Muscat Insurance Company SAOG (MCTI) Earnings Call Transcript & Summary

Good morning, everyone. Thank you for joining today's investor call. We truly appreciate your time and continued support. During this call, we will provide a brief update on Muscat Insurance Company's recent performance, key developments and our strategic directions moving forward. In this room with us today, we have me, Sara Al Bulushi, Compliance Officer; Ms. Aleena Tony, Deputy CFO; Mr. Abdullah Al Abri, Chief of Quality and Data Protection; Mr. Mahfoudh Al Jafri, Chief Regional Manager; Mr. Abdullah Sudairi, Legal Researcher; Ms. Waheeda Pathan, Executive Board Secretary; and we have online with us the acting CEO, Mr. Syed Hussaini. To start, I'll briefly set the stage, and then, I'll hand it over to our acting CEO, Mr. Syed Hussaini for a broader overview and then for Ms. Aleena to take it over and run the financials in brief. We look forward to an engaging and productive discussion, and we are happy to address questions, if any.

Thank you, Sara. Good morning. I extend my sincere appreciation to our shareholders, customers, partners, regulators and employees for their continued support. Despite the challenging environment, the company reported a net profit of around OMR 1 million for the 6 months ended June 2026. Management is taking focused actions to strengthen underwriting performance, enhance operational efficiency and improve the portfolio quality. Now, I request Ms. Aleena, Deputy CFO, to present the Q2 figures. Over to you, Aleena.

Good morning, everyone. Thank you, Syed, and good morning, everyone, and thank you all for joining us today for the Muscat Insurance Company's MSX discussion session for the 6 months ended 30th June 2026. I'm Aleena Merin Uthup, Deputy CFO of Muscat Insurance Company, and it is my honor and privilege to be here with you today to present the financial performance and highlights of Muscat Insurance Company. Just to give an introduction about the company, Muscat Insurance Company was established in 1995 with its head office in Al Khuwair, and it has 9 branches across Oman serving customers across the Sultanate. Over the years, we have built our business on trust, financial strength, disciplined underwriting and customer service. Our focus continues to be on profitable and sustainable growth, operational efficiency, prudent investment management and strong risk management. As an MSX-listed company, we remain committed to transparency, sound corporate governance and creating sustainable long-term value for our shareholders. Today, I'll take you through the financial performance for the first half of 2026, our financial position, investment portfolio, key financial ratios and the major factors influencing our results during the period. Before we move on, I would also like to take this opportunity to thank our Board of Directors and the entire management team for their continued support, guidance and commitment towards the growth and success of Muscat Insurance Company. So let's -- following the presentation, we will be happy to take any questions from you who joined here. So let's begin with the financial highlights and performance. After that, we will go with financial performance, then on investment, key ratios, and finally, we will go to question-answer session. Starting with financial highlights. During the first half of 2026, Muscat Insurance Company reported the profit of OMR 1.045 million compared to OMR 0.407 million same period last year, which represents a significant improvement of approximately 157%. Insurance revenue stood at OMR 8 million compared to approximately OMR 9 million in previous year. Our gross premium was OMR 11 million compared to OMR 13 million same time last year. The insurance service results is negative OMR 392,000 compared to OMR 182,000 same period last year. In spite of having the increase in underwriting loss, our investment income has performed really well, and it shows an improvement of OMR 1.77 million compared to OMR 1.029 million same time last year. As a result, the combined net insurance and investment results improved to OMR 1.299 million compared to OMR [ 731,000 ] last year. Basic earnings per share is -- has increased from OMR 0.037 to OMR 0.095 as of 30th June 2026. Overall, the company's profitability during the period was strongly supported by disciplined investment management and a well-diversified investment portfolio. At the same time, management also remains focused on strengthening the underwriting profitability while maintaining a balanced and prudent investment strategy. Next slide shows the graphical presentation of what we have discussed already. It's related to insurance revenue starting from 2024 year-end, 2025 -- H1 2025 and coming to H1 2026. The net insurance service results is OMR 392,000 loss compared to OMR 182,000 loss previous year. The net investment income has improved substantially compared to the first half year in 2025, and the profit after tax has also improved substantially because of the higher investment income for the period. Now turning into financial position, our -- the company has a stable balance sheet compared to previous year. Total assets increased from OMR 41.7 million to OMR 45.6 million current year. The total paid up share capital remains same, OMR 11.025 million. The total investments has increased from OMR 27 million to OMR 32 million. It is because of the increased fixed deposits as well as the equities. The total liabilities has increased from OMR 23 million to OMR 25 million, and overall, the total equity has increased from OMR 18 million to OMR 20 million because of the accumulated profits and retained earnings during the current year. The net asset per share has increased from OMR 1.656 to OMR 1.820 as of 30th June 2026. Now moving on to the investment mix. As at 30th June 2026, the bank balances and fixed deposits is 48% of the overall total investment portfolio, which is slightly higher compared to previous year. The investment properties is 24%; bonds, 9%; and equities, 19% of the total investment portfolio, which is again higher compared to previous year. The key ratios involved, the net asset per share, if you are seeing the graph, it has actually improved in H1 2026, which is OMR 1.82 per share. And the earnings per share also has gone up from OMR 0.037 to OMR 0.095. The increase in equity investments together with our fixed deposit portfolio and other investment assets contributed positively to our strong investment portfolio. While we are also concentrating on the underwriting policies and monitor the claims trends to manage the underwriting profit more in the coming period. So just to give a summary before going to question-answer session, we would like to summarize our insurance gross premium is OMR 11 million and insurance revenue is OMR 8 million. The profit after tax is OMR 1.045 million. The investment income increased substantially to OMR 1.77 million, and the net per share is OMR 1.82 million compared to -- OMR 1.82 compared to OMR 1.656. And the earnings per share is OMR 0.095 compared to OMR 0.037 same time last year. We are happy to take any questions.

We would like to answer any questions in case of any queries regarding the financials presented as of 30th June 2026. We have a question in the chat, which is asking for the cost savings achieved during H1 2026. We would like to clarify, compared to previous year, we have approximately OMR 50,000 savings in the overheads compared to previous year. At the same time, our premium earned as well as the claims incurred also, we are continuously monitoring and taking care of with proper underwriting principles and procedures. So definitely, altogether, we will be having -- or put together will show an operational efficiency in the coming period. I have 1 more question in the chat requesting further reason for the increase in investment income. And could you please break down how the investment categories drove a 72% increase to OMR 1.77 million? As I mentioned, our total investment income is OMR 1.77 million compared to OMR 1.2 million (sic) [ OMR 1.029 million ] previous year. Out of this OMR 1.77 million, it is mainly driven by the market fluctuations coming approximately OMR 1 million and remaining OMR 800,000 -- close to OMR 800,000 is realized income coming from the interest income from fixed deposits, bonds and rental income of the company. So altogether, coming to OMR 1.77 million. I hope the questions are clarified. I'd like to know if any further questions are there. As there are no further questions, we would like to conclude, we would like to conclude. Management -- I just wanted to reconfirm that management remains focused on improving the underwriting performance, enhancing the operational efficiency and generate sustainable investment returns. And we also remain committed to create long-term value for our shareholders while maintaining strong corporate governance, prudent risk management and financial discipline. Thank you all for joining us, and I'll hand over to Sara.