Oman International Development and Investment Company (Ominvest), one of the oldest and the largest investment companies in the sultanate, has reported a 5 per cent growth in its group net profit for the year ended December 31, 2020.
At the group level, net profit attributable to the shareholders of Ominvest rose by 5 per cent to RO33.7mn, whereas net profit at the parent company level rose by 6 per cent to RO38.1mn in 2020, compared to the previous year.
The company announced its initial unaudited financial results for 2020 on Tuesday. The results are subject to statutory audit, review by the audit and control committee, and approval of the board of directors of Ominvest.
In a press statement, Abdulaziz al Balushi, group CEO of Ominvest, attributed the company’s resilient performance to its major subsidiaries, associate companies and certain strategic transactions completed during an otherwise extremely challenging year. He added that Ominvest’s portfolio companies nimbly adjusted to new operating routines necessitated by the onset of COVID-19 and continued to serve their customers efficiently.
“Ominvest ended the year 2020 with a strong financial position. Particularly, the company built a substantially large liquidity cushion enabling it to withstand difficult economic conditions and take advantage of emerging investment opportunities,” Balushi said.
During the last year, Ominvest’s banking subsidiary Oman Arab Bank (OAB) successfully merged with Alizz Islamic Bank; completed its listing on the Muscat Securities Market and became a SAOG company. Preceding the merger transaction, Ominvest also sold an 11.76 per cent stake in OAB to Arab Bank plc, resulting in Ominvest’s shareholding in OAB declining from 51 per cent (before the merger) to 31.64 per cent in the combined entity (after the merger).
After the sale of the stake, OAB’s classification in Ominvest’s financials was changed from a subsidiary to an associate with effect from June 30, 2020. Therefore, in line with IFRS requirements, from the date of the reclassification to an associate, Ominvest stopped consolidating OAB’s financials and implemented the equity method of accounting. In addition, the sale of its partial equity stake in OAB will result in a lower share of income with effect from the date of reclassification.
While lauding Omani government’s new policy initiatives and reforms to restore the sultanate’s economic strength over the next few years, Balushi cautioned that 2021 will be another difficult year for the local and regional businesses as protracted weakness in oil price is leading to rising sovereign debt levels, budget deficits and tight liquidity conditions in the banking sector. Therefore, firms need to become much more creative and efficient to survive through these difficult times and emerge stronger.
Balushi highlighted that being cognisant of such macro challenges, Ominvest is prudently managing its assets and liabilities, aiming to further diversify and grow to maximise shareholder value while keeping potential risks well anchored.
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