Half Year 2026 Salalah Mills Co SAOG Earnings Call
[Company Representative] (Salalah Mills): Subsidiaries and associates. We will walk through very quickly the structure, then the H1 2026 financial performance. Also, in that we will go through, because we have various line of activities in this company, we will see how each one has performed. Then the prospects and outlook. Our CEO will share some strategic initiatives which we have taken and which we plan. Then we will take the question and answer at the end. I hope I am audible, everybody can hear me. Can someone confirm please?
Ravi Tripathi: Subsidiaries and associates. We will walk through very quickly the structure, then the H1 2026 financial performance. Also, in that we will go through, because we have various line of activities in this company, we will see how each one has performed. Then the prospects and outlook. Our CEO will share some strategic initiatives which we have taken and which we plan. Then we will take the question and answer at the end. I hope I am audible, everybody can hear me. Can someone confirm please?
Speaker #1: Today, and the associates who will walk through very quickly the structure. And then the first half, 2026 financial performance. Then also in that, we will go through, because we have various lines of activities, various companies, so we will see how each one has performed.
Speaker #1: And then for the prospects and outlook, the CEO will share some strategic initiatives that we have taken and which we are using in the pipeline.
Speaker #1: And then we will take the question-and-answer session at the end. I hope I am audible, everybody can hear me. Can someone confirm, please?
Speaker #2: Yes, Mr. Dal, you are audible.
[Company Representative] (Salalah Mills): Yes, Mr. Dalal, you are audible.
[Analyst]: Yes, Mr. Ravi, you are audible.
Speaker #1: Thank you so much. So this is our structure: Salalah Mills sits on the top, being the parent company. Under that, we have three subsidiaries: Salalah Laboratory; Salalah Grain International, based in Dubai; and the Food Development Company, which is our industrial bakery product company.
[Company Representative] (Salalah Mills): Thank you so much. This is our structure. Salalah Mills sits on the top, being a parent company. Under that, we have three subsidiaries, Salalah Laboratories Co SPC, Salalah Grain International, based in Dubai, and Food Development Company, which is our industrial bakery product in Khazaen Industrial City. We have one associate, which is based in Yemen. It is a flour mill, and we have 50% stake into that company. In parent company, we have multiple activities. Traditionally, we started from the flour milling, macaroni, packaging, where we do the PP bag, woven sack bag, animal feeds, then Salalah Bakeries. We have various outlets, our own outlets in the Rabee's Hypermarket. We also do B2C trading business of various related products which go along with the flour, like sugar, rice, et cetera. That is another kind of business we have under parent company, Salalah Mills.
Ravi Tripathi: Thank you so much. This is our structure. Salalah Mills sits on the top, being a parent company. Under that, we have three subsidiaries, Salalah Laboratories, Salalah Grain International, based in Dubai, and Food Development Company, which is our industrial bakery product in Khazaen Industrial City. We have one associate, which is based in Yemen. It is a flour mill, and we have 50% stake into that company. In parent company, we have multiple activities. Traditionally, we started from the flour milling, macaroni, packaging, where we do the PP bag, woven sack bag, animal feeds, then Salalah Bakeries. We have various outlets, our own outlets in the Rabee's hypermarket. We also do B2C trading business of various related products which go along with the flour, like sugar, rice, et cetera. That is another kind of business we have under parent company, Salalah Mills.
Speaker #1: In Khazine Industrial Area, we have one associate, which is based in Yemen. It is a flour mill, and we have a 50% stake in that company.
Speaker #1: In parent company, we have multiple activities. Traditionally, we started from the flour milling, macaroni, packaging, where we do the PP bag, oven sack bag, animal feed, and then Salalah bakeries.
Speaker #1: We have various outlets—our own outlets in Rami's Hypermarket. We also do B2C trading business of various related products that go along with flour, like sugar, oil, rice, etc.
Speaker #1: So that's another kind of business we have under the parent company, Salalah Mills. This is our performance for H1 2026 on one slide: volume, revenue, gross margin, and EBITDA.
[Company Representative] (Salalah Mills): This is our performance for H1 2026 on one slide. Volume, revenue, gross margin and EBITDA. It is reflecting only the parent company by activities. Volume, we have done 220,000. In terms of revenue, OMR 37 million. Gross margin is OMR 4.2 million and EBITDA is OMR 2.5 million. We can see that our major business is coming from the flour. Our business and then the related B2C trading also. Out of 222,000 metric ton, 140,000 metric ton has come from the flour itself. PP bag manufacturing, 3,200. Pasta, 30,000. Feed, 24,000. Wheat trading, around 21,000 metric ton. When it comes to revenue again, flour is contributing OMR 23 million. Pasta, OMR 6.37 million. Wheat, OMR 2.56 million. PP bag, OMR 2.26 million. Feed, OMR 2.86 million. Gross margin, OMR 2.8 million has come from flour business. OMR 621,000, pasta. PP bag has contributed OMR 469,000. Wheat trading, OMR 123,000.
Ravi Tripathi: This is our performance for H1 2026 on one slide. Volume, revenue, gross margin and EBITDA. It is reflecting only the parent company by activities. Volume, we have done 220,000. In terms of revenue, OMR 37 million. Gross margin is OMR 4.2 million and EBITDA is OMR 2.5 million. We can see that our major business is coming from the flour. Our business and then the related B2C trading also. Out of 222,000 metric ton, 140,000 metric ton has come from the flour itself. PP bag manufacturing, 3,200. Pasta, 30,000. Feed, 24,000. Wheat trading, around 21,000 metric ton. When it comes to revenue again, flour is contributing OMR 23 million. Pasta, OMR 6.37 million. Wheat, OMR 2.56 million. PP bag, OMR 2.26 million. Feed, OMR 2.86 million. Gross margin, OMR 2.8 million has come from flour business. OMR 621,000, pasta. PP bag has contributed OMR 469,000. Wheat trading, OMR 123,000.
Speaker #1: It is reflecting only the parent company by activities. So, the volume we have done is 220,000; in terms of revenue, OMR 37 million; gross margin is OMR 4.2 million; and EBITDA is OMR 2.5 million.
Speaker #1: We can see that our major business is coming from the flour. Our business and then the related, like B2C trading also. So out of 222,000 metric tons, 140,000 metric tons has come from the flour itself.
Speaker #1: PP bag manufacturing: 3,200; pasta: 30,000; feed: 24,000; and wheat trading: around 21,000 metric tons. When it comes to revenue, again, flour is contributing $23 million.
Speaker #1: Pasta 6.37 million, wheat 2.56, PP bag 2.26, and feed 2.86. Gross margin 2.8 million has come from flower business, 621,000 pasta, PP bag has contributed 469,000, and wheat trading 123,000.
Speaker #1: EBITDA of 995,000 has come from the flour business, 668 from pasta, PP bag has contributed 544, and 123 and 168 have come from wheat and feed, respectively.
[Company Representative] (Salalah Mills): EBITDA, OMR 995,000 has come from the flour business. OMR 668 from pasta. PP bag has contributed OMR 544. OMR 123 and OMR 168 has come from wheat and feed respectively. From profitability, the KPI, maybe the key indicators are volume 222. This is a comparison with the 2025 same period. So our volume is 222, which is less than last year, but it is because wheat trading, which is not our core business. Last year's same period, we had a one-off wheat trade. So that quantity was included last year. So if we compare with that quantity, we are less. Otherwise, manufactured goods, more or less, despite of all the challenges we have maintained the volume. We will see in the subsequent slide. Revenue is, again, because that volume of wheat is included, revenue also appears that it is down by 18%, OMR 37 million. Gross margin is OMR 4.3 million, which is the same.
Ravi Tripathi: EBITDA, OMR 995,000 has come from the flour business. OMR 668 from pasta. PP bag has contributed OMR 544. OMR 123 and OMR 168 has come from wheat and feed respectively. From profitability, the KPI, maybe the key indicators are volume 222. This is a comparison with the 2025 same period. Our volume is 222, which is less than last year, but it is because wheat trading, which is not our core business. Last year's same period, we had a one-off wheat trade. So that quantity was included last year. If we compare with that quantity, we are less. Otherwise, manufactured goods, more or less, despite of all the challenges we have maintained the volume. We will see in the subsequent slide. Revenue is, again, because that volume of wheat is included, revenue also appears that it is down by 18%, OMR 37 million. Gross margin is OMR 4.3 million, which is the same.
Speaker #1: From a profitability perspective, the KPIs—maybe our key indicators—are volume: 222. This is a comparison with the same period in 2025. Our volume is 222, which is less than last year, but that is because of wheat trading, which is not our core business. Last year, in the same period, we had done one wheat trade, so that quantity was included last year.
Speaker #1: So if we compare with that quantity, we are less. Otherwise, manufactured good, more or less, despite all the challenges, we have maintained the volume.
Speaker #1: We will see in the subsequent slide. Revenue, again, because that volume of wheat is included, also appears to be down by 18%, at 37 million.
Speaker #1: Gross margin is $4.3 million, which is the same; the reason is the same everywhere. Gross margin appears less by 14%, EBITDA is less by 25%, net profit is $1.3 million, which is 17% more than last year.
[Company Representative] (Salalah Mills): The reason is same everywhere. Gross margin appears less by 14%, EBITDA is less by 25%. Net profit, OMR 1.3, which is 17% more than the last year. SG&A appears to be 2% more. But again, our base sales has come down because of this wheat. It appears more otherwise, in absolute terms, expenses is also in control. From the balance sheet side, our current ratio is 1.6 times, which is stable, same. It was same last time. Day receiver is also quite stable at 62 days. Quick ratio has come down because we have built up the inventory by another 20 days because of this uncertainty. In the geopolitical situation, the inventory management is the key. So we develop to ensure that our mill doesn't run short of inventory. We are making sure that there is enough inventory.
Ravi Tripathi: The reason is same everywhere. Gross margin appears less by 14%, EBITDA is less by 25%. Net profit, OMR 1.3, which is 17% more than the last year. SG&A appears to be 2% more. Again, our base sales has come down because of this wheat. It appears more otherwise, in absolute terms, expenses is also in control. From the balance sheet side, our current ratio is 1.6 times, which is stable, same. It was same last time. Day receiver is also quite stable at 62 days. Quick ratio has come down because we have built up the inventory by another 20 days because of this uncertainty. In the geopolitical situation, the inventory management is the key. So we develop to ensure that our mill doesn't run short of inventory. We are making sure that there is enough inventory.
Speaker #1: SGA appears to be 2% more, but again, our base sales have come down because of the sweet. It appears more; otherwise, in actual terms, expenses are also under control.
Speaker #1: From the balance sheet side, our current ratio is 1.6 times, which is stable—the same as last time. Trade receivable is also quite stable at 62 days.
Speaker #1: The quick ratio has come down because we have built up the inventory by another 20 days due to the uncertainty in the geopolitical situation. Inventory management is the key.
Speaker #1: So, in order to ensure that our mill doesn't run short of inventory, we are making sure that there is enough inventory. We have built up another inventory for 20 days as compared to the same period last year.
[Company Representative] (Salalah Mills): So we have built up another inventory for 20 days as compared to last year, same period. Therefore, quick ratio looks lower than the last year. Gearing ratio is better because part of our loan, we have shifted from the parent company to the subsidiary company. Because this is a parent company KPI, our gear is better as compared to last year. This is a representation of our revenue by geography. So out of OMR 37 million sales which we have done in this H1, OMR 20 million approximately is within Oman, and remaining is outside Oman. Africa, predominantly Somalia, we sell. So OMR 10.7 million has gone to Africa and OMR 6.5 million EMEA, and the others contribute to a very insignificant number. So 45, 37, the difference of OMR 8 million is basically the one-off wheat trading which we had executed last year, which is not there in this year.
Ravi Tripathi: So we have built up another inventory for 20 days as compared to last year, same period. Therefore, quick ratio looks lower than the last year. Gearing ratio is better because part of our loan, we have shifted from the parent company to the subsidiary company. Because this is a parent company KPI, our gear is better as compared to last year. This is a representation of our revenue by geography. So out of OMR 37 million sales which we have done in this H1, OMR 20 million approximately is within Oman, and remaining is outside Oman. Africa, predominantly Somalia, we sell. So OMR 10.7 million has gone to Africa and OMR 6.5 million EMEA, and the others contribute to a very insignificant number. So 45, 37, the difference of OMR 8 million is basically the one-off wheat trading which we had executed last year, which is not there in this year.
Speaker #1: Therefore, the quick ratio looks lower than last year. The gearing ratio is better because part of our loan has been shifted from the parent company to the subsidiary company.
Speaker #1: So, because this is a parent company KPI, our gearing is better as compared to last year. This is the representation of our revenue by geography.
Speaker #1: So, out of the 37 million in sales that we have achieved in this half year, approximately 20 million is within Oman, and the remaining is outside Oman.
Speaker #1: Africa, predominantly Somalia, is where we sell. So, $10.7 million has gone to Africa and $6.5 million to Yemen. The others contribute a very insignificant number. So, 45 minus 37, the difference of $8 million, is basically related to the wheat trading which we had executed last year.
Speaker #1: Which is not there in this year. But as I said in the beginning, our manufactured goods—our core business—is quite stable.
[Company Representative] (Salalah Mills): But as I said in the beginning, that our manufactured goods, our core business, is quite stable. This is the parent company and group company together profitability. I'll read from the right, 2025 H1 and 2026 H1. So this year we have done 37 as compared to 25. OMR 8 million difference is because of that one time wheat trades last year. Gross margin is quite stable. Rather, it is better as compared to last year in parent company, 11% to 12%. EBITDA is 7%, last year 3.3, now it is OMR 2.5 million. Other income is quite consistent. There is a saving in the finance cost because the interest rate this year is significantly lower than the last year, and then the better management of our working capital. Profit from the operating business is OMR 1.3 million as compared to OMR 1.5 million. There is an OCI gain.
Ravi Tripathi: But as I said in the beginning, that our manufactured goods, our core business, is quite stable. This is the parent company and group company together profitability. I'll read from the right, 2025 H1 and 2026 H1. So this year we have done 37 as compared to 25. OMR 8 million difference is because of that one time wheat trades last year. Gross margin is quite stable. Rather, it is better as compared to last year in parent company, 11% to 12%. EBITDA is 7%, last year 3.3, now it is OMR 2.5 million. Other income is quite consistent. There is a saving in the finance cost because the interest rate this year is significantly lower than the last year, and then the better management of our working capital. Profit from the operating business is OMR 1.3 million as compared to OMR 1.5 million. There is an OCI gain.
Speaker #1: This is the parent company and group company together, profitability. So I'll read from the right—2025 H1 and 2026 H1. So this year we have done 37 as compared to 45; the 8 million difference is because of that one-time wheat trade last year.
Speaker #1: Gross margin is quite stable; in fact, it is better compared to last year in the parent company—11 to 12%. EBITDA is 7%. Last year, it was 3.3 million; now it is 2.5 million.
Speaker #1: Other income is quite consistent. There is a saving in the finance cost because the interest rate this year is relatively lower than last year.
Speaker #1: And then the better management of our working capital. Profit from the operating business is $1.3 million as compared to $1.5 million. And there is an OCI gain—we have an investment in the shares of OPVP and some others.
[Company Representative] (Salalah Mills): We have an investment in the shares of OPWP and some others. The unrealized gain is OMR 2.3 million on that. If we add that, our net profit is OMR 3.6 million as compared to OMR 1 million last year. At the group level, because of the three subsidiary and they all three are at the ramp-up stage, especially the food, where the fish cost is high, the depreciation and interest we are selling, that is actually eroded a little bit of our profit. From OMR 3.6 million at parent level, at group level, our profit is OMR 2 million only. Move on. Next. Now the balance sheet. This is the asset side of the balance sheet. Again, I'll start from the parent company, H1 2026. There are two components, non-current assets and the current assets. Our total non-current assets is OMR 38 million as compared to OMR 53 million last year.
Ravi Tripathi: We have an investment in the shares of OPWP and some others. The unrealized gain is OMR 2.3 million on that. If we add that, our net profit is OMR 3.6 million as compared to OMR 1 million last year. At the group level, because of the three subsidiary and they all three are at the ramp-up stage, especially the food, where the fish cost is high, the depreciation and interest we are selling, that is actually eroded a little bit of our profit. From OMR 3.6 million at parent level, at group level, our profit is OMR 2 million only. Move on. Next. Now the balance sheet. This is the asset side of the balance sheet. Again, I'll start from the parent company, H1 2026. There are two components, non-current assets and the current assets. Our total non-current assets is OMR 38 million as compared to OMR 53 million last year.
Speaker #1: So, the gain on the unrealized gain is 2.3 million on that. If we add that, our net profit is 3.6 million, as compared to 1 million last year.
Speaker #1: At the group level, because of the three subsidiaries, and they all three are at the ramp-up stage—especially the food, where the fish cost is high—the depreciation and interest we are serving.
Speaker #1: So therefore, that has actually eroded a little bit of our profit. So from 3.6 million at parent level, at group level, our profit is only 2 million.
Speaker #1: And move on. Next, let's look at the balance sheet. This is the asset side of the balance sheet. Again, I'll start from the parent company: H1 2026.
Speaker #1: So there are two components: non-current assets and current assets. Our total non-current assets are 38 million, as compared to 53 million last year. And this reduction is not because there was a sale of the asset.
[Company Representative] (Salalah Mills): This reduction is not because there is a sale of the asset, it is because of the transfer of the fixed asset of the bakery related from the parent company to the group level. If you see at the group level, OMR 53 million to OMR 52 million. There is no much change, but at the parent company it looks reduction. This reduction is just transfer of the assets from parent company to subsidiary company. Then comes the current assets. Current asset is OMR 43 million, quite stable of last year. Major component in that is the inventory. Last year we had OMR 14 million at the end of June. This year we have OMR 18 million. That's the reason our liquidity ratio was low.
Ravi Tripathi: This reduction is not because there is a sale of the asset, it is because of the transfer of the fixed asset of the bakery related from the parent company to the group level. If you see at the group level, OMR 53 million to OMR 52 million. There is no much change, but at the parent company it looks reduction. This reduction is just transfer of the assets from parent company to subsidiary company. Then comes the current assets. Current asset is OMR 43 million, quite stable of last year. Major component in that is the inventory. Last year we had OMR 14 million at the end of June. This year we have OMR 18 million. That's the reason our liquidity ratio was low.
Speaker #1: It is because of the transfer of the fixed assets of the bakery, related from the parent company to the group level. So if you see at the group level, 53 to 52.
Speaker #1: So there is no much change. But at the parent company, it looks reduction. But this reduction is just transfer of the assets. Parent company to subsidiary company.
Speaker #1: Then come the current assets. Current assets are $43 million, quite stable compared to last year. The major component in that is the inventory. Last year, we had $14 million at the end of June.
Speaker #1: This year, we have 18 million, and that's the reason our liquidity ratio was low. In order to ensure that we are not running short of inventory—though the wheat price is quite unstable and we are buying at a higher cost—we are still making sure that we have enough inventory.
[Company Representative] (Salalah Mills): In order to ensure that we are not running short of inventory, though the wheat price is quite unstable and we are buying at higher cost, still we are making sure that we have enough inventory. That's the reason inventory is high. Then the liability side of the balance sheet. Non-current liability first, which is OMR 7.3 million, as compared to OMR 25 million last year. This is again because we have shifted loan related to the bakery project to the subsidiary. You can see here the borrowing non-current assets, which was OMR 16.7 million last year, has come down to OMR 2.5 million. The difference is basically the term loan from Oman Development Bank shifted to the subsidiary food. Our short-term borrowing is stable, OMR 22.6 million last year, OMR 22.5 million this year. Because we have not changed anything in our working capital structure, it is quite same.
Ravi Tripathi: In order to ensure that we are not running short of inventory, though the wheat price is quite unstable and we are buying at higher cost, still we are making sure that we have enough inventory. That's the reason inventory is high. Then the liability side of the balance sheet. Non-current liability first, which is OMR 7.3 million, as compared to OMR 25 million last year. This is again because we have shifted loan related to the bakery project to the subsidiary. You can see here the borrowing non-current assets, which was OMR 16.7 million last year, has come down to OMR 2.5 million. The difference is basically the term loan from Oman Development Bank shifted to the subsidiary food. Our short-term borrowing is stable, OMR 22.6 million last year, OMR 22.5 million this year. Because we have not changed anything in our working capital structure, it is quite same.
Speaker #1: So that's the reason inventory is high. Then, on the liability side of the balance sheet: non-current liability first, which is $7.3 million, as compared to $25 million last year.
Speaker #1: And this is again because we have shifted the loan related to the bakery project to the subsidiary. So you can see the borrowing under non-current assets, which was $16.7 million last year, has come down to $2.5 million.
Speaker #1: So the difference is basically that the term loan from Oman Development Bank shifted to the subsidiary food. Our short-term borrowing is stable: 22.6 last year, 22.5 this year.
Speaker #1: Because we have not changed anything in our capital working capital structure, it is quite the same. Therefore, our total liability is $35 million.
[Company Representative] (Salalah Mills): Therefore, our total liability is OMR 35 million put together, non-current and current. Then the difference is the equity. OMR 46 million is our equity, which is consisting of OMR 17.5 million share capital, OMR 3.5 million share premium, OMR 2.5 million legal reserve, and OMR 2.8 million general reserve. Then there is a fair value reserve of OMR 933,000 on the investments. The OMR 20 million is the retained profits. Altogether is OMR 46 million. OMR 44.5 million was the last year's equity. At group level also it is same. This is our cash flow, snapshot of cash flow. Read the H1 2026 number. Profit before tax for this period is OMR 1.5 million, OMR 1.4 million. Then added back to that is the depreciation finance cost aside OMR 1.8 million. Our adjusted profit is OMR 3.2 million. Into that, we have generated additional cash from the working capital management. OMR 3.2 million plus OMR 6 million, OMR 9.2 million.
Ravi Tripathi: Therefore, our total liability is OMR 35 million put together, non-current and current. Then the difference is the equity. OMR 46 million is our equity, which is consisting of OMR 17.5 million share capital, OMR 3.5 million share premium, OMR 2.5 million legal reserve, and OMR 2.8 million general reserve. Then there is a fair value reserve of OMR 933,000 on the investments. The OMR 20 million is the retained profits. Altogether is OMR 46 million. OMR 44.5 million was the last year's equity. At group level also it is same. This is our cash flow, snapshot of cash flow. Read the H1 2026 number. Profit before tax for this period is OMR 1.5 million, OMR 1.4 million. Then added back to that is the depreciation finance cost aside OMR 1.8 million. Our adjusted profit is OMR 3.2 million. Into that, we have generated additional cash from the working capital management. OMR 3.2 million plus OMR 6 million, OMR 9.2 million.
Speaker #1: Put together non-current and current assets, and then the difference is the equity. 46 million is our equity, which consists of 17.5 million in share capital and 3.5 million in share premium.
Speaker #1: 2.5 is the legal reserve, and 2.8 is the general reserve. Then there is a fair value reserve of 936,000 on the investments, and the 20 million is the retained profits.
Speaker #1: So, altogether, it is 46 million. Forty-four point five was the last year's period. At group level also, it is the same. This is our cash flow snapshot of cash flow.
Speaker #1: I'll read the H1 2026 number. Profit before tax for this period is 1.5 million, 1.4 million, and then added back to that is the depreciation, finance cost, etc., which is 1.8 million.
Speaker #1: So our adjusted profit is $3.2 million. In addition to that, we have generated additional cash from the working capital management—so $3.2 million plus $6 million, totaling $9.2 million.
Speaker #1: And the 21 million and 30 million is basically the change in the non-current assets, the assets that we have shifted to the food, and the liability that we have shifted to the food.
[Company Representative] (Salalah Mills): The 21 million and 30 million is basically the change in the non-current assets, that assets that we have shifted to the group and the liability that we have shifted to the group. Those are the major components. If you adjust to and add back with the profit, we have a net cash generation of OMR 329,000. Opening cash was OMR 2.3 million; therefore, closing is OMR 2.6 million. All this detail is provided already on our stock exchange and our company website. If anyone wants to study a little bit more, they are welcome to go and do that. If there is any question on that, then of course, at the end of the session, we will take those questions. These are the major challenges we faced as a management during the last six months.
Ravi Tripathi: The 21 million and 30 million is basically the change in the non-current assets, that assets that we have shifted to the group and the liability that we have shifted to the group. Those are the major components. If you adjust to and add back with the profit, we have a net cash generation of OMR 329,000. Opening cash was OMR 2.3 million; therefore, closing is OMR 2.6 million. All this detail is provided already on our stock exchange and our company website. If anyone wants to study a little bit more, they are welcome to go and do that. If there is any question on that, then of course, at the end of the session, we will take those questions. These are the major challenges we faced as a management during the last six months.
Speaker #1: So those are the major components. So if you adjust to and add back with the profit, we have a net cash generation of 329,000.
Speaker #1: The opening cash was 2.3 million, therefore closing is 2.6 million. All these details are already provided on our stock exchange and our company website.
Speaker #1: If anyone wants to study a little bit more, they are welcome to go and do that. If there are any questions on that, then of course at the end of the session we will take those questions.
Speaker #1: And these are the major challenges we faced as a management during the last six months. As we said that our volume manufactured volume was quite stable as compared to we tried to make it stable though there was a lot of challenges in the this period.
[Company Representative] (Salalah Mills): As we said that our manufactured volume was quite stable as compared to. We tried to make it stable, though there was a lot of challenges in this period, particularly from the export market. Yemen actually imposed import duty. There was no duty before, but they import 20% import duty. That had affected our export into that particular business. Margin pressure is already there because of the wheat price and then the logistic cost gone up. This War Risk Insurance, which was not a requirement, but they said we need to compulsorily have a War Risk Insurance. That is additional cost. Then these two subsidiaries, bakery and laboratory, we are still ramping up. But there is a fixed cost. So, the ROI and all is not commensurate to that. Supply chain instability and all those things are there.
Ravi Tripathi: As we said that our manufactured volume was quite stable as compared to. We tried to make it stable, though there was a lot of challenges in this period, particularly from the export market. Yemen actually imposed import duty. There was no duty before, but they import 20% import duty. That had affected our export into that particular business. Margin pressure is already there because of the wheat price and then the logistic cost gone up. This War Risk Insurance, which was not a requirement, but they said we need to compulsorily have a War Risk Insurance. That is additional cost. Then these two subsidiaries, bakery and laboratory, we are still ramping up. But there is a fixed cost. So, the ROI and all is not commensurate to that. Supply chain instability and all those things are there.
Speaker #1: Particularly from the export market. EMN actually imposed the import duty. There was no duty before, but now there is a 20% import duty. So, that had affected our export into that particular business.
Speaker #1: Margin pressure is already there because of the wheat price and then the logistic cost gone up. Is war insurance which was not a requirement but they say we need to compulsorily have a war insurance.
Speaker #1: So, that is the additional cost. Then these two subsidiaries—the bakery and the laboratory—we are still ramping up. But there is a fixed cost.
Speaker #1: So, the ROI and all is not commensurate to that, and supply chain instability and all those things are there. So we are addressing that, and we don't see there is any concern.
[Company Representative] (Salalah Mills): We are addressing that, and we don't see there is any concern. But of course, this is not a Salalah Mills specific challenge or it is an Oman specific challenge. It is a global challenge. Everybody is trying to face this, and so as we. I mean, it is affecting, but it's not that something we need to worry about. There is a mitigation plan in place, and hopefully H2 of this year, we will believe that we will be better. Then I will pass on to CEO to talk about the strategic initiative, and then maybe follow up.
Ravi Tripathi: We are addressing that, and we don't see there is any concern. But of course, this is not a Salalah Mills specific challenge or it is an Oman specific challenge. It is a global challenge. Everybody is trying to face this, and so as we. I mean, it is affecting, but it's not that something we need to worry about. There is a mitigation plan in place, and hopefully H2 of this year, we will believe that we will be better. Then I will pass on to CEO to talk about the strategic initiative, and then maybe follow up.
Speaker #1: But of course, this is not a Salalah Mills-specific challenge. It is an Oman-specific challenge. It is a global challenge. Everybody is trying to face this, and so are we. But this is not affecting— I mean, it is affecting, but it's not something we need to worry about.
Speaker #1: There is a mitigation plan in place, and hopefully in the second half of this year, we believe that it will be better. And then I will pass on to the CEO to talk about the strategic initiative and the way forward.
Speaker #1: Yeah. Thank you, Mr. Ravi. And thank you, everybody, for your listening as well. Although, as Mr. Ravi was saying, it was a challenging first half of the year.
[Company Representative] (Salalah Mills): Yeah. Thank you, Mr. Ravi, and thank you everybody for your listening as well. Although as Ravi was saying, it was a challenging H1 of the year. I mean, the aftermath of this destructive geopolitical situation in the region continues to shed some shadows on the operations. But on a positive side, we have ramped up a lot of new plans. We have approved a new strategy for the group going forward. We are trying to focus on new segments. We have signed already few strategic partnerships and offtake agreements. Hopefully they will see the light in this quarter itself. We are confident that the situation is going to improve going forward. Some of these prices are still a concern, especially also the conflict in the Black Sea is still continuing. Some of our requirements for grains come from that particular origin.
Ali Bakheet Kashob: Yeah. Thank you, Mr. Ravi, and thank you everybody for your listening as well. Although as Ravi was saying, it was a challenging H1 of the year. I mean, the aftermath of this destructive geopolitical situation in the region continues to shed some shadows on the operations. But on a positive side, we have ramped up a lot of new plans. We have approved a new strategy for the group going forward. We are trying to focus on new segments. We have signed already few strategic partnerships and offtake agreements. Hopefully they will see the light in this quarter itself. We are confident that the situation is going to improve going forward. Some of these prices are still a concern, especially also the conflict in the Black Sea is still continuing. Some of our requirements for grains come from that particular origin.
Speaker #1: I mean, the aftermath of this disruptive geopolitical situation in the region continues to cast some shadows on the operations. But on a positive side, we have ramped up a lot of new plans.
Speaker #1: We have approved a new strategy for the group going forward. We are trying to focus on new segments. We have already signed a few strategic partnerships and offtake agreements.
Speaker #1: Hopefully, they will see the light in this quarter itself. We are confident that the situation is going to improve going forward. Some of these prices are still a concern, especially as the conflict in the Black Sea is still continuing.
Speaker #1: Some of our requirements for grains come from that particular origin. But on the positive side, Salalah and Oman in general enjoy the geographical location outside of the Strait of Hormuz.
[Company Representative] (Salalah Mills): The positive side that Salalah and Oman in general enjoys the geographical location outside of the state foremost, and a lot of plans are actually in place to start multiple sourcing. We are confident as executive management of the next half of the year. Usually Q2 and Q3 are. Q2 is the toughest. Things get back to normal in Q3, and usually Q4 is the best time of the year, and we have already seen some signs of that, both for local demand and regional demand as well. Some markets are stabilizing. Somalia and Yemen, hopefully to follow. The duty imports hiking prices have start showing some signs of relief, and we will already start resuming aggressive exports to those markets. In a nutshell, we are confident that H2 will be much better than H1.
Ali Bakheet Kashob: The positive side that Salalah and Oman in general enjoys the geographical location outside of the state foremost, and a lot of plans are actually in place to start multiple sourcing. We are confident as executive management of the next half of the year. Usually Q2 and Q3 are. Q2 is the toughest. Things get back to normal in Q3, and usually Q4 is the best time of the year, and we have already seen some signs of that, both for local demand and regional demand as well. Some markets are stabilizing. Somalia and Yemen, hopefully to follow. The duty imports hiking prices have start showing some signs of relief, and we will already start resuming aggressive exports to those markets. In a nutshell, we are confident that H2 will be much better than H1.
Speaker #1: And a lot of plans are actually in place to start multiple sourcing. So we are confident, as executive management, about the next half of the year. Usually, Q2 and Q3—Q2 is the toughest.
Speaker #1: Things get back to normal in Q3, and usually Q4 is the best time of the year. We have already seen some signs of that.
Speaker #1: Both for local demand and regional demand as well. Some markets are stabilizing. Somalia and Yemen, hopefully, will follow. The duty on imports hiking prices has started showing some signs of relief.
Speaker #1: And we will already start resuming aggressive exports to those markets. So, in a nutshell, we are confident that H2 will be much better than H1.
Speaker #1: And hopefully, when we meet you next time, I mean the results, inshallah, will be very, very different. Hopefully, inshallah.
[Company Representative] (Salalah Mills): Hopefully when we meet you next time, I mean, the results, inshallah, will be very, very different. Hopefully, inshallah.
Ali Bakheet Kashob: Hopefully when we meet you next time, I mean, the results, inshallah, will be very, very different. Hopefully, inshallah.
Speaker #2: Thank you. Thank you, Mr. Ali. So this is all from our side as far as the presentation is concerned. And now we will open the floor for questions. If there are any questions, we are happy to take them up.
[Company Representative] (Salalah Mills): Thank you. Thank you, Mr. Ali. This is all from our side as far as presentation is concerned. Now we will open the floor for the questions. If there is any questions, we are happy to take it up. Any question, please, from any of the investors, analysts.
Ravi Tripathi: Thank you. Thank you, Mr. Ali. This is all from our side as far as presentation is concerned. Now we will open the floor for the questions. If there is any questions, we are happy to take it up. Any question, please, from any of the investors, analysts.
Speaker #2: Are there any questions from any of the investors? Please provide them in a list.
Speaker #1: All right. If there are no questions, we thank you so much, gentlemen, for your time and your presence today. We look forward to welcoming you to other briefings in the future, inshallah.
[Company Representative] (Salalah Mills): All right. If no questions, we thank you so much, gentlemen, for your time and your presence today. We look forward to welcome you into other briefings in future, inshallah. Thank you so much.
Ravi Tripathi: All right. If no questions, we thank you so much, gentlemen, for your time and your presence today. We look forward to welcome you into other briefings in future, inshallah. Thank you so much.
Speaker #1: Thank you so much.
[Company Representative] (Salalah Mills): The recording has stopped.
