Oman's Al Anwar Holdings posts nine-month loss

Conglomerate reverses its 2009 gains as transition period continues

The company is diversifying away from construction.
The company is diversifying away from construction.

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Al Anwar Holdings, a listed Omani conglomerate with holdings in construction materials companies, posted a loss of OR 343,000 for the last nine months of 2010 against a profit of OR 3.326 million for the same period in the previous year.

The parent company, which has interests in aluminium, glass and ceramic tile to petroleum drilling supplies, paint and abrasives producers – though also has stakes in financial firms - saw total income fall 29% to QR 7.5 million from QR 10.7 million the previous year.

Operating income and expenses remained steady, though the company’s cash flow from operating activities fell 78% to OR 288,000.

The company, which defines itself as a private equity firm, is caught in a transition from industrial investments to the non-banking financial firms that began in 2007, according to analysts. Falcon Insurance Company, in which the company now has a controlling stake, and Taageer Finance Company, which provides consumer loans and loans for the purchase of construction materials, are two of the few companies that produced a higher return for the company than the same period in 2009.

By contrast, Al Maha Ceramics producing a loss almost twice the size as 12 months before – OR 75,000 against OR 37,000.

“The company started in 2007 to shift its portfolio to financial companies in an initiative put forward by the previous CEO,” said Joice Mathew, an analyst at United Securities in Muscat. “The company made an investment in Voltamp Energy, and at the same time it was a good time to be investing in the financial sector. It had been then trying to sell its holding in National Aluminium after a commodity price crash.”

He added that the company has also made investments into packaging companies, “though there is not a lot of information as to what will be proceeding from this”. Al Maha Ceramics, despite its losses last year, could still represent an “emerging cash cow” for the company. He was neutral on the company on 10th February, partly while awaiting details of the company’s strategy from its new CEO, David Wilson, who assumed the role last month.

Sagar Patel at Bank Muscat recommended a 'buy' on the stock on 2nd February.

Mathew added that the banking and construction sectors were expected to perform well this year, and referred to the OR 5 billion in investment the government has given the sector recently. The government has awarded many contracts in the last 12 months related to roads, water systems and oil projects.

Al Anwar Holdings’ shares rose 2.3% to 131 baisa – Oman’s small currency – on Thursday.

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