Shell Oman has announced that it has secured two-year contract from Oman Air to supply 50% of its aviation fuel requirement, starting from March 2019. Currently Shell is supplying 20% of Oman Air’s fuel requirement and hence, this award would be volume accretive.
Our view: We are positive on the news. However, aviation fueling is highly competitive and a low margin business, hence, we expect the profitability from the above contract to be nominal. (Company Disclosure, EFG Hermes estimates)
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