Renaissance Increases Operating Profit by 35.8%

Renaissance has announced the preliminary results for the year ended December 31, 2008. The results are subject to audit by the external auditors and approval of the company’s Audit Committee, Board of Directors and Shareholders.

Renaissance is expected to post revenues of RO 234 million, up from RO 199 million in 2007. Net profit is predicted at RO 26.2 million up from RO 17.3 million in the preceding year.

In an announcement to the Capital Market the company highlighted the 17.6% increase in revenue and stated that its operating profit "has increased by 35.8% and operating margins have also improved from 13.8% in 2007 to 16% in the current year." This is seen as a remarkable achievement in a year of such high inflationary pressure.

The net profit of 2008 includes a capital gain of RO 4.8 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 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 directly to the income statement under finance costs. Based on the interest rate movements in future, any positive fair value related to the same Interest rate swaps will be written back. Inspite 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%.

Renaissance CEO Stephen Thomas said, "Whilst we remain alert to challenges in the current uncertain global economic environment, the Renaissance business model continues to show resilience to lower oil prices. In spite of greater scarcity and higher cost of financing, the company's growth plans remain on track and the announcement of these preliminary results provides a clear signal of our ongoing progress in difficult times."

The audited results are expected to be finalised and released later in the month and the company's Annual General Meeting is scheduled to take place on March 29, 2009.