Overview
The positive economic growth witnessed during the second half of the year with steady recovery of oil prices and the increased government expenditure on major infrastructural projects has reactivated many sectors of the economy thereby ending the uncertainty created by the economic recession experienced during the later part of 2008 and early in 2009.
Al Maha’s sales touched RO 171 million in 2009, a decrease of 11% (RO 20.7 million) when compared with 2008. With this, your Company registered a net profit of RO 5.67 million in 2009 (2008: RO 7.35 million) , a decrease of 23 % when compared with 2008.
Earnings per share have decreased to RO 0.822 in 2009 (2008: RO 1.065), a decrease of 23 % due to the decrease in net profit.
Major events
The Ministerial Decision No. 8/2009 issued by the Ministry of Commerce & Industry early in 2009, amended the licensing fees of companies working in purchasing , storage, transportation, marketing & selling of petroleum products, which shall now be worked out at Baiza 4 per each Omani Riyal of the total annual revenue. Prior to the Ministerial Decision, the licensing fees was an annual fixed amount. This amendment has resulted in a large increase in licensing fees and consequently, expenses, leading to reduction in net profit.
Further, Oman Refineries & Petrochemicals Co. LLC has increased the purchase prices of petroleum products from Sohar Refinery with effect from August 2009, which has resulted in increasing the cost of sales and consequently reducing the net profit.
On the positive note, in order to increase our market share in the retail business, 7 new filling stations were opened in 2009, to take the total number of filling stations to 163. Further, total sales during the second half of 2009 increased by 13% over the first half of the same year, due to the increase of retail sales, commercial sales and aviation fuel sales.
The association with TOTAL, one of the world’s leading lubricant manufacturing companies, to promote their products in Sultanate of Oman through an agreement signed with their distributor in the Sultanate, has also brought successful results in terms of increased revenue from sale of lubricants mainly in the commercial sector.
During 2009, we have also signed up with a leading and reputed retail chain, to operate some of the Convenience stores in the filling stations, which is expected to add new dimension to our objectives of Omanisation & customer service.
Market share
Our market share in 2009 stood at approximately 26.7%, based on the information published in the audited financial results of the other petroleum products marketing companies.
Reliance on suppliers / customers
Oman Refineries & Petrochemicals Co. LLC with its depots in Mina Al Fahal, Sohar & Salalah (Raysut), constitutes our sole supplier of petroleum products.
Our customers portfolio included commercial & government organizations. In 2009, sales made to one of our main customers formed 11% of the total sales.
Future plans
The positive growth trend created by the reactivation of many sectors of the economy makes the future more promising. We plan to capitalise on most of the opportunities provided by the Government’s continued initiative on the development of major infrastructural projects. Our focus will be reoriented on improved services at our filling stations and dedicated customer satisfaction.
Dividend
In line with our consistent dividend policy of maintaining a sustainable dividend payment, which will address the financial strength of the company, support its long term strategies and at the same time, will pay a reasonable cash dividend to the shareholders, the Board of Directors has recommended a cash dividend of 55% of share capital (Baiza 550 per share) against 2009 profit, subject to the approval of the shareholders’ Annual General Meeting.
Below is the statement showing dividends declared since 2004 (when company became public): |
