Al Ahlia Insurance posts better half-yearly results; issue to close on August 2

Muscat: Al Ahlia Insurance declared its unaudited interim results for the first six months of 2017, recording a growth of 14.5 per cent in net profit after tax from OMR2.24 million in first half of 2016 to OMR2.56 million in first half of 2017.
The net underwriting profit increased by 9.6 per cent from OMR2.10 million to OMR2.30 million and investment income increased by 41.4 per cent from OMR0.52 million to OMR0.74 million in first half of 2017 over first half of 2016.
Commenting on the results, Lloyd East, regional CEO, RSA (Middle East) & managing director of Al Ahlia said: “Despite the challenging environment for the industry, we have delivered strong growth in net profits due to our continued commitment and focus on profitability and providing best-in-class customer services. Our investment income has grown as a result of restructuring in our investment portfolio”
At the IPO price, the company offers an attractive average projected dividend yield of 9.3 per cent per annum for the first four years i.e. 2017-2020. The first dividend of 11 baizas per share is expected to be paid by the company in August/September 2017 with semi-annual dividend distributions thereafter.
Leading research analysts have recommended subscribing to the IPO of Al Ahlia Insurance and anticipate potential upside on listing. “We recommend investors to Subscribe to the IPO of Al Ahlia Insurance Company... The issue price of OMR0.300 offers upside potential of 10.4 per cent to our 12 Month fair value of OMR0.331 per share,” United Securities said.
“We arrive at a fair value of OMR0.320 per share for Al Ahlia Insurance Company,” according to Fincorp.
Earlier, U-Capital had issued its IPO note with a recommendation to ‘Subscribe’ to the IPO and a fair value of OMR0.350 per share implying a potential upside of 16.6 per cent to the IPO price of OMR0.300 per share.
Gulf Bader Capital Markets commented on the strong half-yearly unaudited results in their report. “First half of 2017 remain strong and supportive of the dividends...Net profits are above the full year IPO projections for 2017.” Other research analysts have also commented positively.
Based on the strong response, leading banks including Bank Muscat and Oman Arab Bank are providing financing for IPO for the retail investors. To avoid rush on the last day, investors should plan to complete and submit their applications at the earliest. The applications can be submitted at any branch of Bank Muscat, Oman Arab Bank, Ahli Bank, Bank Sohar, National Bank of Oman and Bank Dhofar before close of official banking hours on August 2, 2017.
Bank Muscat Investment Banking is the financial advisor & issue manager to the IPO.
Al Ahlia is a leading property and casualty insurer in Oman backed by strong promoters led by RSA Insurance Group and well supported by experienced local shareholders.