Omani oil marketing firms' in 3% sales rise
The oil marketing companies are also expected to continue their track record of high dividend payouts as their balance sheets and cash positions stay strong
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The total sales revenue of Oman's three oil marketing companies Oman Oil Marketing (Omanoil), Shell Oman Marketing and Al Maha Petroleum Products grew by just 3.1 per cent to RO510mn in the first six months of 2013 against RO494.3mn in the corresponding period last year.
Omanoil, which announced its preliminary results on Monday, outperformed Al Maha Petroleum and Shell Oman with its sales gaining six per cent during the six-month period to RO147.7mn compared with RO139.2mn in the same period last year.
Omanoil's net profit rose 20 per cent to RO4.97mn from RO4.16mn in the same period last year, the company said in its filing to the Muscat Securities Market (MSM) on Monday.
Omanoil shares closed 4.9 per cent higher on Monday.
Also on Monday, Shell Oman reported an 11.4 per cent drop in net profit for the first six months to RO6.04mn from RO6.82mn last year. Its sales revenue went up 3.4 per cent to RO208.8mn from RO202mn.
Analysts have a positive outlook on the sector for the rest of this year as the companies are expected to post moderate growth in sales volumes.
Joice Mathew, head of research at United Securities, said the performance of the three oil companies has been in line with our expectations.
"Omanoil earnings beat our estimates as the company witnessed six per cent growth in consolidated revenue with contributions from all the segments, except aviation, and recorded its highest-ever quarterly profits. Aviation segment revenue declined 35 per cent from a year ago as the company's fuel-supply contract with Oman Air was not renewed," he said.
"The performance of the other two firms was also in line with expectations. We expect revenue growth in the coming quarters to be primarily driven by gains in the retail segment," added Mathew.
Last week, Al Maha Petroleum reported a four per cent decline in net profit to RO5.24mn for the six-month period from RO5.44mn in the same period last year. The company's sales revenue for the six months remained nearly flat at RO153.5mn, compared with RO153.1mn in the previous year.
Suresh Kumar, head of research at Al Maha Financial Services, said, "We expect growth in the oil marketing sector to be moderate and in line with the growth of the economy, at around four to five per cent. The company stocks will show limited downside risk with a defensive approach. The oil marketing companies are also expected to continue their track record of high dividend payouts as their balance sheets and cash positions stay strong."
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