(MENAFN - Khaleej Times) The decline in share indices in the GCC countries has impacted profitability of Oman & Emirates Investment Holding Company (OEIHC) Group and its parent company, falling 20.43 per cent and 45.45 per cent, respectively during the first-half of 2008.
Oman & Emirates Investment Holding Group posted a net profit of Dh27.52 million (RO3.66 million) (Dh7.52:RO1) during the first six months of the year, against Dh34.92 million (RO4.6 million ) in the corresponding period.
The profit of Group's parent company fell to Dh20.30 million (RO2.7 million) in the period ending June 30 2008, from Dh35.347 million (RO4.7 million ) in the comparable period last year.
Under-performance of the trading portfolio is attributed to the decline in the stock indices towards the end of June 2008, says the director's report.
"The steep decrease in the market price of major scrips, where the parent company has higher weightage has limited the overall unrealised gains to Dh5.33 million (RO709,592) as against Dh 34.59 million (RO4.6 million) achieved during the corresponding period in 2007", the report stated.
However quoted investments under 'Available for Sale' category of investments appreciated to Dh17.14 million (RO2.283 million) during this period and are reflected in the equity and not in the income statement as per the accounting policy of the company.
Investments: In line with the strategy to strengthen the long term investments — investments under Associates, Available for Sale and Subsidiaries, the Parent Company during 1st half of 2008 has expanded its outlay on such investments. As at June 30, 2008, the aggregate value of long term investments has risen to Dh289.52 million (RO38.5 million) from Dh195.52 million (RO26 million) as at January 1st, 2008 and the increase is financed through additional borrowings and divestment of some trading portfolio.
During the current period, the parent company has stepped up its equity stake in FINCORP to 36 per cent from 29 per cent and also in Horizon Technologies Co SAOC to 20 per cent from 17.5 per cent as at January 1st, 2008.
The performance of the associate companies during this period was highly encouraging and resulted in a share of profit of Dh12.784 million (RO1.7 million), thus enhancing the income stream of the Group. The growth in the total assets, from Dh582.8 million (RO77.5 million) at June 30, 2007 to Dh814.4 million ( RO108.3million) on June 30th 2008 is a factor adding to the intrinsic strength of the Group, says the director's report.