Al Ah­lia In­sur­ance posts over 14% growth in net profit

Banks of­fer fi­nanc­ing for Al Ah­lia IPO sub­scrip­tion which will close on Wed­nes­day

Muscat Daily - - FRONT PAGE -

The com­pany’s net profit for the first half of 2017 rose to RO2.56mn com­pared to RO2.24mn in the cor­re­spond­ing pe­riod of the pre­vi­ous year

Al Ah­lia In­sur­ance Co, which launched its ini­tial pub­lic of­fer­ing (IPO) on July 4, re­ported a 14.5 per cent growth in net profit for the first six month pe­riod of 2017.

The com­pany’s net profit for the first half of 2017 rose to RO2.56mn com­pared to RO2.24mn in the cor­re­spond­ing pe­riod of the pre­vi­ous year. Al Ah­lia an­nounced its unau­dited in­terim re­sults for the first half of this year on Sun­day.

The sub­scrip­tion pe­riod for Al Ah­lia’s IPO will close on Wed­nes­day.

The com­pany’s strong first half year per­for­mance was backed mainly by a solid growth in net un­der­writ­ing profit and in­vest­ment in­come. While net un­der­writ­ing profit in­creased 9.6 per cent to RO2.3mn in the first half of 2017 from RO2.1mn a year ago, in­vest­ment in­come surged by 41.4 per cent to RO0.74mn from RO0.52mn.

Lloyd East, re­gional CEO of RSA (Mid­dle East) and man­ag­ing di­rec­tor of Al Ah­lia said: “De­spite the chal­leng­ing en­vi­ron­ment for the in­dus­try, we have de­liv­ered strong growth in net profit due to our con­tin­ued com­mit­ment and fo­cus on prof­itabil­ity and pro­vid­ing best-in­class cus­tomer ser­vices. Our in­vest­ment in­come has grown as a re­sult of re­struc­tur­ing in our in­vest­ment port­fo­lio.”

At the IPO price, Al Ah­lia of­fers a pro­jected av­er­age div­i­dend yield of 9.3 per cent per an­num for the first four years (2017-2020). The first div­i­dend of 11bz per share is ex­pected to be paid by the com­pany in Au­gust/Septem­ber this year with semi-an­nual div­i­dend dis­tri­bu­tions there­after.

Based on a strong in­vestor re­sponse to Al Ah­lia IPO, lead­ing Omani banks in­clud­ing Bank Mus­cat and Oman Arab Bank (OAB) are pro­vid­ing fi­nanc­ing for the IPO to retail in­vestors.

Al Ah­lia, a lead­ing prop­erty and ca­su­alty in­surer in Oman backed by strong pro­mot­ers led by RSA In­sur­ance Group, is of­fer­ing 25mn shares at an of­fer price of 300bz per share.

Oman’s lead­ing bro­ker­age firms and an­a­lysts an­tic­i­pate an up­side po­ten­tial on list­ing of Al Ah­lia shares and they have rec­om­mended to ‘sub­scribe’ to the IPO. ‘We rec­om­mend in­vestors to sub­scribe to Al Ah­lia IPO. The is­sue price of 300bz of­fers an up­side po­ten­tial of 10.4 per cent to our 12 month fair value of 331bz per share’, United Se­cu­ri­ties said. FinCorp ar­rived at a fair value of 320bz per share for Al Ah­lia In­sur­ance.

U-Cap­i­tal, which re­cently rec­om­mended to sub­scribe to Al Ah­lia IPO, es­ti­mated a fair value of 350bz per share, show­ing an up­side po­ten­tial of 16.6 per cent to the of­fer price.

In its com­ment on Al Ah­lia’s half yearly re­sults, Gulf Baader Cap­i­tal Mar­kets (GBCM) said, ‘First half of 2017 re­mains strong and sup­port­ive of the div­i­dends. Net profit is above the full year IPO pro­jec­tions for 2017’.

Lloyd East

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