Muscat: OQ Base Industries”OQBI”, which is currently undergoing transformation, has announced its dividend plans for 2024, aiming to distribute a total of OMR 32.7 million. Out of this, OMR 24.5 million will be paid out in January 2025, with an additional OMR 8.2 million to be distributed in April 2025.
OQBI's Chief Financial Officer, Ahmed Al Baraami, mentioned that the company is set to achieve a minimum annual profit growth of 5% in both 2025 and 2026 compared to the previous year, ensuring a sustainable increase in returns.
Al Baraami further stated that starting from 2027, OQBI intends to allocate any surplus funds to non-core operations, growth initiatives, or acquisitions.
This dividend strategy reflects our confidence in maintaining strong cash flows and our commitment to align shareholder returns with the company's financial health and long-term objectives, he explained.
He also mentioned that for the year 2024, the expected dividend per share is Bsz 9.5, with a dividend range expected to be between 8.5% and 8.9%, with a projected increase of at least 5% in both 2025 and 2026.
He noted that at a share price range of Bzs 106 to 111, both Category 1 investors (both local and foreign institutions) and Category 2 individual investors are expected to receive a dividend yield between 8.5% and 8.9%.
Al Baraami highlighted, "OQBI's superior returns are attributed to our stable cash flow and disciplined financial management." He pointed out the company's solid financial history and structured dividend policy, along with consistent EBITDA margins. "These strengths, in combination with our careful approach to capital allocation, position us as a dependable and appealing investment option," he concluded.
Regarding OQBI's performance in the first half of 2024, the CFO stated, "During the first six months of 2024, our EBITDA reached OMR 39 million, achieving a margin of 37.4%.
He highlighted the company's outstanding performance in 2022, with its adjusted EBITDA hitting OMR 92.7 million and a 43.0% profit margin, propelled by increased sales, particularly in liquefied petroleum gas (LPG), and rigorous cost management strategies. The company's performance in 2021 was also impressive, with its adjusted EBITDA standing at OMR 61.3 million and a profit margin of 39.7%, showcasing effective cost management and operational efficiency.
Al Baraami mentioned that in 2021, the company secured total sales of OMR 154.2 million, with the bulk of this coming from methanol and ammonia sales at OMR 126.3 million, with LPG sales making up a smaller share at OMR 27.9 million. He pointed out that this year acted as a benchmark for the company's operational stability.
He reported that OQBI experienced significant growth in its sales in 2022, reaching OMR 215.6 million. This growth was mainly due to the increase in LPG sales, which more than tripled to OMR 74.6 million.
The growth was fueled by favorable market conditions and high demand, he elaborated. "The operations in methanol and ammonia brought in revenue of OMR 141.0 million, showing steady progress.
He further stated that the company's sales in 2023 remained consistent at OMR 196.2 million. Although methanol and ammonia saw a minor drop in revenue, LPG saw a rise, reaching OMR 79.8 million, driven by strong demand in the sector. By the first half of 2024, the company's total sales had climbed to OMR 104.3 million, with methanol and ammonia contributing OMR 68.3 million, and LPG adding OMR 36.0 million. This indicated the company's continued stability across its product lines," highlighting the company's capacity to maintain steady sales performance throughout market fluctuations.
