      Net income – OMR2.1mn, -35% Y-o-Y, N/M Q-o-Q, +24% EFGe
      Revenues – OMR64.4mn, -5% Y-o-Y, +2% Q-o-Q, -5% vs. EFGe
 
Oman Cables (OC) released its 1Q18 headline figures, with consolidated net profit after minority interest of OMR2.1mn (-35% Y-o-Y vs. net loss of OMR0.2mn in 4Q17), ahead of our net profit estimate of OMR1.7mn, despite sales revenues missing our estimate by 5%. The company reported consolidated revenues of OMR64.4mn (-5% Y-o-Y, +2% Q-o-Q). Even though the details are not available as of yet, the better-than-estimated bottom-line could be due to high margin sales mix during the quarter. The parent company (copper cables) reported net profit of OMR2.2mn (-33% Y-o-Y, +350% Q-o-Q, +15% vs. EFGe), whereas its subsidiary, OAPIL, reported net loss after minority interest of OMR0.12mn vs. our estimate of OMR0.2mn loss. 
 
Detailed financials and segment-wise data will only be available once the full financials are out.
 
Our view: Positive set of results in the current challenging period, and the company reversed its last two quarters of weak operating performance at its parent and subsidiary levels. Hence, we believe this would be supportive for the share price over the short term, which has seen 20% correction over the past three months. Even though Oman Cables is still a strong franchise in the construction materials sector due to its strong association with parent firm Prysmian Group and due to a strong balance sheet (net debt/equity of 0.2x) and relatively decent return metrics historically, we expect some volatility in its operations over the short term as the operational challenges still continue.  
 
Oman Cables: OMR0.900 as of 15 Apr. 2018, Rating: Neutral, TP: OMR1.280/share, MCap: USD212mn, OCAI OM/OCAI.OM
Sameer Kattiparambil