2Q18 results highlights
Net income – OMR1.93mn, -21% Y-o-Y, -7% Q-o-Q, +4% EFGe
Revenues – OMR61.5mn, +8% Y-o-Y, -5% Q-o-Q, +1% vs. EFGe
 
Oman Cables (OC) released its 2Q18 headline figures, with consolidated net profit after minority interest of OMR1.9mn (-21% Y-o-Y, -7% Q-o-Q), which came broadly in line with our estimate. The company reported consolidated revenue of OMR61.5mn (+8% Y-o-Y, -5% Q-o-Q), which also was in line with our estimate. The parent company (copper cables) reported a net profit of OMR1.9mn (-25% Y-o-Y, -11% Q-o-Q, -2% vs. EFGe), whereas its subsidiary, OAPIL, continues to be in red and reported a net loss after minority interest of OMR0.09mn vs. our estimate of OMR0.11mn loss. 
 
Detailed financials and segment-wise data will only be available once the full financials are out.
 
Our view: Although the Y-o-Y comparisons are not great, we view the 2Q results positively especially as the company maintained its momentum over the last two quarters after a very weak 2H2017. Despite being low demand summer months, the company’s both divisions have shown some resilience in its operating performance, which we take positively. Moreover, the improved crude oil prices and potential positive outlook for construction sector activities should boost its products demand over the medium term, in our view. 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 a strong balance sheet (net debt/equity of 0.2x) and relatively decent return metrics historically, but we would expect some volatility in its operations over the short term as the operational challenges still continue.
We will update you once full financials are available. 
 
Oman Cables: OMR0.888 as of 9 Jul. 2018, Rating: Neutral, TP: OMR1.280/share, MCap: USD210mn, OCAI OM/OCAI.OM
Sameer Kattiparambil