Lower profits: Burgeoning economic downturn, coupled with pandemic mitigation restrictions, dent revenues
MUSCAT: The Sultanate’s three principal fuel marketing companies reported a dramatic decline in their net earnings for the first quarter of this year, attributable largely to the effects of a burgeoning economic downturn slump as well as to a general lockdown ordered by authorities with the aim of curbing the spread of the novel coronavirus.
Shell Oman Marketing Company’s (SOMC) net profit after tax for the quarter ended March 31, 2020, dived 93 per cent to RO 0.122K, down from RO 1.775 million for the corresponding period in 2019, the company said in initial unaudited financial results published last month. Revenues dipped 2.2 per cent to RO 117.9 million this year, down from RO 120.5 million for Q1 2019.
Oman Oil Marketing Company (OOMCO), the biggest of the trio by market share, reported a 46.7 per cent decrease in net profit after tax to RO 602K this past quarter, down from RO 1.130 million for the corresponding quarter of 2019. Total revenue of the group was lower by 6.8 per cent at RO 131.752 million in Q1 this year versus, RO 141.390 million for Q1 2019.
Rounding off the list, Al Maha Petroleum Products Marketing Co announced a steep 86 per cent fall in net profit after tax for the first quarter at RO 137K, down from RO 980K in Q1 2019. Revenue for the quarter also declined 10 per cent to RO 100.459 million, down from RO 111.938 million for the corresponding quarter of 2019.
According to experts, the impacts are expected to be much more pronounced in the current second quarter following the adoption of full-blown pandemic mitigation measures, which have resulted in the curtailment of most local and international flights, while vehicular traffic has been reduced to a minimum. Motor and aviation fuels are mainstay revenue sources for fuel marketing firms in the Sultanate.