Net income – OMR3.4mn, -3% Y-o-Y, +36% Q-o-Q, +47% EFGe
Revenue – OMR132.6mn, +15% Y-o-Y, +8 Q-o-Q, +14% EFGe
 
Shell Oman Marketing Company (SOMS) reported its 2Q18 headline results, with net profit of OMR3.4mn (-3% Y-o-Y, +36% Q-o-Q), coming in well above our estimate of OMR2.3mn, as we were conservative during the quarter due to seasonality. Earnings beat was party supported by stronger-than-estimated revenue of cOMR132mn (+13% Y-o-Y, flat Q-o-Q) during the quarter, hitting an all-time high historically.
 
A strong set of quarterly numbers, and we were surprised to see such a jump in the company's revenue, which recorded its best figure historically. Even though the details of the results are not yet available, we assume the revenue and earnings beat could be due to a combination of: i) sales mix of high margins business (lubricants/retail fuels); ii) better-than-expected sales volume; and/or iii) any one-off impact. We currently have a Neutral rating on SOMS, as we expect competition pressure across its business segments to continue over the short term. 
 
Shell Oman Marketing: OMR1.485 as of 15 Jul. 2018, Rating: Neutral, TP: OMR2.150/share, MCap: USD391mn, SOMS OM/SOMS.OM
Sameer Kattiparambil, company