Al Ahlia Insurance posts over 14% growth in net profit
Banks offer financing for Al Ahlia IPO subscription which will close on Wednesday
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’.