OER presents our sixteenth annual review of Oman’s top twenty leading listed companies for the year 2014

As stated in a World Bank report, the global economy is still struggling to gain momentum as many high-income countries continue to grapple with legacies of the global financial crisis and emerging economies are less dynamic than in the past. Growth picked up only marginally in 2014, to 2.6 per cent, from 2.5 per cent in 2013. Beneath these headline numbers, increasingly divergent trends are at work in major economies. The advanced economies achieved a below trend average growth of 2.2 per cent whereas many emerging markets also experienced a slow down to below trend growth of 4.6 per cent. Global GDP growth was 3.3 per cent in 2014.
While activities in US and UK gathered momentum as labour markets heal and monetary policy remains extremely accommodative, the recovery has been sputtering in the Euro area and Japan as legacies of the financial crisis linger, intertwined with structural bottlenecks. China, meanwhile, is undergoing a carefully managed slowdown. Disappointing growth in other developing countries in 2014 reflected weak external demand, but also domestic policy tightening, political uncertainties and supply-side constraints.
The year 2014 saw the halving of oil prices which eroded the Omani revenue as the economy depends on oil income to the extent of about 80 per cent of its total revenue. In spite of this substantial reduction in the oil price, the GDP at current prices registered a growth rate of 5.2 per cent to RO23.62bn compared to last year. The year 2014 closed with an average oil price of $103.23 per barrel compared with an average price of $105.51 in 2013 and the budgeted price of $85 for 2014.
Oil production in 2014 increased again marginally to 943,500 barrels per day. The government’s continued emphasis on diversifying the economy away from dependence on oil continued to gain further momentum during 2014. Non-oil revenues grew by about 8.2 per cent.
The year 2014 was a challenging year for world stock markets. Among the developed markets US was the best registering a 12.8 per cent return. European markets were, mainly, disappointing. In dollar terms, Germany returned (10.6 per cent), France (10.4 per cent), Spain (4.1 per cent) and UK (8.2 per cent). Japan declined (five per cent). Emerging markets were mixed with India up 19.9 per cent, China up 4.7 per cent and Brazil down (17.4 per cent). West Texas Intermediate (WTI) oil price during the year ranged from $106 per barrel to around $59 and closing the year at about $59. Gold declined from $1,204 per ounce at the beginning of the year to $1,189 per ounce by the end of 2014.
For the year 2014, the MSM Index decreased by 7.19 per cent. This is compared to an increase of 18.64 per cent in the previous year. The industrial sector was the largest loser at 19.61 per cent for the year 2014. The financial sector was next which decreased by 5.44 per cent for the year. The services sector closed the year with a loss of 5.28 per cent. A total of 6.7 billion shares got traded during the year amounting to an aggregate turnover of RO2.27bn, which was up by about 0.61 per cent compared to 2013. The MSM 30 Index started the year at 7,087 closing the year at 6,343 points. With a negative return of (7.19 per cent) for the year, the MSM was the worst performing market in the GCC. Qatar was the best performing showing a gain of 18.36 per cent followed by Bahrain in the second position with a return of 14.23 per cent. UAE followed in third place with a return of 11.99 per cent, with Saudi being fourth at 2.37 per cent and Kuwait fifth with 3.09 per cent.
During the year 2014, the revenues of Oman’s 20 largest companies showed an increase of RO155mn. Total revenues for the OER Top 20 companies increased by four per cent to RO4,272mn. Corporate performance for the year 2014, overall, also increased. The profits for the year 2014 increased by two per cent to RO577mn from RO565mn in 2013. The total market cap of the OER Top 20 companies on December 31, 2014 was RO5,594mn, which decreased by two per cent compared to 2013. On March 31, 2015 the market cap of the Top 20 decreased further to RO5,317mn. The OER Top 20 companies represented 38 per cent of the total market cap of the MSM of RO14,560mn at the end of 2014. The average P/E ratio of the OER Top 20 based on the profits for the year 2014 and the share price on March 31, 2015 was 11.16 times earnings.
Who is out and who is in
Al Hasan Engineering is back in the OER Top 20 this year coming in the 19th place at the expense of Semcorp Salalah Power & Water Company which is no longer on the list. There are no other new companies on the OER Top 20 this year. The ranking of Oman’s 20 largest companies in order of revenue produces a list, which includes the seven companies from the services sector, nine companies from the industrial sector, and four from the financial sector.
Bank Muscat has risen to the number one position becoming the largest company in Oman at the expense of Omantel which has slipped to the number two position. Bank Muscat has shown a growth in revenue of 10.34 per cent compared to 2013. Galfar has moved up one place to the third position, Al Maha has moved up one place to the fourth place and Shell has slipped two places to the number five position.
Bank Muscat’s chairman Khalid bin Mustahail al Mashani states in his year-end report to the shareholders that the results achieved have been encouraging despite the challenging global economic and financial situation, marked by volatile oil prices in the last quarter of 2014, the key business lines of the bank recorded a healthy performance on expected lines. He explains that the bank achieved a net profit of RO163.23mn as against a net profit of RO152.2mn in 2013, an increase of 7.3 percent.
Al Mashani adds that during 2014, the basic earnings per share was RO0.075 as against RO0.072 in 2013. The bank’s capital adequacy ratio stood at 15.92 per cent against the minimum required level of 12.625 per cent as per Basel III regulations issued by the Central Bank of Oman. He goes on to say that the board has proposed a dividend of 45 per cent , 25 per cent in the form of cash, five per cent in the form of bonus shares and 15 per cent in the form of mandatory convertible bonds.
Al Mashani advises that the overall economic outlook for 2015 remains strong owing to stable fundamentals and expansive policies to support growth in both the oil and non-oil sectors. He states that the government has announced a 4.5 per cent increase in spending to support this growth. The banking sector will also benefit from these policies.
The top five most profitable companies in Oman are the same as last year with three banks and two telecom companies. Bank Muscat retains the number one position as the most profitable company in 2014. Omantel continues at the number two position. National Bank of Oman (NBO) has moved up one place to the number three slot. BankDhofar has moved down one to the number four position. Oman Qatari Telecom (Ooredoo) remains at the number five position.
Omantel is the second most profitable company in Oman as well as the number two in Oman based on turnover for the year 2014. Omantel continues to retain the number two most profitable position from 2013, and has recorded a growth in profit for the year of about 0.29 per cent.
In his report to the shareholders, Eng Sultan Hamdoon al Harthy, chairman of Omantel, explains that the total revenue increased by four per cent. The increase is contributed by service, wholesale and mobile business segments. He further explains that the total operating expenses increased by 2.8 per cent. Al Harthy states that the group has achieved a net profit after tax of RO115.551mn compared to the net profit of RO115.217mn in 2014 – an increase of 0.29 per cent. He adds that the total subscriber base has recorded a growth of 6.8 per cent. The total number of subscribers has increased to 4.296mn compared to four million in 2013.
Al Harthy states that the market dynamics in the Omani telecom market context are changing substantially. In order to tackle these market dynamics, Al Harthy states that Omantel has developed a new corporate strategy with a focus on maximising the share of the wallet and value per customer, through expansion beyond the current core business, and has become a key differentiator, companion of choice and creator and enabler of digital ecosystems. The execution of this strategy will enable Omantel to maintain its leading position in the market and continue to maximise returns to the shareholders.
Renaissance Services has shown the highest growth in profits by an enormous 35.43 per cent and comes in straight at the number one spot followed closely by NBO, which has shown growth in profits by 21.49 per cent. Three of the five top companies showing the highest growth of profit from 2013 (NBO, Al Maha Petroleum and Oman Flour) are new on the list. National Gas has slipped two places to the third position and Sembcorp, Oman Cable and BankDhofar, which were on this list last year, have all dropped off.
Chairman of Renaissance, Samir J Fancy, states in his report to the shareholders for the year ended December 31, 2014, that the 2014 financial performance reflects growth in the operating businesses; and positive reduction and containment of one-off impacts, which tempered results in 2013. The group turnover increased to RO252mn from 239mn in 2013, an increase of 5.4 per cent. The net profit for the year increased to RO25.43mn from RO18.78mn in 2013, an increase of 35 per cent.
Fancy adds that the board was recommending a cash dividend of 10 per cent.
Fancy explains that the operating profit of Topaz for the year was RO53mn and Topaz had crossed an important milestone of achieving EBITDA in excess of $200mn. In Qtr3 Standard Chartered Private Equity acquired a 9.8 per cent stake in Topaz for an investment of $75mn. Whereas Renaissance Contract Services Group made an operating profit of RO11.9mn. In Qtr4 the company was able to secure a full equity raise of RO75mn for the Duqm PAC project of which Renaissance subscribed to 51.9 per cent.
Fancy cautions that the strategic commitment to long term presence and growth in West Africa will give some serious challenges in the first half of 2015 in the wake of the oil price crisis. However this is mitigated by the stability of the business model of established medium to long term contracts.
Three of the top five companies that have the highest amount of equity employed are from the financial sector. Four of the five of the companies in this category remain the same as last year. The newcomer on the list at number five is Renaissance Services who has replaced Ominvest.
In his report to the shareholders, chairman of NBO, Mohammed Mahfoodh Al Ardhi, states that the bank achieved a net profit of RO50.3mn for the year compared to RO41.4mn for 2013, an increase of 21 per cent. Al Ardhi remarks that the bank experienced margin pressure on assets but was able to make corresponding reductions in its deposit expenses. The year also witnessed a successful issue of a five year $500mn bond. During the year the bank opened a branch in Dubai. The UAE operations recorded a strong performance in 2014 with a growth of 157 per cent and an increase in profits of 100 per cent. Al Ardhi adds that the board has recommended a cash dividend of RO0.017 per share and a stock dividend of 10 per cent this year based on the dividend policy approved by the board of directors.
Al Ardhi states that the outlook for Oman’s economy, despite falling oil prices, remains positive. The increase in government spending and the focus on infrastructure projects are expected to boost economic growth and diversification.
In 2014, three of the top five companies that have the highest market capitalisation on the MSM, were banks. Omantel has overtaken Bank Muscat to take the number one spot and Bank Muscat has slipped one space to the number two position. Ooredoo has jumped two places to occupy the third position. Bank Dhofar retains the number four spot as 2013 and NBO is the newcomer in the number five position. Raysut Cement has slipped out of this ranking this year.
Sayyid Amjad Mohamed al Busaidi, chairman of Ooredoo, in his report to the shareholders states that the breakthrough year saw a very strong financial performance, the flawless transition from Nawras to the global brand Ooredoo, and further technological advances transformed the company into a world-class operator.
The revenue for the year was RO226.4mn compared to RO202mn in 2013 an increase of 12.1 per cent. Net profit for 2014 stood at RO37.9mn compared to RO33.1mn in 2013, an increase of 14.5 per cent. The total number of customers grew by 8.6 per cent.
Investment in 2015 will continue to improve the performance and experience of customers. Ooredoo have expanded their fibre network and are providing future proof network country wide and a second-to-none customer experience.
Interestingly, the top five companies that have provided the best return on equity to their shareholders for the year 2014 is exactly the same as 2013.
Chairman of SMN Power Holding, Johan Van Kerrebroeck, in his report to the shareholders for the year ended December 31, 2014 explained that the health and safety performance was excellent with no lost time injuries (LTI) in line with previous years. During the year the company through Barka II and Al Rusayl plants achieved excellent operational performance. Barka II commercial availability for the year was 91.7 per cent (92.4 per cent in 2013) for power and 94.6 per cent (94.1 per cent in 2013) for water. At Rusayl, the power availability was 89.2 per cent (88.6 per cent in 2013). During the year the company undertook a share split by subdividing the one rial Omani nominal value share to ten RO0.100 shares.
He states that the company generated consolidated net profit of RO8.6mn for 2014 compared to RO7.8mn for 2013. With net earnings of 43 baizas per share in 2014, the board was recommending a final dividend of 22 baiza per share. Kerrebroeck adds that all reasonable measures are taken by the management of the company to maintain the excellent plant availability levels in 2015.
Three of the top five earnings per share growth companies are newcomers on this list. Renaissance has moved up two places to the number one position from being number three in 2013. NBO, Al Jazeera and Oman Flour Mills are all new comers in the second, third and fourth places respectively and Ooredoo retains its fifth position same as 2013. Areej Vegetable, Oman Cable and Raysut Cement who were on this list in 2013 have all dropped out.
Chairman of Al Jazeera Steel, Sulaiman Mohammed Shaheen al Rubaie, in his annual report to the shareholders states that during the year there was a continuous fall in steel raw material prices and the fourth quarter was the most negatively impacted. If the drop in oil prices continues, infrastructure projects may be curtailed which may affect steel demand.
Al Rubaie adds that in spite of all these adverse factors, the company was able to achieve a growth of 14 per cent in net profits compared to last year, which is the highest profit ever made by the company. During the year, the company achieved the highest production and dispatch. The company had a turnover of RO324mn compared to RO290mn in 2013, an increase of eight per cent and a profit of RO5.2mn compared to RO4.55mn last year, an increase of 14 per cent. He states that the board was recommending a cash dividend of 22 per cent for the year. Al Rubaie explained that the company was in the process of expanding further their geographical scope in order to compensate the lower demand from the GCC market.
Three of the five companies on this list are new comers. SMN Power Holding, a newcomer, comes straight into the number one spot followed by another newcomer Omantel in the number two position. Areej Vegetables slips to the number three slot after being number one last year. Ooredoo has gone up one to number four from the number five position last year and Oman Oil Company another newcomer comes in the number five position.
Nasser Bin Muhammed Bin Nasser al Hadhramy, chairman of Areej Vegetable Oils, in his report to the shareholders for the year ended December 31, 2014 states that the company has recorded a sales turnover of RO92mn in 2014. He adds that the operating environment has changed significantly in recent years and the region has witnessed an increase in labour and operating costs. The competition in GCC further intensified with the opening of two more factories in Saudi Arabia. The company managed the environmental factors, increasing competition and price fluctuations in international vegetable oil market very well to earn a record net profit after tax of RO2.6mn in 2014.
Al Hadhramy adds that the company follows a prudent dividend policy to enhance shareholder value and returns. Accordingly, the board of directors is pleased to recommend a cash dividend of RO1,610,000, i.e. 350 bzs per share, for 2014. He explains that the company carries out its responsibilities as a good corporate citizen. The company meets all the standards of Ministry of Regional Municipalities and Water Resources for disposal of solid, liquid and gaseous effluents, and continuously works towards further improvements. Areej Vegetable Oils holds the ISO 9001 certificate for quality management, the ISO 14001 certificate for environment management and the ISO 22000 certificate for food safety management. During 2013, the company became one of the first in the region to receive FSSC 22000, the prestigious Swiss Food Safety System Certification recognised by Global Food Safety Initiative (GFSI).
One new company has entered the ranking of the best five dividend yield companies. Omantel jumps to the number one position from being fourth last year. SMN Power, a newcomer, comes straight in at the number two slot, Areej Vegetables maintains its number three position as 2013. Ooredoo has dropped to the number four position after being number one last year and Al Jazeera slips to the number five slot after being number two in 2013. Sembcorp which was number five last year has dropped out of this list.
Noor bin Mohamed bin Abdul Rehman, chairman of Al Maha Petroleum Products, in his annual report to the shareholders for 2014 states that the company had completed 20 years of operations in 2014. Even though oil prices declined in the last quarter, the company continued to progress at a faster pace. Total sales for 2014 were RO370mn – an increase of 16.1 per cent over the last year and the net profit reached RO10.7mn an increase of 3.1 per cent over last year. In line with the consistent dividend policy the board was recommending a cash dividend of 110 per cent compared to 100 per cent last year.
Rehman adds that during the year the company continued to capitalise on the rapidly growing demand for petroleum products by expanding their filling station network and also continuing with the ongoing rebranding programme. He explains that with the objective of making the company shares more attractive, the shareholders had decided to split the rial Omani one nominal value to 10 shares of RO0.100 per share during 2014. Based on the government’s reiteration of continuing the development projects, Rahman is optimistic for sustainable growth in the future. Overall, the OER Top 20 companies continued to strive ahead on almost all parameters, achieving their twin objectives of creating shareholder value and contributing to the growth of the Sultanate.
The rankings for the OER Top 20 and the introductory write-up were done by Mukhtar Hasan who is a fellow of the Institute of Chartered Accountants in England and Wales and holds a Corporate Finance qualification issued jointly by this institute together with the Securities Investment Institute and the Chartered Accountants Institute of Canada. He graduated as a Bachelor of Commerce in 1970 and qualified as a Chartered Accountant in 1974. He is also a member of the Corporate Finance Faculty of the Institute of Chartered Accountants in England & Wales.
Hasan has local and international experience in banking, finance, senior management, private equity, corporate finance and investments. He is the managing partner of Al Barij International, which is a corporate finance firm specialising in corporate turnarounds. He has served on the board of several companies including Omani public companies United Power, Renaissance Services, Renaissance Hospitality, National Hospitality, Muscat Finance and Oman Textiles. He also served as the chairman of the American British Academy, an IB World School in Muscat for a number of years. He is currently chairman of Muscat Thread Mills, managing director of Gulf Mushroom Products Company and vice chairman of Oman Dental College as well as several other local and foreign private companies.
He may be contacted by email at mukhtar@albarij.com
KPMG is a global network of professional firms providing audit, tax and advisory services. KPMG reported in the financial year 2011 revenues of $22.7bn, employs 145,000 people in member firms around the world and operates in 152 countries. In the lower Gulf, comprising Oman and UAE, KPMG employs more than 700 professionals and operates from five offices in Muscat, Dubai, Abu Dhabi, Sharjah and Jebel Ali. KPMG Oman currently has a staff compliment of approximately 100 in audit, tax and financial advisory services, including four partners, five directors and 19 managers. KPMG Oman has been successfully training accountants and auditors in the Sultanate for many years.
DEFINITIONS AND EXPLANATIONS
Revenues: All companies on the list are derived from the published accounts submitted to the Muscat Securities Market (MSM). Therefore, closed joint stock companies and private companies and establishments are excluded from this list. These companies are, in the first instance, ranked by revenues. All the other rankings shown on the table do not consider any other companies that do not make the list on the basis of revenue. In the case of banks and investment sector, the gross interest income as well as other operating income together is considered as their revenue for this purpose. In the case of insurance companies, the Gross Premium Written as well as investment income together is considered as their revenue for this purpose. All figures are for the year ended 31 December 2014 or the end of financial year of the company in year 2014, unless otherwise stated.
Profits: Profits are shown after taxes and all charges including extra-ordinary charges. Figures in brackets indicate a loss. All losses and negative growth are also ranked where possible.
Assets: Assets shown are as per the balance sheet at the end of the year. It is the total of fixed as well as the current assets.
Shareholders’ equity: Shareholders’ equity is the paid up capital of the company, retained earnings, and statutory and all other reserves as well as share premium.
Market cap: Market capitalisation figure has been arrived at by multiplying the total number of outstanding shares of the company by the price per share as of close of business on 31st March 2015 or as the last trading of stock of the company.
Earnings per share: The earnings per share are as declared by the company in its published financial statements.
Dividend yield: The dividend yield figure is calculated on the basis of dividend declared in the financial statements for 2014 against the share price at close of business on 31 December 2014 or as per the end of financial year of the company.
Price earnings ratio: This ratio has been calculated by dividing the price per share by the earnings per share as at 31 Dec 2014.
NOTES:
The following institutions have declared bonus shares dividend for the year 2014, which has not been taken into account in the calculation of dividend yield.
Bank Muscat
(Mandatory – convertible bonds) 15.00%
Bank Muscat (bonus shares) 05.00%
Galfar Engineering (bonus shares) 10.00%
National Bank of Oman (bonus shares) 10.00%
Bank Dhofar (bonus shares) 15.00%
National Gas (bonus shares) 09.74%
OMINVEST (bonus shares) 10.00%
The financial statements of Oman Flour Mills Company are as at 30 June 2014, which is their financial year-end.
The following companies are having share price/par value of share @ OMR:1/- each;
Areej Vegetable Oil & Derivative Company
BANK MUSCAT
“With the best and most knowledgeable team in the country, Bank Muscat remains committed to providing a world-class banking experience.”
Dr AbdulRazak Ali Issa
Chief Executive, Bank Muscat

Leader par excellence

Healthy performance of all its key business lines in 2014 brings Bank Muscat on top notch position
Bank Muscat is the undisputed leader of Oman’s banking and finance industry, with assets worth over $22bn, accounting for 37 per cent market share of assets in the sector. The bank enjoys investment grade credit ratings and is rated ‘A1’ by Moody’s and ‘A-‘ by Standard & Poor’s. The bank’s biggest footprint and presence across the Sultanate and world class products and services are helping to make the vital differentiation.
All the key business lines of the bank recorded healthy performance during the year 2014. The bank has an extensive network of 148 branches in Oman, as well as direct and indirect presence in all six GCC states, including a branch each in Saudi Arabia and Kuwait, as well as representative offices in UAE and Singapore which focus on financial institutions and trade business.
Milestones

• Announced RO8mn as prize money for al Mazyona Savings Scheme
• The largest e-channel network in Oman
• 622 ATM/CDMs and 11,326 point of sales (PoS) machines
• Among 20 global banks chosen as official Retail Bank of 2014 FIFA World Cup
• Introduced award-winning mBanking to widen the network to over 235,000 tech-savvy customers
• Joined hands with American International Group (AIG) for a 10-year strategic bancassurance agreement
• Teamed up with LuLu Hypermarket to launch the first retail co-branded card in Oman

Looking ahead
The perceived challenges to Oman’s economy mainly relate to fluctuating oil prices. Since domestic economic growth and oil prices tend to move together, declining oil prices can result in both external and fiscal account deficit. The government’s fiscal prudence over the years, however, has helped in building up reserves to sustain growth in the near-term.
2. Oman Telecommunications Company
“We will continue to build on our brand, and emphasize on providing enhanced customer experience as well as bringing innovative and affordable services to our valued customers.”
Talal Said Al Mamari
CEO, Omantel

On solid footing

Omantel continues to bolster and sustain its position as the Sultanate’s flagship telecom operator despite immense competitive pressures
Omantel maintained its position as the leading fixed and mobile communications services provider of Oman. Responding to the global shift in communication patterns, Omantel Group has been successful in cascading benefits of this global digital revolution down to its customers in Oman by offering best-in- class technologies and services.
The company remains a leading force in both fixed and mobile segments, driven by its attractive pricing, innovative service offering, and high-quality network of the largest footprint in Oman. Alongside the stiffening domestic competition as well as competition from the global OTT players, the Group revenue posted a year-on-year growth of four per cent to RO481mn from RO463mn in FY 2013. Omantel’s consolidated customer base stood at 4.296mn, representing a year-on-year growth of 6.8 per cent. Continued improvements in its network and customer service have also yielded a high degree of loyalty among its customers.
Milestones
Government disinvested 19 per cent of its share in Omantel, diluting its share to 51 per cent from 70 per cent
Assigned ‘BBB’ and ‘A3’ ratings by Standard & Poor’s and Moody’s respectively
Bagged ‘Asian Business Leaders Forum’ award for the best business practices
Stepped up efforts towards revising investment in World call Telecom Limited
Established Oman France SAS, a 100 per cent owned subsidiary for maintaining and landing the Asia Africa Europe – 1 (AAE-1) submarine cable in France
Looking ahead
The company will embark on its new corporate strategy ‘Omantel-3.0’, pursuing operational excellence, innovation and transformation of Omantel into a digital powerhouse of the country. It will also continue to focus on creating sources of income and diversifying the investment portfolio directed to achieving sustainable growth in revenues.
3. GALFAR ENGINEERING AND CONTRACTING
“Our goal is to be seen as the most preferred employer in the construction sector. Among the construction companies in the private sector in the Sultanate, Galfar has the largest number of Omani personnel.”
Dr Hans Erlings
CEO, Galfar Engineering and Contracting

A seasoned player

Galfar maintains its position as one of the leading contracting companies in the Sultanate
Galfar Engineering and Contracting is carrying out works worth around $1bn per year. The company has five subsidiaries and three associates in operations. Resource mobilisation capabilities continue to be Galfar’s major strength. The equipment spread available within the company remains unparalleled in the local market. Each year the fleet is brought up-to-date for executing the actual workload.
The company is committed to the Omanisation agenda through planned employment opportunities and employee development through quality training. The company aims to accomplish employee development through transparent and harmonious HR policies, and maintain a motivating work environment and retain talent.
Milestone
Completed the MC5 Runway works of Salalah Airport
Placed as an approved subcontractor in AVME list of PDO for fabrication of Pig Launchers and Receivers
Worked 87 million man hours and driven 106 million kilometres collectively during the year
Networked with a large number of SMEs in the construction sector and significantly contributed to In-Country Value generation.
The new manual of authority was rolled out to put in place adequate internal control systems and monitoring processes
Conducted companywide campaigns for promoting HSE compliance and stopping unsafe work
Supported several campaigns in spreading social awareness on road safety
Looking ahead
Outlook for the construction industry in Oman appears good and business environment for construction companies appears positive and supportive. Galfar expects that the oil price will recover to some extent in the second half of the year and activities in the oil and gas Sector may continue at a high level. Several road projects are seen to be in the pipeline of which the company stands a good chance to win some of them during the year 2015. Market for civil works presents a significant opportunity and Galfar expects to have a good share in this area also.
4. AL MAHA PETROLEUM PRODUCTS MARKETING COMPANY
“The fall in the oil prices has resulted in a challenging environment for the Company. However, the growth in sales volumes are expected to continue, given the rising domestic demand for petroleum products and projected improvements in several sectors of the economy.”
A Ahmed Bakhit Al-Shanfari
General Manager, Al Maha Petroleum Products Marketing Company

Fuelling growth

Supported by strong domestic demand, Al Maha Petroleum delivered remarkable performance across all business segments
The year 2014 saw Al Maha Petroleum progress at a faster pace. Retail sales continued to play a pivotal role for the company during the year, accounting for a major share of total sales volumes. Retail sales grew by three per cent in 2014 when compared with 2013 due to the domestic demand growth. The commercial sales recorded an exceptional performance with a growth of 20 per cent, on account of new contracts won during the year. Increase in PDOs’ activity in the interiors of Oman has further propelled the growth of commercial sales. Aviation sales registered a growth of 53 per cent in 2014 mainly on account of the new contracts obtained during the year. The fuel sales to commercial airlines at Muscat International Airport have also increased in 2014 due to the increased commercial activity. The lubricants sales also registered a growth of 14 per cent, mainly on account of increased demand for Al Maha branded lubricants.
Milestone
Expanded filling stations network by opening six brand new filling stations
in 2014
The commercial sales segment delivered strong sales performance
Aviation sales segment recorded significant growth
Issued and paid-up shares increased from 6.9 million to 69 million
Al Maha’s market share in 2014 increased to approximately 34 per cent
59 stations were rebranded as at the end of 2014
Looking ahead
Despite the decline of oil prices, the government has already reiterated that development projects would continue and ensured that steps were being taken to mitigate the negative effects of the oil price slump. Al Maha looks for an optimistic year ahead for sustainable growth in its business.

“The business will have to respond to the challenges of regional shifts in fuel demand and a highly competitive environment.”
Adil Ismail Al Raisi MD,
Shell Oman Marketing Company

Long term strategy

In 2014, Shell Oman marketing Company invested in its retail network and strengthened its footprint across the country
Shell Oman Marketing Company continued to grow in the retail and commercial fleet business mainly driven by investment in new sites, operational excellence, on-time product delivery and attracting additional commercial fleet card accounts. The retail business delivered steady growth of 5.3 per cent in volumes year-on-year, remaining the leading value driver for the company. The significant investment in new retail sites, organic growth of exiting sites, operational excellence and marketing initiatives were the main drivers for retail growth. In addition, the commercial fleet segment grew its customer base. Total lubricant volumes (export plus domestic) were at the same level as 2013 whereas bitumen volumes reduced as several projects came to an end in 2014. The company continued with its long term growth strategy of investing in its retail network and strengthening its footprint across the country. Significant investment was made during the year with seven new service stations being opened bringing the number of service stations to 166 with many further new build and site improvement projects in progress for early 2015 delivery.
Milestones
Shell fuel cards IT infrastructure was upgraded at all the retail sites
Remains the sole operator at Salalah airport
Won a five-year extension tender contract for PDO remote airfields
Appointed a second distributor in the business to consumer segment
Launched next generation motor oil “Shell Helix Ultra” with Shell PurePlus Technology
The new base-oil storage facility at Sohar Port created significant cost reductions and HSSE benefits
Looking ahead
The company will continue to focus on increasing the premium product penetration with both the B2B and B2C segments by investing more in sales promotions and advertising as well as introducing some products that will fulfill customers’ requirements.
6. OMAN OIL MARKETING COMPANY
“As the backbone of the company’s operations, retail will continue to propel our growth. Our strategy is to increase our presence throughout the Sultanate with strategically-located sites to serve the rising population and subsequent energy consumption.”
Omar Ahmed Salim Qatan
CEO, Oman Oil Marketing Company

Yielding good returns

Oman Oil Marketing Company continued to grow its business and recorded strong performance in 2014, despite stiff competition
In 2014, the year that marked its tenth anniversary, Oman Oil Marketing Company (OOMCO) attained the best financial performance, with the total sales value going up to RO357mn, an increase of 27 per cent compared to RO296mn in 2013. The retail business division performed remarkably well with 10 per cent growth in sales values, and the number of stations nationwide also increased to 166 from 152 stations in 2013. The expansion programme to increase the market share and presence will continue on selective premium sites and locations that yield maximum returns.
The ahlain convenience shops have grown in prominence with 97 outlets in operations, and plans are afoot to further increase its services and offerings. The commercial sales value grew by 31 per cent in 2014, while the performance of lubricant business enhanced with the introduction of Oman Oil lubricant in the local market during the last quarter of 2013. The aviation business unit of OOMCO is the single largest jet fuel supplier at Muscat International Airport. With the continued expansion of Oman Air fleet as well as the increase in international airlines to Muscat International Airport, the aviation fuel demand has continued with its upward trend. The marine business unit is focused in widening the customer base to include other ports such as Salalah and Muscat.
Milestones
Acquired 40 per cent stake in Lubchem International Industry
Acquired 22 years of No Loss Time Injury at the terminal operation at Mina Al Fahal
Highest Omanisation in the industry at 85 per cent
More than 25 regular aviation clients; and refuels over 20,000 aircrafts per year
Moe than 10 Castrol Auto Service (CAS) outlets across Oman
Re-launched the toll-free customer care number under the slogan ‘We Care’
Looking ahead
OOMCO is very optimistic about 2015. The plans announced by the government as well as the country’s focus on infrastructure spending will drive Oman to even greater heights as well as ensure that the demand of fuel is sustained, specifically diesel in the commercial market.
7. OMAN CABLES INDUSTRY
“Oman Cables Industry works carefully to monitor the developments in potential countries for future business and strives to find the balance between the business opportunities and the potential risks involved and cautiously build market confidence.”
Gert Hoefman
CEO, Oman Cables Industries

Operational excellence

Oman Cables Industry had a successful year in 2014, despite the challenges coming from intensified competition and volatile commodity markets, particularly metal prices
Oman Cables Industry has developed a sustainable customer base within the various market sectors to ensure a constant geographical spread of its products. The company has a comprehensive distribution network throughout the GCC which enables its consumers to obtain Oman Cables products anywhere in the region. The company managed to obtain a viable market share at all main utilities within the region. This is the result of investing and utilizing the latest technological equipment and materials with no comprise to quality. This is obviously followed by extreme testing and quality control of its products.
Oman Aluminum Industries (OAPIL), based in Sohar, a joint venture between Oman Cables Industry and Takamul Investment Company performed well and has made a positive contribution to the company’s overall results. The company has demonstrated its capabilities in dealing with large international engineering, procurement and construction (EPC) corporations and has succeeded in establishing long term arrangements. Despite volatilities in metal prices and low oil prices, Oman Cables is poised to manage its operations and customer demands accordingly.
Milestones
The year 2014 was one of the best performing years in terms of profitability
Increased the capacity for wires and cables and special projects initiatives
Introduced the latest technological systems and upgraded machinery
Ranked as the number two cable company in the GCC by Integer
Introduced and implemented the Integrated Management System (IMS)
Looking ahead
The company expects to maintain its presence in the market and to benefit from the continuous expenditure on infrastructural projects in the GCC combined with Oman Cables’ competitive cost structure, expansion plans, sound financial position and a reliable customer base.
8. RENAISSANCE SERVICES
“Our long-term strategies are right and the businesses are on a very sound footing to grow and prosper.”
Stephen Thomas
CEO, Renaissance Services

Resurgent

The financial performance of Renaissance Services reflects growth in the operating businesses and positive reduction and containment of one-off impacts which impacted growth in 2013
Renaissance Services comprises two independent, internationally competitive businesses: Topaz, a leading off-shore support vessel (OSV) company with a diversified and versatile fleet of 98 vessels, offering a wide range of services required by the Oil and Gas sector across the world; and Renaissance which offers a range of tailored facilities and service solutions for large projects and operations around the world.
While nurturing and growing existing key markets in the Caspian and the Arabian Gulf, Topaz strategy is focused on maximising the company’s position in West Africa; globalising through M&A when the right opportunities arise; adding select offshore services to further improve its service offering to customers; and improving execution. This approach is mirrored in the Renaissance strategy to broaden its service offering in pure contract services, world-class accommodation solutions and integrated facilities management (IFM). The company is increasing resources deployed on diversifying its geographical footprint. Oman remains a superb, and growing market opportunity for the business to flourish and build on its market leadership position.
Milestones
Made a capital investment of RO112.6mn in new assets for future growth in 2014
Standard Chartered Private Equity acquired 9.8 per cent stake in Topaz for an investment of $75mn
Topaz crossed the milestone of achieving EBITDA RO200mn
Topaz spends $100-200mn per year on new vessels and other capital investments
In 2014, Topaz divested three older vessels and acquired five more
Renaissance finalised the Duqm Equity Partnership that brings together investors from the local community with Omani Pension and Sovereign Wealth funds
Renaissance won 85 per cent of the Oman Ministry of Health Patient Catering, Cleaning and Laundry service contracts in 34 hospitals
Looking ahead
The first half of 2015 will be very tough as the oil price crisis brings temporary pressure on the company’s margins. But the company is patient in delivering its business and alert for the new opportunities that 2015 – and the future – will bring.
9. OMANI QATARI TELECOMMUNICATIONS COMPANY
“Under both the Nawras and Ooredoo brands during 2014, we have provided our customers with some exciting and targeted new offers and these have contributed to our solid growth.”
Greg Young
CEO, Omani Qatari Telecommunications Company

Global brand value

Rebranded as Ooredoo in 2014, Omani Qatari Telecom Company’s growth was driven by increases in both mobile and fixed data revenue as well as international voice revenue
The year 2014 was a breakthrough year for Omani Qatari Telecom Company, marking the transition from Nawras to Ooredoo, a dynamic global brand with a presence in 14 countries and 95 million customers. The company also achieved – for the first time in its history– the best-ever, consistent financial performance across all four quarters, and double-digit revenue growth. The company also successfully completed the second year of an ambitious roll-out programme to upgrade its network, covering many of the country’s regions in the process. It also continued to capture significant market share.
Ooredoo witnessed growth across all its key segments, in particular its high value segment, which grew substantially and had a significant impact on usage and revenues. It has launched market-leading, innovative products and services, including the Business Shahry Integrated Mobile Packs, which incorporate all aspects of communication that a business person requires.
Milestones
Total number of customers grew by 8.6 per cent from 2,396,826 to 2,601,704
Mobile post-paid customer base grew by 4.9 per cent to 196,142
Mobile pre-paid customer base increased by 9.4 per cent to 2,347,908
Set up a number of committees or forums, and empowered them with decision making rights to develop strategies and plans
Established a dedicated Business Enterprise (‘B2B’) unit, under separate leadership
Further modernised its network and refreshed the portfolio of products and services
Maintained the company’s Omanisation ratio at 90 per cent
Looking ahead
There will be an emphasis on consolidating and growing market share, launching market-leading products and services, and enhancing international alliances with better interconnect agreements. The company expects to deliver new digital services to drive further demand for data and usage, rather than just relying on third parties, and to bring together high-speed fixed broadband services in bundles, with mobile broadband and others.
10. NATIONAL BANK OF OMAN
“We continuously explore new avenues to deliver customer service excellence; support Oman’s diversification strategy; drive thought leadership; inspire Oman’s youth; develop and promote local talent; and make a positive and sustainable difference in our community.”
Ahmed Al Musalmi
CEO, National Bank of Oman

Aiming high

National Bank of Oman is strongly positioned for continued growth, with the retail and corporate businesses being the core contributors to the bank’s revenues
The year 2014 was a milestone year for National Bank of Oman (NBO) for two reasons. The bank recorded its strongest ever net profit, crossing RO50mn for the first time, while net loans, advances and financing activities were up 12 per cent, and operating income by 10 per cent. Muzn Islamic Window, overseas branches in the UAE and the wholesale banking business have recorded strong and impressive results. The bank also issued a highly successful five-year $500mn bond under the Euro Medium-Term Note (EMTN) programme.
And of greater strategic importance, 2014 was the year when NBO began a transformational journey to establish itself as the bank of choice. This included the launch of a series of initiatives designed to improve its revenues, range of products, operational efficiency and service delivery.
Milestones
Signed a Memorandum of Understanding with the Special Economic Zone at Duqm to provide financial support to potential investors
Provided $116.24mn financing for Dalma Energy’s Petroleum Development Oman project in 2015
Launched the Point of Sale (PoS) acquiring business that has been positively received by corporate and SME clients
Established a new business group namely SME banking
Invested quite substantially in people, technology and processes
Revamped Small Business Unit in a bid to provide new stimulus to the SME sector
The bank’s asset management business grew its GCC equity fund to be the largest equity fund in Oman
Received the MENA FM ‘Oman Asset Manager of the Year’ award for the third year running
Provided financial and non-financial solutions to over 15,000 new SMEs
Looking ahead
In 2014, NBO put in place a very clear five-year growth strategy to make itself the bank of choice for both individual and business customers. 2015 will be the year when many of these initiatives fully come on stream and begin delivering results.
11. Bankdhofar
“BankDhofar has a clear strategic path which helped us navigate over the years and this is evident in our performance.”
Abdul Hakeem Omar Al-Ojaili
Acting CEO, BankDhofar

From strength to strength

Bank Dhofar grew prudently driven by strong fundamentals, in terms of both sustainable credit growth and deposits mobilisation in the year 2014
Bank Dhofar continued to grow in all key areas in the year 2014 and crossed RO3bn in total assets and RO2bn in net loans, advances and financing to customers. The net Loans, advances and financing to customers reached RO2.25bn at December 2014, showing a growth of 18.42 per cent from RO1.90bn at the end of December 2013. The customer deposits mobilised by the bank achieved a growth of 22.17 per cent from RO2.03bn at the end of 2013 to reach RO2.48bn at the end of 2014. Maisarah, the Islamic banking window, achieved outstanding results during 2014 in its second year of operations, earning a total profit income of RO4.13mn.
The on-going five-year strategy of the bank ‘The BIG Plan’ that commenced in 2012 predominantly focuses on improving the customer experience. The benchmarking and mystery shopping surveys have provided an insight into understanding customer needs, behavioural drivers, and profitability. The multi-channels strategies, such as internet banking, mobile banking, 24/7 call centre, ATM Self Service have shown a positive shift in customers’ banking preferences, enabling the branch staff to focus on more complex services, while opening door for future cross-sell and up-sell opportunities.
Milestone
Participated in the commercial facility tranche to the extent of $100mn for Oman Refinery Petrochemicals
Raised capital in the form of Tier-2 Subordinated Loan of $75mn
To raise capital of RO115.5mn in the form of Tier 1 in 2015 (subject to regulatory approval)
Increased the paid-up capital of “Maisarah” Islamic Banking Services from RO12.5mn to RO25mn
Added 14 ATMs and five CDMs, taking the total to 146 ATMs and 48 CDMs
Launched the Student Credit Cards to colleges and universities students
Won several regional and international awards
Looking ahead
Moving into the fourth year of its’ challenging five-year plan, the bank will continue to emerge strongly within the local financial market. It has carefully planned the launch of a series of attractive products, services and other initiatives. The bank is strategically well placed to achieve robust growth in 2015 and in the coming years to support the strong economic development of the Sultanate.
12. NATIONAL GAS COMPANY
“The company is well positioned to unleash its full potential across its principal market. The management remains fully committed to its vision of making NGC a significant multinational player.”
Nalin Chandna
Group Finance Controller and Acting CEO National Gas Company

Against the grain

National Gas Company consolidated its operations in UAE, KSA and Malaysia in 2014
National Gas Company (NGC) performed well in all its key markets of Oman, UAE, KSA and Malaysia, during the year 2014. NGC was also successful in getting all approvals for its new subsidiaries in KSA and in Umm Al Quwain, UAE. These entities are expected to contribute significantly to the group operations in 2015 and beyond. The group has LPG sales exceeding 35,000 MT across geographies.
The decline in the group revenue is largely reflective of the declining Saudi Aramco gas contract prices especially in the latter part of 2014, in markets like UAE and Malaysia where revenues are recorded at international prevailing market prices. In Oman , the rising product supply costs as well as operational expenses have rendered the cylinder business unviable with the business seeing no respite with respect to change in cylinder selling prices. The company’s business outside Oman contributed positively through growth in bulk LPG market in UAE and Synthetic Natural Gas projects in Saudi Arabia.
Milestones
Renewed the sourcing contract for LPG supplies in UAE market for another two years
Completed mechanical works of its first LPG storage and distribution facility in UAE
Came out with a rights issue in Oman in 2014
Launched carousel filling system and telescopic conveyor system for cylinder lauding and unloading
Ensured ‘zero incidents,’ in compliance with Integrated Management Systems’ quality, safety and environment certifications: ISO 9001, ISO 14001, and OSHAS 18001
Looking ahead
NGC has emerged ever stronger after a challenging 2014 and is fully geared up to continue raising the bar on operational excellence and financial performance. The company is also evaluating various initiatives to bring in a healthy balance and diversification to its product portfolio.
13. AL JAZEERA STEEL PRODUCTS COMPANY
“We expect to produce and sell additional 4,000-5,000 MT of rebar products on a monthly basis. This excess production will lead to 60 per cent capacity utilisation from the present level of 40 per cent.”
Dr Bhaskar Dutta
CEO, Al Jazeera Steel Products Company

Capitalising on positive trends

Al Jazeera Steel was able to achieve significant growth in its sales as well as net profits in 2014
Al Jazeera Steel has witnessed robust sales, driven by its capacity expansion and wider reach. In 2014, the company achieved the highest production and dispatch for both Tube Mill and Merchant Bar Mill. This was possible mainly due to the well planned sales and availability of raw materials. The drop in Iron ore and oil prices started in a noticeable way by the third quarter. The management was able to capitalise the positive trends and was able to achieve the improved results.
The company was able to achieve significant growth in its sales as well as net profits in 2014, compared to 2013. Production and sales’ tonnages were also higher by 12 per cent in 2014, compared to 2013. The drop in Iron ore and oil prices started in a noticeable way by the third quarter. Even though there is an increase in the sales quantity by 12 per cent, revenues have increased only by 8 per cent mainly due to the progressive reduction in raw material costs.
Milestones
Controlled production levels for the Tube Mill products to balance the demand from US market
Maintained an average monthly sale of 26,200T in 2014
Sales value increased from RO88.4mn to RO95.3mn
Achieved capacity utilisation percentage of 68
Tube Mill division produced and sold 204,826 MT in 2014
MBM division sold 119,646 MT of products
Looking ahead
The year 2015 will be a challenging year with oil prices hovering around $50, with predictions of further drop in prices by the end of first quarter of 2015. The reduction in Iron Ore price as well as oil prices will help the construction to be executed at affordable prices, since steel is a major component in the construction cost.
14. RAYSUT CEMENT COMPANY
“In view of severe competitions in the UAE, North of Oman and export markets, the company’s drives have been to optimise volume and price to derive the highest revenue and profitability.”
Eng Salem Alawi Mohammed Baabood
Group CEO, Raysut Cement Company

Against the tide

Although the year 2014 remained challenging, Raysut Cement Group optimised its sales in varied markets and retained profitability
The year 2014 saw unabated supply of cement from UAE cause dent on price and volume sales in the Northern markets of Oman. However Raysut Cement Group did well during the year by optimising volume sales to reap maximum advantages. The group as a whole sold 3.814 million tonnes of cement and clinker, an increase of 0.9 per cent. While group sale of clinker decreased to 0.036 million tonnes, the sale of cement increased to 3.778 million tonnes, an increase of 1.3 per cent. In spite of competition in the north of Oman as well as in export markets, the parent company could sell 2.431 million tonnes of cement and 0.036 million tonnes of clinker against 2.451 million tonnes of cement and 0.053 million tonnes of clinker in the previous year. The subsidiary company Pioneer had to face severe competitions in the domestic market and still could sell 1.390 million tonnes of cement during the year against 1.342 million tonnes of cement in 2013.
Milestones
Imported on-shore wheel loader enabling simple non-pneumatic vessel to carry cement to North at a cheaper rate
Reserve and surplus increased during the year by 12.9 per cent to RO108.6mn
Prepaid RO9.5mn beyond the installment payment of RO4mn during the year
Managed the cash flow effectively and parked the available funds beyond immediate requirements, in call and time deposits
RO15mn parked as time deposits by parent company; RO6.31mn by subsidiary Pioneer
Committed RO.034mn for various social causes during the year
Looking ahead
Oman is marching ahead with big ticket investments for industrial developments both in oil and non-oil sectors even though the high pressure on oil prices has its adverse impacts. Major investments in infrastructure in the five-year plan ending on 2015, would provide significant impetus.
15. AREEJ VEGETABLE OILS & DERIVATIVES
“The company’s product development efforts are geared towards products tailored to cater to the different segments of the market.”
Prem Maker
Executive Director & General Manager, Areej Vegetable Oils & Derivatives

Stable growth

Despite an extremely competitive market environment, Areej Vegetable Oils and Derivatives maintained robust but modest growth in its sales volumes in 2014
Areej Vegetable Oils and Derivatives maintained its growth in sales volumes in 2014, despite unsettled conditions in some of its export markets. The company operates in an extremely competitive market environment as there are 12 other manufacturers in the GCC with duty free access into Oman. The competition in the GCC further intensified with the opening of two more factories in Saudi Arabia.
The company operates in an industry characterised by high raw material content. Its products are also subject to price regulation in Oman and some export markets as an essential food item. The international prices of vegetable oils are volatile, and the company’s ability to pass on cost changes to its customers can significantly impact its profitability. The company’s management takes steps to actively monitor and manage these price fluctuations and manage sales prices.
Milestone
Earned a record net profit after tax of over RO2.6mn in 2014
Holds the ISO 9001, ISO 14001, ISO 17025 respectively for quality management, environment management and quality control l laboratory
One of the first companies in the region to receive the FSSC 22000, the Swiss Food Safety System Certification
Omanisation went up to 55 per cent
Introduced training programmes for Omanis at all levels and sponsored Omanis for professional courses
Looking ahead
The company’s production facilities and its product range allow the company to improve its coverage of current and new market segments and market niches. Barring unforeseen circumstances, the management hopes that the company will improve its performance in 2015.
16. OMINVEST
“Ominvest is exploring opportunities to increase and diversify its portfolio of investments within and outside the Sultanate with an objective of growth in sustainable earnings and to mitigate volatility in its portfolio of investments.”
Abdulaziz Al Balushi
CEO, Ominvest

Strategic initiatives

Oman International Development and Investment Company went through significant transformation during 2014. A number of major operational, investment and strategic initiatives were taken to further strengthen the company’s position as one of the premier investment companies in Oman
Oman International Development and Investment Company (Ominvest) has continued to uphold its long standing track record of consistent profitability and healthy dividend payments to its shareholders. In 2014, the company took a number of operational, investment and strategic initiatives to further strengthen the its position as one of the premier investment companies in Oman.
There are 3 SAOG companies in which the Group and the parent company have shareholding between 20 per cent and 50 per cent of the voting rights. The banking subsidiary, Oman Arab Bank, is the largest investment of the parent company. The other subsidiaries include Oman Investment Services, Salalah Resorts, Al Jabal Al Aswad Investment and Budva Beach Properties. Budva Beach Properties and Salalah Resorts were established to focus on property development, while Salalah Resort is an integrated tourism complex project. Associates generally performed well and contributed positively. The share of profits from associates recognised in the Group’s statement of comprehensive income amounted to RO1.69mn for 2014.
Milestones
Signed MoU with ONIC Holdings to explore the viability of a merger between the two companies
Organisation was further strengthened with appointment of senior management in key thrust areas
The investment philosophy, policy and strategy framework was reviewed and revised.
Well positioned to generate healthy investment returns over the medium to long term
Looking ahead
Ominvest’s current investment strategy focuses on the following major areas-strategic investments, public and private equity investments and real estate investments.
17. Oman Flour Mills Company
“Flour sales have increased in the local market over the previous year. New export markets are being considered as traditional markets have become saturated.”
Ali Habaj
CEO, Oman Flour Mills Company

Expanding its horizons

Oman Flour Mills company’s future diversification plans include setting up a new 500 MT flour mill in Sohar. New export markets are being considered as traditional markets have become saturated.
Oman Flour Mills Company, which aims to be a leading food manufacturer in the Sultanate, through its subsidiaries and associates, has expanded its activities into poultry and bakery products.
The company markets its flour products under the brand name ‘DAHABI’ meaning Gold. More than 20 varieties of flour and allied products are produced under this brand name. Total flour sales increased by 4.5 per cent in the year ended June 30, 2014 and the mill is currently operating at its full capacity. The company also produces more than 20 different animal feeds under the brand name ‘BARAKAT’.
The company, which was established in 1977 as a joint stock company with a modest wheat milling capacity of 150 tonnes per day, has increased through expansions to the current 800 tonnes per day. The company will continue to strengthen and develop the core businesses of flour and feed respectively. The subsidiaries of the company include Modern Poultry Farms and Atyab Investment
Milestones
Maintained its market share in the local market
Net profit before tax of Modern Poultry Farms is marginally higher than 2013
Sohar Poultry Company has become profitable
Looking Ahead
The company’s future diversification plan include setting up a new 500 MT flour mill in Sohar. Modern Poultry Farms, a subsidiary of the company is expanding its capacity by about 50 per cent. Sohar Poultry Company in which Atyab Iffco Poultry holds about 94 per cent of capital, has become profitable and plans are on the anvil to expand the operations in a new location, which is suitable for poultry business. Atyab Bakery is expected to make cash profit from the third year of its operations.
18. SMN POWER HOLDING
“The business model of both the project companies held by SMN Power Holding Company (SMN Barka and Al Rusail) is based on a strong contractual framework with solid and reliable partners. Back-toback contracts significantly reduce the risks over a long-term period.”
John Van Kerrebroeck
Chairman, SMN Power Holding

Powering ahead

SMN Power Holding dispatched an aggregated net power volume of 4,913 GWh and a total volume of 42,679,362 m3 of potable water during the year 2014
SMN Power Holding through Barka II and Al Rusail plants achieved excellent operational performance, with both plants demonstrating high level of power and water commercial availability during the year 2014.
The company over the year 2014 dispatched an aggregated net power volume of 4,913 GWh and a total volume of 42,679,362 m3 of potable water. The increase in power volume is linked to higher dispatch at Barka II compared to the previous year. However, there is no impact on the gross profit of the company since financial performance is primarily linked to availability. Barka II commercial availability for the year was 91.7 per cent for power and 94.6 per cent for water. At Al Rusail, the power commercial availability during 2014 was 89.2 per cent.
Milestones
The Health and Safety (H & S) performance was excellent with no Lost Time Accident (LTA) in 2014
Internal control system has been further reinforced by enhancing the organisation and further implementing policies
Omanisation is a principle the company embraced and is implementing since its inception.
Looking ahead
The management of the company remains confident in 2015, thanks to the robustness of the power sector in the Sultanate, the increasing performance of the plants over the past two-years and the business model of the company based on back-to-back long-term contracts.
The remediation plan has been fine-tuned early 2014 and implementation has already started and is expected to be completed by 2016.
19. AL HASSAN ENGINEERING
“The industry has become quite dynamic and currently faces new challenges in recruiting and retaining the right talent.”
Steve Scott
CEO, Al Hassan Engineering

Exponential growth

Al Hassan Engineering Company’s markets in Oman and UAE continue to be attractive to new entrants and it continues to take prudent and proactive measures to be future-ready
Al Hassan Engineering Company (AHEC) has turned in an impressive performance in 2014 and is currently engaged in the execution of a number of prestigious projects, which are at various stages of completion.
AHEC has transformed its HR function by focusing on modern management practices that create a conducive environment to administer ‘change’ through various policies, programmes and procedures. The employee strength rose to 5900 during 2014 in parent and subsidiary companies. Besides ongoing activities such as the completion of HRMS, development of new job descriptions, rightsizing, compensation management, performance appraisals and training and development, a number of significant initiatives have been taken such as revisiting the company’s mission, vision and values and emphasising on establishing a culture of merit.
The company’s new projects in Oman include the EPC contract for Rabab Harweel Power plant and HRSG project from PDO; construction for Ghaba North Redevelopment Project from PDO; site construction and pre-commissioning of civil and underground piping works for the Sohar Refinery Improvement Project from Daelim Petrofac Joint Venture .
Milestones
The company’s quality, health, safety and environmental management systems are all certified to the latest edition of international standards such as ISO 9001:2008.
In 2014, AHEC achieved 13.12 million LTI Free man-hours and drove 12.54 LTI Free Kilometers cumulatively from all the projects.
Milestone achievements in various projects were accomplished reinforcing AHEC’s commitment towards HSE.
Looking Ahead
The company’s bidding scope and revenue is unlikely to get affected in the immediate future years. The business on hand is good and there are projects in advanced stages of bid which are expected to continue.
20. Oman Refreshment Company
“Through its subsidiary ‘Al Rawdah Integrated Trade and Investment Enterprises’, Oman Refreshment Company is constantly exploring suitable new business growth opportunities.”
Youssef Ezzikhe
GM, Oman Refreshment Company

Consumer Centric

Oman Refreshment Company’s overall revenue increased on account of the company’s efforts to improve sales volumes and sales realisation through innovative and intensive marketing efforts
Oman Refreshment Company (ORC) as a part of improving business productivity and operational efficiencies will continue to invest suitably in operational facilities to meet the diversified consumer preferences, business systems and replace aging assets.
The company, which is aware of the intense competition in a highly price sensitive local market will remain focused to profitably maintain its market share. The overall revenue increased by 5.60 per cent on account of the company’s efforts to improve sales volumes and sales realisation through innovative and intensive marketing efforts. This together with the successes achieved in sourcing key input materials at competitive prices compared to previous year as well as the efficiencies resulting out of various cost control and costs optimisation measures has contributed to overall growth in the top line as well as sustaining certain level of bottom line.
Milestones
Continued on its successful performance journey in 2014 with the help of innovative and intensified marketing strategies
Selective investment strategy to improve operational efficiencies across the organisation, together with the successes achieved in sourcing key input materials at competitive prices compared to the previous year, helped in achieving good net profit during 2014
Delivered good operational performance in 2014
Looking ahead
As part of improving business productivity and operational efficiencies, the company will continue to invest suitably in operational facilities to meet the diversified consumer preferences, business systems and replacing aging assets. The company is optimistic about the future prospects with the product expansion and diversification plans and continued focus on achieving improved production efficiencies. However, the volatile prices of key input raw materials, packing materials, unstable job market and rising wage bill and stagnant consumer prices may impact profitability of the company in the near future. The company is closely monitoring the raw material prices and endeavours to minimise their adverse impact through forward purchase commitments.