The Board of Directors of Renaissance Services SAOG in the Board Meeting held on February 22, 2009 has approved the annual audited results for the year ended December 31, 2008. The audited results are consistent with the initial un-audited annual results, announced earlier by the Company.
Renaissance has achieved record results for the eighth consecutive year in 2008. The consequence of continued focus on our values-driven operating model is yet another year of growth and record financial performance.
Revenues of RO 234 million (US $0.6 billion) are up from RO 199 million (US $0.5 billion) in 2007. Net profit of RO 26.2 million (US $68 million) is up from RO 17.3 million (US $45 million) in the preceding year. Revenue has increased by 17.6%, operating profit has increased by 35.8% and operating margins have improved from 13.8% in 2007 to 16%. This is an important achievement in a year of high inflationary pressure. EBITDA of RO 61.1 (US $159 million) has recorded a growth of 42 % compared to the previous year.
The net profit of 2008 includes a capital gain of RO 4.8 million (US $12.5 million) from the divestment of the group’s former Technology business. The company has had a prudent interest rate hedge policy in place over the years. Due to the extreme fall in US$ interest rates over the last quarter of the current year, there has been a material change in the fair value of the interest rate swaps. As a result, the company has taken a charge of the negative fair value of RO 2.7 million (US $7 million) directly to the income statement under finance costs. The last time the US Fed rate has fallen to such an historic low was 7 June 1954. Based on the interest rate movements in future, any positive fair value related to the same Interest rate swaps will be written back. In spite of this charge, the net profit before capital gain in 2008 has increased by 23.4%, compared to the previous year. Including capital gain the increase in net profit is 51%.
The better margins, growth in operations and capital gains resulted in higher earnings per share (EPS) and return on equity (ROE). EPS has increased to RO 0.103 (US $ 0.267) and ROE has also increased to 21.2% compared to 17.2% in 2007. The Renaissance balance sheet, with total Shareholders’ funds of more than RO 138.7 million (US $360 million), is well positioned to support future growth plans.
The Board of Directors has also recommended a cash dividend of 10% (at the rate of 10 baisas per share) and a stock dividend of 15% (at the rate of 0.15 share per share).
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