Muscat: Higher oil prices and the implementation of infrastructure projects in the Sultanate and other Gulf Cooperation Council (GCC) countries have made many industrial companies optimistic about seeing better growth this year.
Companies had undertaken a number of initiatives last year to reduce the impact of government spending cuts in the GCC, one of the main markets for Omani industrial firms.
Last year also brought about a number of domestic and external challenges, including continued volatility in oil prices. The political and economic conditions that prevailed in the region and other countries in 2017 limited the profit and revenue growth for many companies.
In its annual report, to be discussed on Sunday at the general assembly annual meeting, Oman Cement said good cost management and improved productivity last year helped overcome the effect of rising costs of key elements, and the hope was to maintain market share despite strong competition.
The company also plans to distribute 30 per cent of the nominal share value (30 baisas per share), which is the same as last year.
Raysut Cement said that it focuses on active markets with improvement in operational processes. It added that a number of factors affected its financial results last year, especially the decline in demand and rising costs resulting from the high cost of energy, raw materials, maintenance, as well as increasing income tax.
On March 13, the company approved a cash dividend of 29 per cent (some 29 baisas). Raysut Cement is the largest industrial company by market value, worth OMR159.20 million, with its shares closing at 796 baisas.
The Oman Cables Industry said it maintained its 2017 sales volume despite market conditions, noting that it benefited from a 19 per cent hike in copper prices from 2016. Copper is the main component in cables.
Al-Jazeera Steel Products said improved oil prices and a commitment to reducing production will contribute to boosting the national economy and increasing growth, which will stimulate the construction sector.
At the same time, the company said that challenges remain. This year, it will continue focusing on improving factory usage, cost control and increasing sustainable margins through diversification of markets and geographical areas.
Al-Jazeera Steel Products is one of the leading industrial companies that achieved a good growth rate in 2017, increasing its net profits by 6 per cent to OMR4.8 million. The company said 2017 was a good year in terms of sales, as it managed to sell and deliver the highest quantities. It added that the achievement was accomplished in a challenging year, starting with relatively high raw material prices followed by periods of volatility as the iron future market in China was affected.
In the Flour Mills sector, Salalah Mills said its revenues declined slightly last year to reach OMR57.1 million compared to OMR57.3 million in 2016. The parent company recorded a net profit of OMR4.1 million, which is a 9.6 per cent decrease from 2016, because of competition from flour mills in the UAE and from new mills in the Sultanate.
The group achieved a net profit of OMR3.9 million, an increase of 11.6 per cent from 2016, due to the improved performance of subsidiaries. At the annual general meeting (AGM) on March 26, the company plans to distribute a 50 per cent cash dividend or 50 baisas per share.