A full year review of 94 listed companies on the MSX reveals mixed results across the sectors, with the largest companies in each sector dominating. The financial sector demonstrated resilience, driven by strong banking performance, while the industrial sector experienced uneven growth, with manufacturing and real estate showing strength, offsetting weaknesses in construction. The service sector, despite the additional IPOs, saw an overall decline in profitability, largely due to underperformance of the newly listed energy companies.

The financial sector demonstrated solid growth during the year, underpinned by robust banking sector performance. Expansion in lending volumes and a conducive interest rate environment positively impacted net interest income. Sohar International Bank with their full first year after taking over HBSC has shown remarkable performance with increased profit of RO 100m, compared to RO 70m last year as they they became the 3rd largest company (by market capitalization) on the MSX. It was a good year for Oman Arab Bank, with profits increasing from RO 20m to RO 30m.

Bank Muscat remains the pinnacle for Banks and maintained its market leadership with an overall profit of RO 225m, up from RO 212m. For insurance companies, the sector performance was dragged down by LIVA Group, reporting a loss of RO 5m from a profit of RO 6m last year, as last year included a gains on property sales and this year was impacted negatively from claims for the freak adverse weather damage in the UAE. Leasing companies continued in the shadows of the banks with modest profit growth.

The financial sector demonstrated resilience, driven by strong banking performance.

The industrial sector, continues to experience uneven performance. While manufacturing, and real estate segments have shown resilience, the construction sub-sector faces ongoing challenges. Most surprising this year was Galfar. Despite a 15% increased revenue, they registered a loss of RO 3.7m, due to higher finance costs and increased operations expenses. Raysut Cement continues to struggle to achieve profitability, reporting a loss of RO 8m up from RO 5m. Jazeera Steel and Oman Cement continue to maintain the sector’s profitability with strong results this year.

 

Similarly, in manufacturing, Oman Cables continues to deliver high profitability of RO 23m, up from RO 19m last year, with export driven revenue growth, particularly in the renewable energy sector. Oman Flour Mills also delivered excellent performance with profits up from RO 1m to RO 6m, again mainly due to higher export sales, combined with lower grain prices.

 

Voltamp had a similar result with an increase in profits from RO 1m to RO 6m on the back of a 36% surge in revenue. On the opposite side, Oman Refreshments experienced a significant drop in profitability, posting a loss of RO 3.5m compared to a profit of RO 6.3m, attributable to the GCC-wide consumer backlash against American products, stemming from the geopolitical conflict between Israel and Gaza. The real estate sector registered positive momentum with the launch of two new funds.

 

The service sector registered an overall decline of 31% due predominantly to the lower results posted by the two companies that came to the market via IPO. Collectively, OQ Exploration & Production (OQEP) and OQ Base Industries (OQBI), raised approximately RO 1bn. OQEP reported a decline in profitability from RO 627m to RO 315m, due mainly to gains on divestment in Block 60 recorded in year 2023 (prior to IPO). Excluding the divestment gain, the net profit for 2024 would have been 6% lower than 2023.

 

Similarly, OQBI also registered a decline in profitability from RO 47m to RO 28m, due primarily to the impairment of related party receivables and increased expenses recorded for future gas purchase contracts. In the energy sector, Sohar Power returned to the MSX after its bankruptcy was reversed (following a new electricity distribution agreement with Nama) and recorded a one-off profit of RO 37m in 2024, as the value of its assets were reinstated. Similarly, SMN Power, reversed their prior year loss of RO 26m (due to asset write downs) with a profit of RO 3.6m.

 

Oman's hospitality sector saw positive growth during the year, with a 6% increase in revenues. However, due to competition from market saturation, profitability remains a challenge. (The article is based on financial data published by the Muscat Stock Exchange.)

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