahead, the bank remains focused on strengthening its digital capabilities, improving operational efficiency, and creating greater value for its customers. Moving to Jordan Kuwait Bank, JKB, on slide 14.

Speaker #3: The bank's overall core performance was strong. JKB's net interest income grew by 16% year-on-year; however, non-interest levels were impacted by regional political tensions through lower commission and foreign exchange income at its Iraqi subsidiary, Bank of Baghdad.

Speaker #3: As a result, revenue stood at $209 million, compared with $247.2 million in the first half of 2025, representing a decline of approximately 15.5%.

Moustapha Samir Chami: As a result, revenue stood at $209 million, compared with $247.2 million in the first half of 2025, representing a decline of approximately 15.5%. Net profit attributable to shareholders stood at $61.7 million, compared with $73.8 million the first half of last year. The balance sheet remained broadly stable. Loans and advances stood at $2.9 billion compared with $3 billion at year-end 2025, while customer deposits stood at $5 billion compared with $5.3 billion. The bank continues to maintain a strong capital position with a capital adequacy ratio of around 24%. Profitability indicators also remained healthy, with a return on equity of 12.1% and a return on assets of 2.1%. Looking ahead, JKB remains focused on its digital transformation and enhancing its banking services while expanding its role in sustainable finance strengthening its regional presence and further diversifying its income streams.

Speaker #3: Net profit attributable to shareholders stood at 61.7 million dollars, compared with 73.8 million dollars in the first half of last year. The balance sheet remained broadly stable, loans and advances stood at 2.9 billion dollars, compared with 3 billion dollars at year-end 2025, while customer deposits stood at 5 billion dollars, compared with 5.3 billion dollars.

Speaker #3: The bank continues to maintain a strong capital position, with a capital adequacy ratio of around 24%. Profitability indicators also remained healthy, with a return on equity of 12.1% and a return on assets of 2.1%.

Speaker #3: Looking ahead, JKB remains focused on its digital transformation and enhancing its banking services, while expanding its role in sustainable finance, strengthening its regional presence, and further diversifying its income streams.

Speaker #3: I will now hand over to Naveen to take you through the next part of the presentation.

Moustapha Samir Chami: I will now hand over to Naveen to take you through the next part of the presentation.

Speaker #1: Thank you, Mustafa. Good afternoon, ladies and gentlemen. If we can move to slide 15, where we look at SDARCO. Now, performance during the first half of 2026 was impacted, as mentioned by my colleagues.

Naveen Kumar Rajanala: Thank you, Mustafa. Good afternoon, ladies and gentlemen. If we can move to slide 15, where we look at SADCO. Performance during H1 2026 was impacted, as mentioned by my colleagues, the macroeconomic and regional developments, which has placed pressure both on revenue and profitability. Despite this, the company maintained its leading market position across its core categories, and it continued to demonstrate a strong financial position as we will see on this slide. Revenue stood at $396 million compared to $406.7 million in H1 of the same period last year, representing a marginal decline. Operating profit also declined to $46.5 million from $65.1 million. This is largely reflecting the higher raw material costs, regional maritime disruption, related surcharges, inflation, and higher fuel prices amidst the current geopolitical conditions.

Speaker #1: The macroeconomic and regional developments have placed pressure both on revenue and profitability. Now, despite this, the company maintained its leading market position across its core categories, and it continued to demonstrate a strong financial position, as we will see on this slide.

Speaker #1: Now, revenue stood at $396 million, compared to $406.7 million in the first half of the same period last year, representing a marginal decline.

Speaker #1: Now, operating profit also declined to 46.5 million dollars from 65.1 million dollars. Now, this is largely reflecting the higher raw material costs, regional maritime disruption, related surcharges, inflation, and higher fuel prices amidst the current geopolitical conditions.

Speaker #1: Now, net profit stood at $45 million, compared to $65 million in the same period last year. Now, it's important to note that despite the backdrop, SDARCO maintained its market leadership across its key categories, with market shares of 51.5% in ultra-high temperature milk, 51.1% in tomato paste, and 31% in the ice cream category.

Naveen Kumar Rajanala: Net profit stood at $45 million compared to $65 million in the same period last year. It is important to note that despite the backdrop, SADCO maintained its market leadership across its key categories with market shares of 51.5% in ultra-high temperature milk, 51.1% in tomato paste, and 31% in the ice cream category. The company also maintains a fairly strong financial position. It has $440 million of equity, $147 million in cash and short-term investments as of H1 2026. Looking ahead, SADCO remains focused on protecting its market share while it is also sort of putting in efforts to accelerate sales volume growth across multiple markets and emerging channels. If you move on to slide 16, where we will look at URC, United Real Estate Company. URC held its earnings call earlier this week, on 16 August.

Speaker #1: The company also maintains a fairly strong financial position. It has $440 million of equity and $147 million in cash and short-term investments as of H1 2026.

Speaker #1: Now, looking ahead, SDARCO remains focused on protecting its market share, while also putting in efforts to accelerate sales volume growth across multiple markets.

Speaker #1: And emerging channels. Now, if you move on to slide 16, where we'll look at URC, United Real Estate Company. Now, URC held its earnings call earlier this year, earlier this week, rather, on 16 August.

Speaker #1: You can refer to the transcript of that call for more details. Now, if we look at URC’s performance in the first half of 2026, they demonstrated resilience and effectively managed operational challenges while maintaining focus on efficiency and cost discipline.

Naveen Kumar Rajanala: You can refer to the transcript of that call for more details. If we look at URC's performance in H1 2026, they demonstrated resilience and effectively managing operational challenges while maintaining focus on efficiency and cost discipline. Revenue growth in H1 2026 came from higher real estate services income and from development and trading income. Again, demonstrating diversified income streams within the company. The bigger story here is the asset base. When you look at the asset base, it grew from $2.2 billion to $2.7 billion with the addition of Sharq Waterfront. This new project brings a significant development pipeline into the portfolio. The net profit of URC of $10.1 million was lower than last year, primarily due to reduced income from associates. This sits outside its operating business. The operating business itself improved quite considerably.

Speaker #1: Now, revenue growth in H1 2026 came from higher real estate services income and from development and trading income, again demonstrating diversified income streams within the company.

Speaker #1: Now, the bigger story here is the asset base. When you look at the asset base, it grew from $2.2 billion to $2.7 billion, with the addition of Souk Sharq Waterfront.

Speaker #1: Now, this new project brings a significant development pipeline into the portfolio. The net profit of URC, at $10.1 million, was lower than last year, primarily due to reduced income from associates.

Speaker #1: And this sits outside its operating business. The operating business itself improved quite considerably. Now, looking ahead, URC remains focused on the successful execution of its newly awarded projects, while continuing to build a strong project pipeline across its different business sectors.

Naveen Kumar Rajanala: Now, looking ahead, URC remains focused on the successful execution of its newly awarded projects while continuing to build a strong project pipeline across its different business sectors. With that, let's move on to the next slide, where we look at JTC, which is our logistics and power rental business. The performance in H1 2026 reflects the impact of the geopolitical developments on business activity levels, particularly in its logistics operations. Despite this impact, the revenue stood at $47.2 million compared to $51.3 million in H1 2025. This marginal decline was mainly driven by lower revenue from ports management, logistics contracts, but this was successfully and partially offset by higher revenue from equipment leasing business, warehousing. So again, underlines or showcases a well-diversified revenue model within the company.

Speaker #1: With that, let's move on to the next slide, where we look at JTC, which is our logistics and power rental business. The performance in the first half of 2026 reflects the impact of geopolitical developments on business activity levels.

Speaker #1: Particularly in its logistics operations. Now, despite this impact, the revenue stood at $47.2 million, compared to $51.3 million in the first half of 2025.

Speaker #1: Now, this marginal decline was mainly driven by lower revenue from ports management and logistics contracts, but this was successfully and partially offset by higher revenue from the equipment leasing business and warehousing. So again, this underlines or showcases a well-diversified revenue model within the company.

Speaker #1: Now, the operating profit stood at $11.2 million, compared to $12.6 million in the corresponding period last year. Again, this reflects that operating margins were maintained at stable levels through active cost control.

Naveen Kumar Rajanala: The operating profit stood at $11.2 million compared to $12.6 million in the corresponding period last year. Again, reflects that the operating margins were maintained at stable levels through active cost control. Net profit attributable to shareholders stood at $10.2 million compared to $11.6 million in the same period last year, largely due to the impact of decline in top line. If we sort of look ahead, JTC remains focused on expanding its infrastructure logistics capabilities to support future business growth as we expect the geopolitical environment to sort of start normalizing over the next few periods. If we move on to slide 18, looking at National Petroleum Services Company, NAPESCO delivered yet another solid H1 2026, and the results of performance were supported by improved operational efficiency and continued focus on cost optimization.

Speaker #1: Now, net profit attributable to shareholders stood at $10.2 million, compared to $11.6 million in the same period last year, largely due to the impact of.

Speaker #1: Decline in top line. Now, if we sort of look ahead, JTC remains focused on expanding its infrastructure and logistics capabilities to support future business growth, as we expect the geopolitical environment to start normalizing over the next few periods.

Speaker #1: Now, if you move on to slide 18, looking at National Petroleum Services Company, NEPESCO. NEPESCO delivered yet another solid first half of 2026, and the results or performance were supported by improved operational efficiency and continued focus on cost optimization.

Speaker #1: Now, the revenue increased marginally to 93 million dollars, compared to 92.2 million dollars in the first half of 2025. And this was supported by higher revenue from non-oil field services, and was partially offset by the decline in marginal decline in revenues from oil field services.

Naveen Kumar Rajanala: The revenue increased marginally to $93 million compared to $92.2 million in H1 2025, and this was supported by higher revenue from non-oilfield services, and was partially offset by the marginal decline in revenues from oilfields. Operating profit increased to $35 million compared to $33.2 million in the corresponding period last year, and this reflects margin expansion due to the improved operational efficiency and cost optimization. The net profit attributable to shareholders increased by 8% to $26.8 million compared to $24.8 million in H1 2025. Looking ahead, NAPESCO remains focused on diversifying its revenue streams and expanding its geographic presence, supporting sustainable growth of the company over the long term. Moving on to ATC, Advanced Technology Company, on slide 19.

Speaker #1: Now, operating profit increased to $35 million, compared to $33.2 million in the corresponding period last year. This reflects margin expansion due to improved operational efficiency and cost optimization.

Speaker #1: Now, the net profit attributable to shareholders increased by 8% to $26.8 million, compared to $24.8 million in the first half of 2025.

Speaker #1: Now, looking ahead, NEPESCO remains focused on diversifying its revenue streams and expanding its geographic presence, supporting the sustainable growth of the company over the long term.

Speaker #1: Now, moving on to ATC, Advanced Technology Company, on slide 19. ATC's performance in the first half of the year was clearly impacted by the regional geopolitical events.

Naveen Kumar Rajanala: ATC's performance in H1 of the year was clearly impacted by the regional geopolitical events and the resulting supply chain disruptions. If you look at revenue for H1 2026 declined to $216.7 million, compared to $260.5 million in the corresponding period in 2025. This decline reflects delays in contract renewals and deliveries, as well as the impact of increased freight charges during the period. ATC recorded an operating loss of $22.4 million, compared with an operating profit of $0.6 million in the corresponding period last year. The company also reported a net loss of $32.6 million for H1 2026, compared with $11.5 million of net loss in H1 2025. The decline in top line essentially reflects delays in contract renewals, increased freight charges, delayed deliveries.

Speaker #1: And the resulting supply chain disruptions. If you look at revenue, revenue for the first half of 2026 declined to $216.7 million, compared to $260.5 million in the corresponding period in 2025.

Speaker #1: Now, this decline reflects delays in contract renewals and deliveries, as well as the impact of increased freight charges during the period. ATC recorded an operating loss of $22.4 million, compared with an operating profit of $0.6 million in the corresponding period last year.

Speaker #1: Now, the company also reported a net loss of $32.6 million for the first half of 2026, compared with a net loss of $11.5 million in H1 2025.

Speaker #1: Now, the decline in top line essentially reflects delays in contract renewals, increased freight charges, and delayed deliveries. Additionally, there were losses from ATC’s subsidiary KMCH, which impacted the company’s bottom line.

Naveen Kumar Rajanala: Additionally, there were losses from ATC's subsidiary, KMCH, which impacted the company's bottom line. We expect the revenue run rate to pick up during the second half of the year. Going forward or looking ahead, ATC remains focused on opportunities within the Kuwait healthcare sector alongside with focus on turning around the performance of its subsidiary, KMCH. With that, I will hand it back to Eman to take you through the next couple of slides.

Speaker #1: But we expect the revenue run rate to pick up during the second half of the year. Now, going forward or looking ahead, ATC remains focused on opportunities within Kuwait's healthcare sector, alongside a focus on turning around the performance of its subsidiary, KMCH.

Speaker #1: With that, I will hand it back to Iman to take you through the next couple of slides.

Speaker #2: Thank you, Naveen. Moving to OSM Group on slide 20. Over the past two years, OSM has made significant progress in building and integrating a streamlined streaming platform across video and audio, bringing together OSM Plus, OSM TV, and Al-Rami.

Eman Mohammad Al Awadhi: Thank you, Naveen. Moving to OSN Group on slide 20. Over the past two years, OSN has made significant progress in building an integrated streaming platform across video and audio, bringing together OSN+, OSN TV, and Anghami. This progress is reflected in stronger subscriber growth. OSN+ subscribers have increased by 57% over the two-year period, while Anghami subscribers have grown by 44%. Today, the group has significant reach across its platforms with 2.6 million paid subscribers on OSN+ and Anghami, supported by 45 telecom partnerships across B2B and B2C distribution channels. OSN also serves approximately 100,000 business customers across hotels, multi-dwelling units, and bulk subscriptions. Building on this progress, OSN has developed a clear two-year strategic plan focusing on driving profitability through synergies, AI, and greater operational leverage.

Speaker #2: This progress is reflected in stronger subscriber growth. OSM Plus subscribers have increased by 57% over the two-year period, while Al-Rami subscribers have grown by 44%.

Speaker #2: Today, the group has significant reach across its platforms, with 3.6 million paid subscribers on OSM Plus and Al-Rami. This is supported by 45 telecom partnerships across B2B and B2C distribution channels.

Speaker #2: OSM also serves approximately 100,000 business customers across hotels, multi-dwelling units, and bulk subscriptions. Building on this progress, OSM has developed a clear two-year strategic plan, focusing on driving profitability through synergies—AI and greater operational leverage.

Speaker #2: The first priority is platform consolidation, bringing OSM Plus, OSM TV, and Al-Rami onto one unified technology stack—covering infrastructure, billing, and content management. The second is AI enablement across engineering and customer service, which is expected to increase development velocity by approximately 40% and allow the group to build and deliver projects more efficiently.

Eman Mohammad Al Awadhi: The first priority is platform consolidation, bringing OSN+, OSN TV, and Anghami onto one unified technology stack covering infrastructure, billing, and content management. The second is AI enablement across engineering and customer service, which is expected to increase development velocity by approximately 40% and allow the group to build and deliver products more efficiently. Finally, OSN is focused on resource optimization, targeting a 25% reduction in direct costs through the consolidation and renegotiation of content, technology, and distribution costs. Together, these initiatives are designed to capitalize on the scale OSN has built over the past two years and provide a clear path towards sustainable profitability. We now move to slide 21, where we have our ESG update. We continue to advance our sustainability agenda during the period, both at the KIPCO level and across our portfolio companies.

Speaker #2: Finally, OSM is focused on resource optimization, targeting a 25% reduction in direct costs through the consolidation and renegotiation of content, technology, and distribution costs.

Speaker #2: Together, these initiatives are designed to capitalize on the scale OSM has built over the past two years and provide a clear path toward sustainable profitability.

Speaker #2: We now move to slide 21, where we have our ESG update. We continue to advance our sustainability agenda during the period, both at the KIPCO level and across our portfolio companies.

Speaker #2: In June, KIPCO published its fifth annual sustainability report, reflecting the progress we've made toward a more integrated approach to sustainability across the Group. We also saw a number of important developments across our portfolio.

Eman Mohammad Al Awadhi: In June, KIPCO published its fifth annual sustainability report, reflecting the progress we've made towards a more integrated approach to sustainability across the group. We also saw a number of important developments across our portfolio. In July, Jordan Kuwait Bank issued its second green bond with the IFC investing up to $100 million to support the financing of green projects with long-term environmental and economic impact. Also during July, Alternative Energy Projects Company announced a capital increase to support the expansion of its solar energy business in Kuwait and across the wider MENA region. The transaction was led by Tamkeen Investments in collaboration with Hubbaiba. Alternative Energy also signed a 15-year agreement with URC to install an 8.77 megawatt solar system at Sharq Waterfront project. The project is expected to reduce approximately 189,000 metric tons of CO2 emissions over its lifetime.

Speaker #2: In July, JKB issued its second Green Bond, with the IFC investing up to $100 million to support the financing of green projects with long-term environmental and economic impact.

Speaker #2: Also, during July, Alternative Energy Projects Company announced a capital increase to support the expansion of its solar energy business in Kuwait and across the wider MENA region.

Speaker #2: The transaction was led by Tamco Invest in collaboration with Bogdan Bank. Alternative Energy also signed a 15-year agreement with URC to install an 8.77-megawatt solar system at the Sharq Waterfront Project.

Speaker #2: The project is expected to reduce approximately 189,000 metric tons of CO2 emissions over its lifetime. Beyond these initiatives, several of our portfolio companies, including Bogdan Bank, Sadafco, JKB, and Tamco Invest, published their 2025 sustainability reports.

Eman Mohammad Al Awadhi: Beyond these initiatives, several of our portfolio companies, including Burgan Bank, SADCO, Jordan Kuwait Bank, and Kamco Invest, published their 2025 sustainability report. Together, these developments reflect the continued integration of sustainability across the group, with an increasing focus on translating our ESG commitments into tangible initiatives and investments. I will now hand back to Mustafa for some final remarks.

Speaker #2: Together, these developments reflect the continued integration of sustainability across the Group, with an increasing focus on translating our ESG commitments into tangible initiatives and investments.

Speaker #2: I will now hand back to Mustafa for some final remarks.

Speaker #1: Thanks, Iman. I would like to conclude with a few key messages on slide 22. Despite the challenging operating environment, we continue to make progress during the period across portfolio performance, deleveraging, and value creation.

Moustapha Samir Chami: Thanks, Eman. I would like to conclude with a few key messages on slide 22. Despite the challenging operating environment, we continued to make progress during the period across portfolio performance, de-leveraging, and value creation. The benefits of our diversified portfolio remained evident, with group revenues demonstrating resilience despite the disruption across the region. While profitability was impacted during the period, we view this impact as transitory, and the underlying fundamentals of our portfolio companies remain intact. At the parent level, our capital and liquidity position remains strong, providing us with the flexibility to continue executing our plans. As we look ahead, our focus remains on resilience, disciplined execution, and creating long-term value across our diversified portfolio. We remain resilient today and positioned for tomorrow. I will now hand over the call to Ahmed to invite our listeners to raise any questions they may have.

Speaker #1: The benefits of our diversified portfolio remained evident, with group revenues demonstrating resilience despite the disruption across the region. While profitability was impacted during the period, we view this impact as transitory, and the underlying fundamentals of our portfolio companies remain intact.

Speaker #1: At the parent level, our capital and liquidity position remains strong, providing us with the flexibility to continue executing our plans. As we look ahead, our focus remains on resilience, disciplined execution, and creating long-term value across our diversified portfolio.

Speaker #1: We remain resilient today and are well-positioned for tomorrow. I will now hand over the call to Ahmad to invite our listeners to raise any questions they may have.

Speaker #3: Thank you for the presentation. We will now open the floor for Q&A. So, if you'd like to ask a question, you can click on the 'Raise Hand' button, and we'll unmute your microphone.

Ahmed El-Shazly: Thank you for the presentation. We will now open the floor for Q&A. If you would like to ask a question, you can click on the raise hand button and we will unmute your microphone. We also kindly ask you to limit your questions to a maximum of two questions so that we can give a chance for everyone to participate. We have our first question from Simrin. Please unmute yourself and go ahead.

Speaker #3: We also kindly ask you to limit your questions to a maximum of two, so that we can give everyone a chance to participate.

Speaker #3: We have our first question from Simrin. Please unmute yourself and go ahead.

Speaker #4: Hi, can you hear me?

[Analyst]: Hi. Can you hear me?

Speaker #1: Yeah, yes.

Speaker #4: Okay, great. Thank you for the presentation. I was wondering if you could elaborate on the parent-level liquidity position—any details on the cash at the parent level—and if you could also comment on your plans regarding the upcoming maturities in October and February of next year, any plans to refinance, and/or how you intend to address those maturities.

Moustapha Samir Chami: Yeah.

Ahmed El-Shazly: Yes.

[Analyst]: Okay, great. Thank you for the presentation. I was wondering if you could elaborate on the parent-level liquidity position, any details on the cash at the parent level, and if you could also comment on your plans regarding the upcoming maturities in October and February of next year. Any plans to refinance, or how do you intend to address those maturities? Maybe just a broader question on your international debt market presence. Is this something you are looking to actively maintain, or do you view perhaps local refinancing as a more attractive option? Any color on this would be helpful. Thank you.

Speaker #4: And maybe just a broader question on your international debt market presence. Is this something you are looking to actively maintain, or do you view, perhaps, local refinancing as a more attractive option?

Speaker #4: Any color on this would be helpful. Thank you.

Speaker #1: Thank you. So, as of 30 June 2026, the KIPCO parent has cash in hand and a bank balance of 262.2 million KD, almost $851 million.

Moustapha Samir Chami: Thank you. As of 30 June 2026, the KIPCO parent had cash in hand and at bank balance of 262.2 million KD, almost $851 million. This information is also available in our financials. You can kindly refer to note 3 of the H1 2026 financial statements. The gross debt of 803.4 million KD, around $2.6 billion. The gross debt at the parent level can also be computed based on the information provided in the notes 5, 6, and 7 of H1 2026 financial statements. That gives us a net debt of 541.2 million KD, around $1.8 billion. Our debt is comprised currently of the two remaining EMTNs maturing in October 2026 and in February 2027.

Speaker #1: This information is also available in our financials. You can kindly refer to Note 3 of the H1 2026 financial statements. The gross debt is KD 803.4 million, around $2.6 billion.

Speaker #1: The gross debt at the parent level can also be computed based on the information provided in Notes 5, 6, and 7 of the H1 2026 financial statements.

Speaker #1: That gives us a net debt of 541.2 million KD, around $1.8 billion. Our debt is comprised currently of the two remaining EMPNs, maturing in October 2026 and in February 2027.

Speaker #1: We also have a bulk of KD loans in local currency, and we have a KD bond of 165 million, as well as a sukuk of 103 million KD.

Moustapha Samir Chami: We have also a bulk of KD loans, local currency, and also we have a KD bond of 165 million KD, and also a Sukuk of 103 million KD, maturing in December 2028 and July 2029, respectively. Currently, we have the liquidity, so we will be using the cash in hand at banks for settling the upcoming EMTNs. We might be using as well our relationship banks in Kuwait and in the region to maybe optimize that particular position. However, we don't shut the door to the international market. We have a very strong liability management proven over the years, and we were always present in the regional and international market. That presence will always be there. So we are just monitoring and exploring the right time, given the current situation and the current situation in the Middle East.

Speaker #1: Maturing in December 2028 and July 2029, respectively. Currently, we have the liquidity, so we will be using the cash in hand at banks. For settling the upcoming EMPNs, we might also use our relationship banks.

Speaker #1: In Kuwait and in the region, to maybe optimize that particular position. However, we don't shut the door to the international market. We have a very strong liability management, proven over the years, and we were always present in the regional and international markets.

Speaker #1: And that presence will always be there. So, we are just monitoring and exploring the right time, given the current situation and the current situation in the Middle East.

Speaker #1: We are targeting the right time to tap the regional or international market.

Moustapha Samir Chami: We are targeting the right time to tap the regional or the international market.

Speaker #4: Great, thank you.

[Analyst]: Great. Thank you.

Speaker #3: Thank you again. If you'd like to ask a question, you can click on the 'Raise Hand' button. We will pause for a few seconds, just to make sure we have no questions.

Ahmed El-Shazly: Thank you. Again, if you would like to ask a question, you can click on the raise hand button. We will pause for a few seconds just to make sure we have no questions. Okay, so it seems we have no further questions, so this should end our call for today. I would like to thank everyone for joining, and I would like to hand back the mic to management for any closing remarks.

Speaker #3: Okay, so it seems we have no further questions, so this will end our call for today. I'd like to thank everyone for joining, and I'd like to hand back the mic to management for any closing remarks.

Speaker #4: Thank you, Ahmad, and thank you to everybody who joined us. We look forward to being with you again at the end of the third quarter.

Eman Mohammad Al Awadhi: Thank you, Ahmed, and thank you to everybody who joined us. We will look forward to being with you again at the end of the Q3. Have a good evening.

Speaker #4: Have a good evening.

Moustapha Samir Chami: Thank you.

Ahmed El-Shazly: Thank you.

Moustapha Samir Chami: Thank you.

Naveen Kumar Rajanala: Thank you.

Half Year 2026 Kuwait Projects Co Holding KSCP Earnings Call

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