Earnings call transcript: Qatar Fuel sees revenue drop in Q2 2025

Qatar Fuel reported a challenging second quarter in 2025, with total revenue declining by 11% year-over-year to QAR 12.5 billion. Net income also fell by 4.5% to QAR 460 million. Despite these declines, the stock price of Qatar Fuel rose slightly by 0.72% to 15.26, reflecting a cautious but optimistic market sentiment. According to InvestingPro data, the company maintains a strong financial health score of "Good" and holds more cash than debt on its balance sheet. The company continues to hold a dominant position with an 85% market share in Qatar’s petroleum retail market.

Key Takeaways

• Revenue decreased by 11% year-over-year, driven by a drop in fuel sales volume and prices.
• Net income fell by 4.5%, reflecting challenges in maintaining profitability.
• Qatar Fuel’s stock price increased by 0.72%, showing a modest positive market reaction.
• The company is expanding its EV charging infrastructure, preparing for future demand.
• Qatar Fuel maintains a strong market position with 85% market share in Qatar.

Company Performance

Qatar Fuel experienced a decline in both revenue and net income during Q2 2025. The company’s performance was affected by a 1% decrease in fuel sales volume and a 10% decrease in average sales prices. With a market capitalization of $4.2 billion and a P/E ratio of 14.63, InvestingPro analysis suggests the stock is trading at a premium relative to near-term earnings growth. Despite these challenges, the company is focusing on cost optimization and expanding its services, including the installation of 25 EV charging stations.

Financial Highlights

• Total Revenue: QAR 12.5 billion (11% decrease year-over-year)
• Net Income: QAR 460 million (4.5% decrease year-over-year)
• Interim Dividend: QAR 0.4 per share

Market Reaction

Qatar Fuel’s stock price saw a slight increase of 0.72% to 15.26, reflecting cautious optimism among investors. The stock is trading near its 52-week high, indicating resilience despite the revenue and income declines.

Outlook & Guidance

Looking forward, Qatar Fuel expects higher demand in the second half of the year and is preparing for potential infrastructure projects. The company is also strategizing to improve its non-fuel retail segment and remains committed to safety and strategic goals.

Executive Commentary

Varejeet Kumar, CFO, emphasized the company’s responsiveness to market demands, stating, "We distribute whatever the market demands." He also highlighted the company’s proactive approach, saying, "Vukuri is preparing for any future demand."

Risks and Challenges

• Declining fuel sales volumes and prices could continue to impact revenue.
• Lower dividend income and interest rates may affect investor returns.
• Volatility in oil prices could pose challenges for future profitability.
• Competition and market saturation in the fuel industry present ongoing risks.
• Economic conditions in Qatar and the broader region could influence future performance.

Q&A

During the earnings call, analysts inquired about demand expectations for the second half of the year, the dynamics of the jet fuel market, and the company’s strategies for expanding the EV charging infrastructure. The management addressed these concerns, emphasizing their commitment to meeting market demands and improving non-fuel retail segments.

Full transcript - Qatar Fuel (QFLS) Q2 2025:

Angela, Conference Moderator: Hello, and welcome to Vuclad Conference Call. Please note that this call is being recorded. You will have the opportunity to ask questions for our speakers later on during the Q and A session. Thank you. Now I would like to hand the call over to Fabian.

You may begin.

Fabian, Unspecified Management Role, Vuclad/Wahud: Thank you, Angela. Good morning to you all, and thank you for joining us this morning for Wookud’s second quarter or first half of twenty twenty five earnings conference call. On today’s call from the Woolkud management team, we’ve got three members. The CFO, Pratikuma the finance manager, Abdura Manalhamadi and the the IR officer, Akhmad Syed Alman Suri. And as usual, they will first present the numbers, and they will have a q and a session immediately afterwards.

Let me turn over the call to Akmat to begin. Over to you, sir. Please go ahead.

Akhmad Syed Alman Suri, IR Officer, Wahud: Thank you, Fabien. Good day to all the participants, and we hope everyone is keeping safe and healthy. We welcome you all to Rakuten’s second quarter end June twenty twenty five results conference call and appreciate your participation as Rakuten is committed to continuously enhance investor relations initiatives. This is despite that our communication has improved transparency with all members of the global investment community. The presentation of this call will be available on the Investor Relations section of our website.

Any statement that refers to expectations, projections, guidance or any other characterization of future events, including financial projections of future market conditions, that are forward looking statements based on the assumptions today. Actual results may differ materially from those expressed in these forward looking statements. The company cannot disclose any commercially sensitive information due to the confidentiality agreement signed with suppliers. Please refer to Slide two for the full version of the disclaimer statement. Also, you have expressed in this call on Qatar real and the conversion for the same U.

S. Dollar is Qatar real 3.64 to $1 Now I would like to hand over the call to our Finance Manager, Mr. Adohman Kamadi, to provide a brief overview of Wahud and update on the key operation activities. Thanks, Zafman. The key vision of Wahud is to be the leading petroleum product distribution and related to services marketing company in the region.

On Slide four, which shows the overview of Wakod Group. Wakod started operation in 2002 the exclusive rights for the storage and distribution of petroleum products in the state of Qatar. Operations started with two patrol stations in 2003 and has grown to 125 stations at the June 2025. The chart on the right shows Wahud stations at work. Wahud also owns and operates 13 parts of center for inspection vehicles across the state of Qatar.

Slide number five, which shows the key operations of Wahud Group. The key operations of Fekadu Group are diesel and gasoline fuel distribution and sales, jet fuel distributions and sales, shop to ship and ship to ship anchoring, LED distribution sales, natural gas distributions and sales, the fuel banqueting, bitumen operations, t store and auto care activities, vehicle inspection services and office leasing. Turning Slide seven, which shows the diesel and gasoline fuel sales volume trend analysis. As mentioned before, the core activities of Wahud is the fuel distributions and sales in the state of Qatar. The total fuel sales lowered by 1% during the first half twenty twenty five versus first half twenty twenty four, driven by market demand.

Diesel sales volume decreased by 2% during the first half twenty twenty five versus the same period last year, driven by macroeconomic factors. Combined gasoline sales volume increased by 2% in first half twenty twenty five as compared to first half twenty twenty four. On a quarter on quarter basis, sales volume for second quarter twenty twenty five increased by 125% for diesel and gasoline, respectively. Average fuel price for diesel and gasoline decreased by 21% in half twenty twenty five compared to the same period last year. Turning Slide eight, which shows the jet fuel sales volume comparison.

Jetty Fuel sales were lower by 2% for the first half twenty twenty five as compared to the same period last year, driven by market demand. On a quarter on quarter basis, jet fuel sales volume for second quarter twenty twenty five increased by six percent, driven by market demand. Jet fuel price for the first half twenty twenty five decreased by 15% as compared to the same period last year, driven by change in old oil prices. Combined sales volume for all petroleum products decreased by 1% for first half twenty twenty five as compared to the same period last year. Turning Slide nine, which shows the quarterly trend of retail fuel sales volume trend.

Overall, retail fuel volume of Wapoo Detour station increased by 2% for first half twenty twenty five against the same period last year, driven by increased market demand on quarter on quarter versus retail fuel volume. And the second quarter twenty twenty five increased by 65% for diesel and gasoline, respectively. The market share of copper in the petroleum retail market in the state of Qatar reached about 85% during the first half twenty twenty five. Nonfuel retail sales decreased by 9% during the first half twenty twenty five, mainly on account of decrease in RBC. Now I would like to hand over the call to our CFO, Mr.

Varejeet Kumar, to discuss the key financial results.

Varejeet Kumar, CFO, Wahud: Thanks, Abdulrahman, for all the volume update. Good day, everyone. I would like to discuss the consolidated financial results of Vokut for the first half of twenty twenty five. Slide 11 shows the revenue trends of Vokut. Revenue from fuel sales account for nearly 97 percentage of the total revenue.

Vukoot achieved total revenue of Qatar Rial 12,500,000,000.0 during the first half of twenty twenty five as compared to Qatar Real 13,900,000,000.0 during the same period last year, showing a decrease of 11 percentage, which is mainly driven by overall decrease in fuel sales volume by one percentage and decrease in average sales price by 10 percentage. On a quarter on quarter comparison basis, the total revenue decreased by three percentage during the second quarter twenty twenty five, mainly driven by increase in sales volume by six percentage, partially offset by decrease in average sales price by eight percentage. Turning to slide 12. Of course, past May and net income of. One second.

Turning to Slide 12, which shows the net income trends analysis. Vukut has made a net income of Qatar Riyadh $460,000,000 for the first half of twenty twenty five, lower by 4.5 percentage as compared to the same period last year, mainly due to decrease in overall fuel sales volume by one percentage and decrease in other income. UCOO has made a net income of R230 million for the second quarter twenty twenty five as compared to R230 million during the same period in ’twenty four, representing a decrease of four percentage. On a quarter on quarter basis, the net income for second quarter twenty twenty five remained stable at $230,000,000. The detailed analysis of net income variance is given in the next slide.

Slide 13 shows the key variance analysis of net income for the first half of twenty twenty five as compared to same period last year. The decrease in net income of R3.22 million is due to the following major factors. Net operating margin increased mainly driven by cost optimization initiatives, partly offset by the lower volume. B2B segment margin increased mainly due to higher transportation income during first half of twenty twenty five as compared to same period last year. Trading stock price variance is mainly driven by impact of price movements, mainly on jet fuel inventory.

Dividend income and others, lower mainly driven by timing of interim dividend and lower interest rates, due to prevailing market conditions, which is partly offset by lower G and A expenses. Based on the earnings of first half of twenty twenty five, the Board has approved an interim dividend of BRL 0.4 per share. Vukund’s fundamentals continue to remain robust, and Vuco is committed to meet all its strategic goals while placing safety as the top priority. Vuco has a strong leadership committed towards delivering results to the shareholders. With this, we are ready for the q and a session.

Thank you.

Angela, Conference Moderator: Thank you. We will now begin the question and answer session. Your first question comes from the line of Rob Kepper with Ashmore.

Rob Kepper, Analyst, Ashmore: Hi. Hi, everyone. Thanks for the thanks for the time today on the call. Much appreciated as always. Yeah.

Few few questions from me, if I may. I guess, firstly, on the the core business, maybe thinking about volumes a little bit. So yeah. I mean, we saw some recovery in diesel and gasoline in the quarter. Obviously, jet fuel volume still still slightly below.

But, yeah, how are you kind of thinking on the volume side into the second half? Are there are there any kind of visible demand catalysts which could help firm things up at all to your mind?

Varejeet Kumar, CFO, Wahud: Thank you. It’s, you know, being a sole distributor, you know, we distribute whatever the market demands and purely depending on the market demand. However, you know, traditionally, we’ve seen the demand for the second half come back to really higher, so we expect the same this year as well.

Rob Kepper, Analyst, Ashmore: Okay. And just specifically on the the jet fuel side of things, just thinking about kind of end customer mix there, like Qatar Airways, foreign carriers, noncommercial jet fuel volumes, like, what’s happening? Can you give us some color on the end markets there specifically for the end customers?

Varejeet Kumar, CFO, Wahud: Definitely, Qatar Airways dominate the market on the fifth wheel.

Rob Kepper, Analyst, Ashmore: Okay. And so you’re seeing weakness from from them essentially? Or there’s other other weakness as well?

Varejeet Kumar, CFO, Wahud: Other other players also in the market, but, you know, very minor as compared to Patrese.

Rob Kepper, Analyst, Ashmore: Yeah. Okay. Just thinking about kind of the margins in this price environment, like, in the second quarter, after we look at underlying Brent prices, they saw massive volatility. Right? Start of the quarter, huge collapse in oil price from tariff use out of The US, And then later in the quarter, huge geopolitical premium, which premium again in the oil price all in the space of one quarter, like I mean, how did this impact, like, the margins at all?

Like, I know, obviously, you get that piece on slide 13 with the income there and this kind of trading trading stock price volatility. But I just wondered, is there anything you do on procurement when prices are low to try and mitigate? Do you kinda ease off when prices are high? Like, yeah, how does that impact the business at all?

Varejeet Kumar, CFO, Wahud: Well, for us, the supply price are regulated by the state of Qatar Qatar Energy. And on the other side, definitely, the major impact is on our trading US stocks, which we kind of manage from quarter to quarter.

Rob Kepper, Analyst, Ashmore: Yeah. Okay. And then the last question I had was just on kind of the non non fuel and maybe some of their comments from the EV side of things. So yeah. I guess, I think you’re kinda continuing to roll out kind of EV charges throughout the network.

And you’ve done a bit of optimization of kind of non fuel retail. But I guess looking at that non fuel business, it’s kind of declined, kind of double digit decline last year and still seems a little bit weak. Is there anything on the non fuel side of things that you’re kinda looking at strategically or how should we think about kind of profitability going forward?

Varejeet Kumar, CFO, Wahud: Well, on first part of your question on the EV segment, yeah, Vukuri is preparing for any future demand. We already have 25 EVs installed to meet the demand in future. On the other side, non fuel segment definitely facing lot of headwinds from the market, and we are strategizing to improve that area, and we are focusing on that area also in future.

Rob Kepper, Analyst, Ashmore: Okay. Do you it’s a sort of an ongoing process at the moment. Like, would you expect to communicate something around some of those initiatives on kind of the next quarterly call or sometime later? Is there a timeline for that?

Varejeet Kumar, CFO, Wahud: Well, we are working on it and working on, you know, many verticals associated with the retail segment to improve it, which we are we are working on it at this point.

Rob Kepper, Analyst, Ashmore: Okay. Brilliant. Great. Thanks very much. Thank you.

Angela, Conference Moderator: Your next question comes from the line of Zohai Pervez with Alrayan Investment. Your line is now open.

Zohai Pervez, Analyst, Alrayan Investment: Thank you, gentlemen, for the presentation. So the number of projects that have been announced by the government, you know, like, cement smelter, etcetera. Do you are you seeing any improvement in your bulk diesel business because of, you know, of these projects? Or are you seeing any inquiries, etcetera, you know, due to project development improvement. My second question is on the price of jet fuel.

So jet fuel price, has it come down even more further quarter over quarter in the second quarter? Thank you.

Varejeet Kumar, CFO, Wahud: On your first part of the question regarding the development, definitely, we expect that, you know, such developments will contribute to increase in our bulk sales, and we are looking forward to that. On the other side, yes, if you will was more during the first half and definitely just reduced in the first quarter as well as the second quarter.

Zohai Pervez, Analyst, Alrayan Investment: Thank you. But you don’t you still haven’t seen any movement on the bulk. So so the bulk volume levels, you must still lower for the for diesel because of the slowdown in economic activity?

Varejeet Kumar, CFO, Wahud: We can see some flow, you know, picking up in the second quarter, but definitely, you know, we look looking forward to major projects to pick up considerably in that segment.

Zohai Pervez, Analyst, Alrayan Investment: Okay. Thank you.

Angela, Conference Moderator: There are no further questions. I would now like to hand the call back over to Sibion for any closing remarks.

Fabian, Unspecified Management Role, Vuclad/Wahud: Thank you, Angela. If there are no further questions, it brings us to the end of our call today. I would like to thank the management team for taking time to update and respond to investor questions. Please do join us for future calls, and enjoy the rest of your day.

Angela, Conference Moderator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect.

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