Oman International Development and Investments Company SAOG (Ominvest) reported a strong set of results for the financial year ended December 31, 2018. Total group revenues rose by 17 per cent to RO 277.53m and the net profit attributable to Ominvest’s shareholders grew by 47 per cent to RO 30.52m from RO 20.83m in 2017.
In view of the company’s strong growth and robust profitability, Ominvest Board has recommended a 25 per cent dividend (20 per cent cash dividend and 5 per cent stock dividend) for the shareholders’ approval at the company’s AGM scheduled for March 26, 2019.
Abdulaziz al Balushi (pictured), Group CEO of Ominvest, attributed the group’s strong performance to its major subsidiaries including, Oman Arab Bank (OAB), National Life & General Insurance Company (NLGIC), Oman Real Estate Investment and Services Corporation (ORIS), Jabreen Capital, and, to its key associates including, National Finance Company. In view of the sizeable increase in Ominvest’s strategic investment holdings during 2018 and Ominvest’s share of recurring income from its major subsidiaries & associates, Al Balushi opined that the company has further diversified its revenue sources and strengthened its cash flow position through attractive dividends from its major investments.
Responding to a question related to the impact of regional macro-economic conditions on businesses, Al Balushi elaborated that despite the difficult operating environment of the last 4 years, Ominvest’s performance has been resilient.
Particularly, in 2018, the company achieved important milestones in its key businesses and further diversified its strategic holdings.
He added that Omani and regional businesses across all key sectors continue to operate under challenging and uncertain economic conditions — as oil prices have been extremely volatile in recent years and are likely to remain as such in the foreseeable future.
Weak and volatile oil prices are leading to rising sovereign debt levels, budget deficits and tight liquidity conditions in the banking sector. Al Balushi highlighted that being cognizant of such macro challenges, Ominvest is prudently managing its assets and liabilities to maximize shareholder value while keeping potential risks well anchored.
Al Balushi affirmed that with a fiduciary responsibility for over 2,000 shareholders, Ominvest’s board and the management endeavour to meet the highest standards in corporate governance and strictly adhere to the applicable regulatory framework.
He added that as Ominvest has risen to become one of the largest and highly successful investment firms in the region, the company is taking its Corporate Social Responsibility with utmost passion and getting involved with various reputable institutions to help students, entrepreneurs and our communities in different ways.
Highlighting the critical importance of revenue growth and diversification, Al Balushi explained that as a result of the successful implementation of its investment philosophy and the business model, Ominvest has attained remarkable revenue diversification and significantly reduced downside risks to its profitability.
For instance, in December 2014, banking sector investments accounted for 82 per cent of Ominvest’s revenues, while by December 2018, banking sector accounted for just 44 per cent of its revenues, as Ominvest’s new businesses in other sectors including insurance, leasing, and real estate have added additional revenue streams.
While pursuing large-size value investments, Ominvest has further strengthened its balance sheet and capital structure. During 2018, Ominvest successfully raised and secured total funding facilities of over RO 250m at attractive terms from leading local and international banks and prominent Omani institutional investors.
Al Balushi stated that the company’s ability to raise such a substantial funding during current market conditions underscores Ominvest’s robust financial position and its strong relationships with leading banks and institutional investors.
Despite additional borrowings to fund new investments, Ominvest’s Debt/Equity ratio remains low at 0.92x and the company intends to maintain a conservative leverage position to be able to effectively manage potential risks during down cycles.