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Robust Nine Month Results Renaissance Services

The geographical diversity of its business, strength of its assets and liquidity has helped Renaissance Services post impressive numbers for the first nine months of 2008

Renaissance Services has posted impressive numbers for the first nine-months of 2008. The company’s focus on delivering consistent and sustainable growth through its existing operations has resulted in a strong performance for the nine months under review. In comparison with the same period last year, net profit without capital gain has increased by 57 per cent. Operating margins at 15.6 per cent are up on last year’s
Margins of 14.3 per cent in spite of severe inflationary pressure on costs, in particular affecting employment and living costs across all businesses and food consumable costs in the contract services business. The better margins, growth in operations and capital gains resulted in higher earnings per share (EPS) which is up by 91.5 per cent compared to the same period last year.

The net profit of RO22.4mn (US$58.2mn) includes a capital gain of RO4.8mn (US$12.48mn) arising from the divestment of the group’s technology businesses as announced in the first quarter (Q1). EBITDA of RO46.5mn (US$120.8mn) also includes RO6mn (US$15.6mn) from this divestment.


Uncertain times
Samir J Fancy, Chairman, Renaissance Services says in his report accompanying the nine-month results of 2008, “This statement is issued at a time of crisis and uncertainty in world financial markets. Yet against this background, the fundamentals of the Renaissance business model remain sure and sound. We are alert to the challenges of an unstable global economy ahead likely to feature high interest rates, lower oil prices and a stronger US dollar. We are calmly confident that we have the liquidity and appropriate business mix to remain resilient and growth oriented in a more difficult and less predictable business environment.”

The company has reiterated that it has no exposure to subprime or any form of toxic debt instruments and that there are no extraordinary write downs or a requirement thereof, in any part of its business. The company has strong and dependable cash flows to support all its obligations. Renaissance has carefully spread its current debt structure across a wide-range of diversified funding sources over the long term, comprising of a mix of more than seven local Omani banks and more than 12 international banks. Its working capital facilities too have a similar spread. Says Fancy, “Renaissance remains strictly and comfortably within the leverage ratios and covenants given to all financial institutions for all borrowings. All our long term projects are financed by secure long term debt at attractive rates.” The company has invested RO102 million (US$266mn) in capital projects so far this year and has secured appropriate long term funding sources to support this.

Renaissance will seek additional funds of RO67 million (US$175mn) in 2009 to support its recently announced new long-term contracts with oil and gas producers – building, owning and operating permanent accommodation for contractors for Petroleum Development Oman (PDO) in Oman and three new vessels for BP in Azerbaijan. The company is aware that the cost of debt will be higher, but it has the equity in-place and flexibility to start projects at this moment of turbulence. Renaissance is discussing financial arrangements, with a variety of potential lenders, who have shown a keen interest in backing its projects.

Innate strengths
A combination of blue-chip clients, modern asset integrity and long term contracts is at the heart of the stability and security of the Renaissance business model. It deploys a stringent credit policy. Beyond that the counter party risk on the customer side in terms of contract integrity and timely payments is also very limited, with the group’s top customers constituting more than 70 per cent of the company’s turnover. The international reputation and strong financial standing of its blue chip customer base is clear to see : in the private sector it has Agip KCO, Bechtel, BHP Billington, KBR, Maersk Contractors, Oman LNG, PDO, Port of Salalah, SBM, Serco, Saipem and Shell and in the public sector, the Government of the Sultanate of Oman.

Renaissance has current shareholders funds in excess of RO135.1mn (US$351mn). Says Fancy, “While we don’t provide earnings forecast that may prove misleading the company has clear visibility of more than 65 per cent of its forecast earnings for 2009 already secured; and the forecast EBITDA for 2009 is more than double our financial repayment commitments.”

The price of oil has been a concern area worldwide and proved to be notoriously difficult to predict. As oil falls to US$70 per barrel, most analysts point to a likely level of US$50 and do not rule out a rise or further fall. The question that arises is – given Renaissance’s focus of more than 70 per cent of its business providing services to the oil and gas industry – how long may the oil price fall without impacting the company negatively? The fact is the Renaissance business model is resilient to both high and low oil price. Renaissance’s principal business in offshore support vessel marine logistics, facilities management and life support services are focused primarily on operations and production rather than exploration; and these business services have proved remarkably resilient to the traditional cycle of boom and bust in oil price. Even the engineering businesses have sustained capacity well during low oil price periods with an emphasis moving from fabrication to maintenance.

The contracts that Renaissance operates and the assets that it deploys for those contracts are based on decisions taken by the oil and gas producers for their long term requirements and are not affected by short term fluctuations in oil price. The oilfields where Reniassance operates were planned and were feasible when oil price was at US$30 per barrel or even less. In addition the long term pressure on oil price of demand/supply ratio will not go away.

The strengthening US dollar is proving to be beneficial for the company. The US dollar is the currency of the oil and gas industry and Renaissance’s home market, Oman and other key Middle Eastern markets in which it serves have currencies pegged to the US dollar. The strengthening US dollar will help reduce the inflationary pressures on imports that have caused the company considerable cost burden over the past year. Coupled with the general economic downturn the company is witnessing some relaxation in material and asset costs in both the construction industry and shipyards around the world.

CSR activities
Renaissance’s commitment to support communities in which it serves continues in all its operational markets. For example, in the third quarter of 2008 it announced plans to provide support of RO250,000 (US$650,000) over three years to the Association of Early Intervention for Children with Special Needs in Oman. This financial support is specifically targeted towards a diploma programme in special education for 45 Omani teachers for children and will comprise of grants of RO80,000 (US$208,000) in October 2008, RO85,000 (US$221,000) in 2009 and RO85,000 (US$221,000) in 2010. Renaissance would like to highlight the outstanding work being done by this association and would like others to come forward and support them in whatever way they can for the teacher training programme and other important activities.

The breath and diversity of its business, geographical spread, the strength of its assets, health of its liquidity and the quality its people at every level of the organisation gives Renaissance the confidence that it is well placed to confront and to absorb the challenges ahead, while remaining alert to the opportunities that arise.





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Date Publication Description Open
Aug 15 Muscat Daily Renaissance Services posts Revenue of RO 108mn in H1 Download
Aug 15 Times of Oman First phase of 'Renaissance Village' set to open this year Download
Jul 13 Oman Tribune Renaissance to begin bond repurchase Download
Jul 13 Oman Daily Observer Renaissance to repurchase third tranche of MCBs Download
Apr 03 Times Of Oman Renaissance Convenes Annual general meeting Download
Apr 03 Oman Tribune Renaissance Holds AGM Download
Apr 03 Muscat Daily Renaissance Holds AGM Download
Feb 15 Oman Tribune Renaissance reports loss Download
Feb 15 Muscat Daily Renaissance posts RO30mn net loss on one-off provision Download
Feb 11 Oman Daily Observer Duqm Port to have special berth for govt agencies Download
Feb 11 Times Of Oman Duqm authority signs OMR 55m Deal Download
Feb 11 Muscat Daily Sezad signs pact to develop govt berth at Port of Duqm Download
Feb 01 Oman Tribune Duqm port inks deal for government berth Download


Date Publication Description Open
Dec 16 Muscat Daily Fifteen students graduate in hospitality management Download
Dec 15 Times Of Oman Renaissance Supports Omani Students Download
Dec 14 Oman Daily Observer Renaissance graduates celebrate success Download
Oct 05 Muscat Daily Renaissance divests marine engineering unit for $18.5 Download
Oct 05 Oman Daily Observer Renaissance divests its Marine Engg subsidiary for $18.5m Download
Oct 05 Times of Oman Renaissance to sell marine engineering subsidiary Download
Oct 05 Oman Tribune Renaissance sells Topaz arm Download
Sep 28 Muscat Daily Renaissance unit acquires subsea vessels for $115mn Download
Sep 28 Oman Daily Observer Topaz Energy acquires Two more subsea vessels Download
Sep 28 Oman Tribune Topaz buys 2 vessels from Noeway's Vard Download
Sep 28 Times of Oman Renaissance subsidiary Topaz to buy two modern subsea vessels from Vard Download
Sep 15 Times of Oman? Reclassification of Renaissance mandatory convertible bounds Download
Aug 26 Times of Oman? Renaissance starts bond repurchase Download
Aug 12 Muscat Daily Renaissance report R01.9mn loss Download
Aug 12 Oman Tribune Renaissance net profit slips in H1 Download
Aug 12 Oman Tribune Renaissance H1 net slips on oil price fall Download
Aug 10 Times of Oman? Renaissance to repurchase second tranche of convertible bonds Download
Aug 09 Muscat Daily NBO was joint lead manager for Renaissance Group's $125mn dual-currency bond issuance Download
Aug 09 Times of Oman? NBO acts as joint lead manager in Renaissance's bond issuance Download
Jul 20 Times of Oman Renaissance prices its $125 million bond issue Download
Jul 16 Muscat Daily Renaissance prices $125mn,7.9% perpetual bond issuance Download
Jul 09 Muscat Daily CI reaffirms ratings of Renaissance MCBs Download
Jul 08 Oman Tribune Renaissance gets nod for bond issue,buyback Download
Jul 07 Muscat Daily Renaissance shareholders approve buyback of MCBs Download
Jul 07 Times of Oman? Renaissance shareholders okay bond buyback scheme Download
Jul 05 Muscat Daily Appoints advisers for bond issue Download
Jul 05 Times of Oman Appoints advisers for bond issue Download
Jul 02 Oman Tribune Renaissance hires banks for bond issue Download
Jul 01 Oman Daily Observer Renaissance Services resumes trading at MSM Download
Jun 30 Times of Oman Renaissance shares resume trading on MSM Download
Jun 30 Oman Tribune Renaissance resumes trading Download
Jun 30 Muscat Daily Renaissance Services shares recommence trading on MSM Download
Jun 30 Times of Oman Committed to Transparency Download
Jun 29 Times of Oman Renaissance future growth Download
Jun 29 Times of Oman Renaissance confident of meeting long-term growth Download
Jun 29 Times of Oman Muscat boures suspends Renaissance share trading Download
Jun 29 Oman Tribune CMA suspends trading in renaissance shares Download
Jun 29 Oman Daily Observer Renaissance services suspended from trading Download
Jun 29 Muscat Daily Renaissance shares remain suspended Download
Jun 25 Times of Oman Renaissance subsidiary awarded BP Khazzan camp facilities contract Download
Jun 25 Muscat Daily Renaissance subsidiary bags BP Khazzan camp contract Download
Jun 17 Times Of Oman Renaissance to hold key meeting Download
Jun 17 Oman Tribune Renaissance investors to meet on Jul 6 Download
Jun 16 Oman Tribune Renaissance bond prices surge 15% Download
Jun 16 Oman Daily Observer Renaissance Board okays repurchase of MCBBs Download
Jun 15 Times Of Oman Renaissance board approves repurchase of convertible bonds Download
Jun 15 Oman Tribune Renaissance get approval for bond buyback Download
Jun 15 Muscat Daily Renaissance plans to issue perpetual notes to fund convertible bond buyback Download
May 25 Oman Tribune Renaissance plans new JV Download
May 24 Muscat Daily Renaissance subsidiary setting up JV for provision of waste management services Download
Apr 29 Oman Tribune Renaissance honoured for cutting 45% carbon footprint Download
Apr 29 Oman Tribune Topaz to secure $550m loan to fund projects Download
Apr 29 Muscat Daily Renaissance-arm Topaz close to obtaining $550mn loan: Report Download
Apr 28 Times of Oman Sultanate's biggest solar project by Renaissance commissioned Download
Apr 28 Oman Tribune Solar power project opened at Renaissance facility in Fahud Download
Apr 28 Oman Tribune Pilot solar power project opened Download
Apr 28 Oman Daily Observer Innovative solar energy project opened in Fahud Download
Apr 28 Muscat Daily Renaissance solar project opened Download
Apr 02 Times of Oman Renaissance To Pay 10% Dividend Download
Apr 02 Oman Daily Observer Renaissance shareholders approved 10 per cent dividend Download
Mar 25 Oman Daily Observer Renaissance Services invests heavily into ICV Download
Mar 05 Times of Oman Duqm staff residences to be ready by mid-2016 Download
Mar 05 Oman Tribune Duqm staff housing project on schedule Download
Mar 05 Oman Daily Observer Duqm PAC Project to be completed by mid-2016 Download
Mar 05 Oman Daily Observer Duqm PAC Project to be completed by mid-2016 Download
Feb 16 Oman Daily Observer 35pc growth in Renaissance Services 2014 net Download


Date Publication Description Open
Nov 14 Muscat Daily MSM decline does not reflect strong market fundamentals Download
Nov 01 Business Today We all have a role to play in Oman's future Download
Aug 21 Times of Oman StanChart fund to invest $75m in Renaissance unit Download
Aug 21 Oman Tribune Topaz Energy gets $75m investment from StanChart PE Download
Aug 21 Oman Daily Observer Topaz secures $75m investment from Standard Chartered PE Download
Aug 21 Muscat Daily Renaissance subsidiary Topaz secures $75mn StanChart PE investment Download
Aug 12 Oman Tribune Renainssance registers H1 profit of 10.9m rials Download
Aug 12 Times of Oman Renaissance plans to offload less than 10% stake in Topaz Download
Aug 12 Muscat Daily Renaissance Services posts RO 10.9mn in H1 net profit Download Download
Jul 01 OER The quite Performer Download
Jun 22 Muscat Daily Oman boasts 38 firms among Forbes top 500 in Arab World Download
Jun 09 Times of Oman Topaz and Viking ink life-raft servicing pact Download
Jun 09 Oman Tribune Topaz signs pact with Viking Download
Jun 09 Oman Daily Observer Topaz and Viking sign global life-raft servicing pact Download
Jun 03 Times of Oman Renaissance backs Duqm with OMR100m investment Download
Jun 03 Oman Tribune Renaissance plans 110 m-rial accommodation facility in Duqm SEZ Download
Jun 03 Oman Daily Observer Renaissance committed to RO 100mn Duqm project Download
Jun 03 Muscat Daily Renaissance committed to RO 100mn Duqm accommodation project: Chairman Download
May 24 Times Of Oman Renaissance forms joint venture Download
May 15 Times of Oman Renaissance initiates work on Duqm project Download
May 15 Oman Tribune Renaissance posts 5.4m-rial profit in Q1 Download
May 15 Muscat Daily Renaissance Services Q1 net profit rises 11% Download
May 14 Times of Oman Chairman's Report Q1 2015 Download
Apr 30 Oman Daily Observer Renaissance divests UMS Download
Apr 30 Oman Tribune Muscat Overseas Group buys United Media Services Download
Apr 30 Times of Oman Renaissance sells UMS Download
Apr 15 Times of Oman Topaz bags another West African contract Download
Apr 15 Oman Tribune Topaz bags $11m order in West Africa Download
Apr 15 Oman Tribune Topaz bags $11m order in West Africa Download
Apr 15 Oman Daily Observer Topaz secures another W Africa contract Download
Apr 02 Times of Oman Renaissance bags OMR37m contract from health ministry Download
Mar 30 Oman Tribune Renaissance Services bags RO37mn Health Ministry contract Download
Mar 28 Oman Tribune Renaissance bags 37m-rial ministry deal Download
Mar 10 Oman Daily Observer Notice of the Annual General Meeting Download
Feb 11 Muscat Daily Topaz Energy bags $50mn contract Download
Feb 11 Oman Daily Observer Topaz wins $50 million West Africa contracts Download
Feb 11 Oman Tribune Topaz wins $50m contract in W. Africa to supply vessels Download
Feb 11 Times of Oman Topaz bags $50m contract in Africa Download
Jan 23 Times of Oman Topaz acquires modern anchor handling vessels Download
Jan 23 Oman Tribune Topaz Energy buys two anchor handling vessels Download
Jan 23 Muscat Daily Renaissance unit Topaz acquires two vessels Download
Jan 21 Times of Oman Renaissance sells its subsidiary National Training Institute Download
Jan 21 Oman Tribune Renaissance sells vocational training arm NTI to UK firm Download Download
Jan 21 Oman Daily Observer Renaissance to divest training business Download
Jan 21 Muscat Daily Renaissance Services divests NTI subsidiary Download


Date Publication Description Open
Nov 26 Oman Daily Observer Topaz wins $100m BP contracts Download
Nov 26 Oman Tribune Topaz Energy wins two BP contracts worth 38.5m rials Download
Nov 26 Times of Oman Topaz wins $100m contracts from BP Download
Nov 13 Oman Observer – National day publication – Oman faces & Places NTI featured under the Education Section "Training to become Skilled" Download
Nov 10 Muscat Daily Topaz Energy wins Lloyd's List 'Offshore and Energy' award Download
Nov 10 Oman Tribune Topaz wins Lloyd's List award Download