APi Group (NYSE:APG) Q4 2025 Earnings call February 25, 2026 08:30 AM ET Speaker11Good morning, ladies and gentlemen, welcome to APi Group's fourth quarter and full year 2025 financial results conference call. All participants are now in a listen-only mode until the question and answer session. We ask that all participants limit themselves to one question during the question and answer session. Please note, this call is being recorded. I will be standing by should you need any assistance. I will now turn th ...

Financial Data and Key Metrics Changes - In 2022, the revenue was RMB 3.5 billion, with a net profit attributable to shareholders of RMB 290 million, marking a substantial increase year on year and a return to pre-COVID levels [4][5] - Free cash flow reached RMB 430 million, an increase of approximately RMB 70 million, and return on equity exceeded pre-epidemic levels at 9.9%, up 7.3% since 2021 [11][12] - The gearing ratio decreased from 68.9% before the epidemic to 58.7%, and debt over EBITDA dropped from 4.6 to 2.0, indicating a more stable capital structure [13] Business Line Data and Key Metrics Changes - Revenue from overseas markets reached RMB 1.5 billion, an increase of 48%, while revenue from other overseas markets was RMB 490 million, up 16.2% [7] - New business products, including oilfield management, inspection, and asset leasing, contributed significantly to revenue, increasing by 23% year on year [8] - The precision engineering technology services achieved a threefold increase in local production, contributing to customer incentives beyond engineering service fees [9] Market Data and Key Metrics Changes - The domestic market maintained stable revenue despite pandemic challenges, with a return to growth trajectory [5][8] - The company plans to focus on the development of natural gas markets in China and expand into international markets, including Iraq and West Africa [16][17] Company Strategy and Development Direction - The company aims to become an innovative global leading oilfield services provider, focusing on differentiated competitive advantages and breakthrough contributions to customers [51][52] - Plans include promoting precision engineering technology, developing unique and innovative businesses, and leveraging data-driven operations to improve efficiency [14][15][26] - The launch of an e-commerce platform, AT Mall, aims to empower oil companies and suppliers, facilitating transactions and enhancing market presence [17][58] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in overcoming past challenges, with expectations for stable growth in the oil and gas development market as supply gaps widen [15][16] - The company anticipates that the cancellation of pandemic control measures will positively impact profit margins in 2023 [33] - Management highlighted the importance of innovation and tailored project solutions to enhance customer value and drive growth [56][57] Other Important Information - The wholly-owned subsidiary, Qiol Inspection Group, is set to spin off and list on the Shenzhen Stock Exchange by the end of 2025, with profit agreements in place with strategic investors [36][37] - The company has achieved a significant milestone in the Indonesian market, with a four to five times increase in overall order volume compared to previous years [37] Q&A Session Summary Question: What is the reason for the EBITDA margin drop in the group's segments? - The decrease is attributed to pandemic control measures affecting project execution in key markets, leading to a revenue drop of around RMB 450 million, while fixed costs remained [31] - Inflation also impacted margins, with rising raw material prices affecting cost delivery to customers [32] Question: What is the current status of the TOR inspection group's spin-off project? - The spin-off is planned for listing on the Shenzhen Stock Exchange by the end of 2025, with a profit requirement of RMB 130 million for this year, which is a 30% increase from 2022 [36][37] Question: Can you provide details on the company's cash on hand? - As of the end of 2022, the company had RMB 727 million in cash, with RMB 155 million from TOR's strategic investors included [37][38] Question: What is the company's CapEx expenditure plan for 2023? - The company plans to maintain consistent CapEx spending within impairment limits, focusing on asset leasing platform construction [45][46]