With the first quarter unaudited results being published, overall, the majority of the sectors are showing a healthy upward trend in profitability. With gains in the financial, manufacturing and energy sectors being offset slightly by losses in the construction and diversified sectors. However, looking deeper into individual companies, we still see 24 companies reporting losses.
Stability seems to have returned to the financial sector, as banks continue to benefit from the continuously favourable interest rate environment and insurance companies were boosted by much better results at Liva, who reduced losses from RO 2.7 million to just RO 0.7 million. How much of this was due simply to the introduction of the new IFRS 17 accounting standard is not clear.
Within the Industrial sector, encompassing construction, manufacturing, and real estate, Oman's industrial landscape exhibits contrasting trends. Continuing woes at Raysut Cement, with losses surging from RO 0.8 million to RO 2.7 million have dragged down a relatively lackluster construction sector. In the manufacturing sector, solid improvements at Oman Cables (up RO 1.0 million) and Oman Flour Mills (up RO 1.6 million) were enough to offset the turn from profits of RO 1.2 million to losses of RO 1.6 million at Oman Refreshments, as the GCC backlash against American soft drinks in support of the Palestine cause is having a marked impact.
Lastly, in the service sector, whilst many of the power companies typically post losses in the 1st quarter, on the back of low seasonal demand for electricity, the leader of the pack was Abraj in the energy sector with profits up from of RO 2.6 million to RO 5.9 million. The fortunes of the oil and gas sector is now clearly dictated by OQ Gas Networks, which showed an improvement in profits from RO 11.5 million to RO 13.6 million.
[The author is an audit, assurance and ESG Partner with Crowe Oman karl.jackson@crowe.om. The article is based on financial data published by the Muscat Stock Exchange.]
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