Management Discussion and Analysis Report

Al Anwar Investments SAOG (AIC) (formerly Al Anwar Holdings SAOG) was incorporated on 20th December, 1994 as a publicly listed company on Muscat Stock Exchange (MSX). Shareholders in Extra Ordinary Meeting (EGM) held on 3rd January 2021, approved to change the status of “Holding” company to “Investment” Company. Over the last twenty-six years, we have built successful companies and exited some of them through stake sales or flotation.

Investment Strategy: Clear, Differentiated and Proven

Private-Equity & Private Investment in Public Enterprises (PIPE) model of owning and investing in private companies with the intention of growing them and improving their business performance forms the core of AIC’s investing framework.

At AIC, we crave for efficiency. And to achieve our goals, we follow an approach emphasizing investing in businesses run by cost-conscious and efficient managers.

After the investment, our role is to create an environment in which our entrusted CEOs can maximize both their managerial effectiveness and generate value for shareholders.

Our flexibility in capital allocation and willingness to carry out bolt on acquisitions, gives us a significant edge in the market. We are judicious in having ownership stakes with respect to getting a controlling/non-controlling/significant minority stakes in businesses, depending on the nature of opportunity at hand.

Oman Economy And Outlook:

  • The year 2020 was a challenging year for the Oman economy. The COVID-19 pandemic alongwith low-oil price triggered tremendous challenges for national economy, which have prompted the Government to undertake a set of precautionary measures including border closures, partial and full lockdown, and reduction in workplace attendance. Such measures had negative impact on the economic activity.
  • The Oman Government has announced a Budget for 2021 with a fiscal deficit at OMR 2.24 billion. As a result of fiscal and economic measures implemented in 2020 and economic diversification efforts including subsidy reforms to be implemented in 2021, public spending is estimated to be as low as OMR 10.88 billion in 2021, decreased by 14% as compared with the spending of OMR 12.66 billion in 2020.
  • Aggregate public revenue is also projected at OMR 8.6 billion in 2021, based on assumed oil price of US$ 45 per barrel.
  • The 2021 Budget also seeks to achieve a set of objectives, notably fiscal sustainability so as to continue achieving economic growth targets, a diversified economy, and targeted rates of domestic investment and foreign direct investment (FDI). Furthermore, the 2021 Budget endeavors to enable the private sector to play a greater role in accelerating economic growth, and to create more job opportunities.
  • The Government has undertaken a set of fiscal and economic measures with the aim to alleviate the consequences of the COVID-19 pandemic and a sharp decline in oil prices, so as to minimize the burden on public spending.
  • The World Bank pointed out in Global Economic Prospects (June, 2020) that Oman’s GDP is expected to shrink by 4% in 2020, but will grow by 2% in 2021.
  • The Government has introduced Value Added Tax (VAT) effective from 16th April 2021. The VAT rate of 5%will be applied in Oman and expected to generate OMR 300 million annually.

Performance Overview Of Muscat Stock Exchange Index (MSX):

For the last 5 years MSX30 Index declined by over 41% from 6,238 in April 2015 to 3,708 in March 2021 as result a large number of companies are trading below book value.

Market Capitalization (OMR Billions)

Description Mar-18 Mar-19 Mar-20 Mar-21
Banking and Investments 3.82 3.71 3.19 3.73
Services 2.80 2.14 1.83 1.84
Industry 1.14 0.85 0.76 0.83
Total Market capitalization 7.76 6.70 5.77 6.40

Since March 2018, the total market capitalisation of MSXreduced by approximately OMR 1.36 billion.

The value of traded securities during 2020 have reached OMR 441 Millionwith decline of -38.02% compared with last year which recorded OMR 712 Million.


AIC remains cautiously optimistic on the Oman economy and the potential to invest in our chosen sectors.

We are aware that the current economic environment represents an opportune time to acquire businesses which has synergy with our associates. As a nimble company with a strong balance sheet, we believe that AIC is in a robust position to take advantage of attractive opportunities.

We as an Investment company have always looked for growth businesses with a penchant for value investments.

We have a fully engaged Board, an exceptional management team and a strong corporate culture. Challenges still exist, and there’s always room for improvement, but as we head into our financial year ending 31st March 2021, we remain proud of these accomplishments and are optimistic about the future.

Performance Analysis

During the the period FY2006-07 to FY2020-21, shareholders of AIC have generated total return of 257% (cash dividends received + change in share price), which is around 9.5% p.a. CAGR.

Historical share prices & cash dividends adj. for stock dividends

The profitability for the year ended 31st March 2021 was impacted mainly due to absence of any major transaction in our investment portfolio, reduction of profits in our Associates, and the significant decrease in the value of our investments in MSX marked at market value.

Owing to the inherent balance sheet strength and comfortable Debt/Equity position, AIC has rewarded its shareholders with healthy cash dividends in the last 5 years.

Growth in our investment portfolio over the years has been achieved whilst maintaining a manageable leverage position.  As of 31st March 2021, our Debt/ Equity ratio was 0.60.

AIC maintains a cautiously optimistic approach with the core focus on manufacturing, financial services and education sector and continue to deliver on business simplification, regulatory requirements, controls, expense discipline and capital requirements. Going forward, in continuance of prudent policy framework, we will align the growth strategies accordingly.

AIC has a very focussed approach to its investments. We have a very strong manufacturing cluster which has constantly produced good returns.  Our other clusters are financial services which is a mature sector and has growth potential. Our education sector has very high growth potential and should expand rapidly.  Our investments are mostly strategic and we have a very small amount of trading investments.  Our objective is to ensure that we increase the profitability and consequently the value of each of our investment.

Our investment portfolio as of 31st March 2021 by clusters is as follows:

Our returns and our share of net assets of our associates and other significant investments for the year ended 31st March 2021 are as follows:


Name of the Company (OMR’000) % holding Carrying Value Share of Profit/ (Loss) Dividend Share of Net Assets
Voltamp Energy SAOG 24.68% 4,711 (88) 100 4,814
Al Maha Ceramics Company SAOG 23.74% 2,718 362 300 2,445
Arabia Falcon Insurance Co. SAOC 22.62% 4,501 377 234 4,404
The National Detergent co. SAOG 25.24% 4,658 225 215 3,642
National Biscuit Industries SAOG 29.22% 2,240 268 44 2,100
Oman Chlorine SAOG 22.15% 7,583 23 189 4,959
Al Ruwad International Education Services SAOC 43.51% 4,521 (83) 1,867

Other Investments

Name of the Company (OMR’000) % holding Carrying Value Fair Value Gain Dividend Income Share of Net Assets
Ominvest Perpetual Bonds (7.75%) 11.54% 7,000 NA 544 7,000
Dhofar International Dev.& Investment Holding SAOG (DIDIC) 8.33% 5,752 (612) 7,670
DIDIC Bonds (9%) 4.03% 1,000 NA 94 1,000
Almondz Global Securities Ltd. 11.94% 477 189 960
Bank Dhofar 0.3% 951 143 36 1,621

The cornerstones of our next three-year investment strategy are:

  1. Sustainable Operational Improvement of investee companies
  2. Opportune Monetization and acquisition of investments
  3. Effective cash management by prioritizing investment opportunities

Risks and concerns

AIC has a robust Board-approved Risk Management framework in place that adheres to industry best practices. Risk Management is embedded in all core business functions and is an integral part of the business strategy. AIC follows a proactive Risk Management approach in remediating internal and external risks through conducting regular risk assessment of its portfolio companies, operating environment and taking proactive action to mitigate emerging risks.

Risk issues impacting portfolio companies are proactively managed through close working relationships with investee companies and the prudent oversight of our Board representatives. Broadly, these risks take the form of increasing costs/ decreasing margins, competition from other sources of supply and shifts in customer preference for other solutions. Also, each of the investee companies have their own risk management process in place.

The COVID-19 pandemic has caused steep reductions in global economic activity severely hampering the businesses and human lives across the world. The underlying businesses of AIC are facing challenges in this regard and in our Associates, we have undertaken series of action plans, including zero based budgeting for cost rationalization, streamlining production processes and seeking industry support from the Government of Oman to circumvent the challenges and continue to generate value for our shareholders in these challenging times. Our immediate objective is to maintain values of our investment and ensure that they are profitable and do not face liquidity challenges.


We acknowledge the contribution of our Board Members for their wisdom and valuable guidance which has helped us in successful implementation of our strategy. Further, we appreciate the confidence entrusted by our shareholders.

Khalid Ansari
Chief Executive Officer