Seasonal factors affecting the company's marine unit and losses in its engineering unit are behind the 'muted' first quarter results of Renaissance Services, according to company officials and analysts.
In its filing to the Muscat Securities Market, the company said that although first-quarter net profit climbed from RO1.7mn in 2011 to RO2mn in 2012, operating profits at the company's Topaz Marine unit fell from RO8.8mn in 2011 to RO5.8mn, primarily due to a higher number of dry-docked vessels.
The Topaz Engineering unit's operating losses also widened, from RO1mn in 2011 to RO1.6mn in 2012 as the company worked through some loss-making contracts. The contract services division's operating profits jumped from RO2.8mn to RO5.4mn.
In his statement to shareholders, Renaissance chairman Samir Fancy said the engineering unit "has the right people and processes to return to profitable growth in a vibrant oil and gas market."
He said, "The results and progress achieved in the first quarter of 2012 are in line with expectations. In our annual report for 2011, we anticipated muted performance in the first half of 2012, followed by strong performance in the second half of the year."
Kanaga Sundar, senior analyst at Gulf Baader Capital Markets, said the muted performance is down to the loss-making engineering unit as well as the impact of the Caspian region's harsh winter on the company's marine unit.
He said, "The numbers have been below market expectations, and this can be attributed to the company's restructuring. The marine unit is one of the company's key units and there will be a seasonality impact in the first quarter."
© Muscat Daily 2012
