MUSCAT — The cash-rich Onic Holding SAOG has clocked 121 per cent surge in net profit for the nine-month period ended December 31, 2003.
The net profit has soared to over RO7.25 million compared with RO3.281 million recorded in the corresponding period of the previous year.
The share price reacted positively to the company's encouraging working results yesterday on the Muscat Securities Market by recording a gain of about three per cent at RO4.210 compared with the previous closing of RO4.090.
Analysis shows that the one encouraging factor that helps the company regain its lost glory is the robust growth in retained earnings — from a huge RO40.66 million of accumulated losses (as of March-end 2001) to earnings of over RO11.5 million as of December-end 2003. During the period under review, retained earnings grew by a whopping 152 per cent from RO4.55 million.
The impressive growth in net profit can be attributed to over four times jump in its unrealised gain on investments available for sale at RO3.065 million (December-end 2002: RO0.744 million) and RO2.52 million provision/release for impairment in associates, especially OIFC. Earnings Per Share works out to RO0.725 compared with RO0.328.
On a capital of RO10 million, nine-month profit of RO7.2 million is significantly convincing.
The profit and loss account shows 8.8 per cent fall in net underwriting income at RO1.86 million compared with RO2.04 million.
Though the operating income stood lower at RO5.9 million (RO7.2 million), operating expenses have come down drastically to RO1.8 million compared with RO3.8 million because of fall in general and administration expenses (RO1.2 million against RO1.86 million) interest expense and provisions write-off, etc.
As a result, profit from operations rose to RO4.11 million as against RO3.43 million.
Income from associates stood higher at RO0.745 million (RO0.196 million).
During the period under review, total assets witnessed a growth of about 19 per cent at RO50.49 million compared with RO42.56 million. The growth in asset size indicates the company's competence in maintaining a good business model. Investments witnessed over 140 per cent jump at RO22.1 million as against RO9.29 million recorded as of December-end 2002. Investments in associates have doubled to RO6.46 million compared with RO3.05 million.
General insurance funds increased to RO6.5 million as against RO6.1 million. Life insurance funds rose to RO10.1 million (RO9.6 million).
Net assets grew by 37.7 per cent to RO25.01 million compared with RO18.1 million. Net Assets Per Share works out to RO2.501 compared with RO1.817.
Total equity stands at RO24.8 million (RO17.89 million).
Onic Holding has two subsidiaries — National Life Insurance and Al Ahlia Insurance — with 98 per cent and 99 per cent stakes, respectively. Other associates include OIFC, Oman Orix Leasing, Al Anwar Industrial Trading, Al Anwar Ceramic, etc.
An eight-member steering committee, including the chief executive, has been managing the affairs of Onic Holding competently since September 4, 2001. Since 2002, the company has been successfully maintaining good cash flow and the credit indeed goes to the steering committee led by chairman Salim Hassan Macki and the management led by chief executive Akbar Ali Habib.
The steering committee appointed by the Capital Market Authority has been reviewing the company's operations, and since then, its initiatives, including diversification, divestment and asset realignment plans, have brought in good results. A board is expected to replace the committee after the full year results are announced some time in June 2004. The steering committee has been playing the role of a competent board while running the affairs of a company, which was struggling to come out of the red.
Other members of the committee are: Ahmed Salim Al Wahaibi (vice-chairman); Abdullah Al Salmi (chairman of MSM and executive vice-president of CMA); Ali Mohammed Jumah; Rajab Al Katheri; Abdul Aziz Al Balushi (NBO); and Ganeshan Sridhar (BankMuscat). The steering committee has been making a herculean task to fulfil its responsibilities to the best interests of shareholders and the company.
Onic Holding has already embarked upon an ambitious investment plan and is expected to acquire existing businesses as part of its new strategy to become a well-diversified company, having diversified investments.