Al Jazeira Services Update

Services and a Insura ance

Other O services

Al Jazeira Services s S.A.OG

Result Update

            

 

United  Securitiies LLC 

Inves estment Reseaarch

RO 0.285 0

MSM M30 - 11,399

Good d Quality Investmen nt Pays… Again!

   

May 08, 2008

 

Key Figures Year

RO (,000)

Q1 200 08

Q1 20 007

FY 2007

Net sales s

1,622 2

1,24 47

5,863

Profitt from invs st

3,116 6

785 5

10 0,842

EBITD DA

3579 9

1,218

12 2,625

Net Profit P

3,446 6

1,14 43

12 2,094

Key Ratios

(%)

Year

Q1 200 08

Q1 20 007

FY 2007

NPM

212.5 5

91.7

206.3

RoA

7.6

4.7 7

3 31.2

RoE

10.7

6.9 9

4 40.4

Valu uations Year

(X)

Q1 200 08

Q1 20 007

FY 2007

0.062 2

0.03 36

0 0.097

PE (x x)

4.76

8.19 9

3 3.04

BVPS

2 0.142

0.13 33

0 0.24

V P/BV

2.08

2.22 2

1 1.22

EPS annualised a

Mark ket Price

0.285

Share es outstanding

223 3,434,340

Mark ket cap RO

63,,678,786

Relattive Price 1 mo onth

6 mo onths 12 months m

AJSS

MSM M

Service es Index

5.19% %

27.16%

7.69% %

37.32%

14.10%

1% 305.71

61.88 8%

52.03%

Reute ers

AJSS.OM 

Bloom mberg

AJSSS OM 

40.19%

Al Jazeira Services Comp pany SAOG is an Oman-based com mpany eng gaged in catering, housekeeping,

la aundry,

equipment e t

supply

and allied servic ces. The Company y is also engaged

in

in nvestment

activities

and

developm ment of ho otel prope erties. The e catering

business s segment is operated through its subsidiary,

Dra aeih

Ca atering

Services

y. The Inv vestment business activities Company cover ins struments s in compa anies liste ed on the Muscat Securities S Market, ov verseas markets as well priv vate equitties. AJS has a sta ake in a

restaurant chain in the Unitted Arab Emirates. The

Co ompany

also

offfers

man nagement

services for oil and d gas secttor propertty. Financiall Summary y

For the three t mon nths ended d 31 Mar 2008, Al Jazeira Services S Co ompany's revenue increased by 30% to t RO 1.622 million n as again nst 1.247 during

corresponding

period

las st

year.

ent income of the company c increased Investme to RO 3.1 million n as again nst RO 78 85 during onding period in 2007, registering a correspo growth 296% 2 .Net profit increased by 212 % to

RO 3.446 as again nst RO 1.143 millio on during Q1 2007 7.

We believe that the company y is highly benefitting fro om its in nvestmentts in the e surging g a real estate e secttor shares s in the GCC Marke ets. Accorrding to our calcula ations, forr construction and f montth of Q2 2 2008, the e company y is makin ng unreallized investment in ncome in excess off the first RO 3.4mn. 3 We e continue e with ourr buy reco ommendattion on th he stock.

S Services and Insura ance             

Otther servic ces

Al Jazeir J ra Serrvices s S.A.O OG

 

Result Update U

United d Securitie es LLC 

Invesstment Reseaarch        

  Major Investments (Assumed d no chang ge in the po ortfolio aftter Q3 200 07) Security Name First Gullf Bank

No. of o

Mktt value as on

Book k Value as s on

Unre ealized pro ofit

Share es

4/5/ /08 (RO ,000)

Q1 ‘08 ‘ (RO ,00 00)

Q2 08 (RO ,00 00)

2,152

1,778

374

890,2 239

ArabTec

6,161,9 911

10,014

7,752

2,262

ment Gulf Cem

1,955,0 000

1,339

1,224

115

ADCB

1,233,9 940

760

696

64

dy Cables EL Sewed

280,0 000

2,822

2,894

-72

Mobile Telecom T

382,0 000

961

993

-32

SODIC

115,0 000

1,785

1,937

-152

2,089,9 951

4,703

3,769

934

24,536

21,043

3,493

Gulfar (Oman) Total  

Analysis & Outlook k

Assuming g that the e company y maintain ns its porrtfolio com mponents unchange ed from 30th

Sept 200 07, our ca alculations s show th hat it is making m un nrealized iinvestmen nt income in

excess of RO 3.49 million during the period fro om 1st to April 2008 8 to 4 May y 2008. This

sive of the income generate ed from company’s normal o operations s as well as is exclus dividend income realised du uring the month of April 200 08. Its who olly owned d subsidia ary,

atering se ervices has s long term contrac cts which regularly adds few numbers to Draieh ca its top line. Durin ng Q1 20 008 operating incom me of Al jazeira services from cateriing business was RO 1.6 million.

Considerring the profit ge enerated by regula ar business of the company and the t investme ent incom me owing to buoyant mark ket condittions, we are fore ecasting the t

company y’s FY’08 earnings to be in n excess of RO 12 2 million. Accordin ngly the EPS E estimates s for FY’08 are revised to RO O 0.052. This discou unts the cu urrent ma arket price of

the share e by 5.6 times. t Additionally, Al Jazeira shares trade t at 1 1.5 of FY 2008E bo ook value. We W expect favorab ble capita al markett scenario and efficient e manageme m ent philosophy of inv vestment will translate into o excellen nt bottom m line number which prompts us to give positiive outloo ok for the compan ny and w we mainta ain our BUY B recomme endation o on Al Jazeira Services.

S Services and Insura ance             

Otther servic ces

Al Jazeir J ra Serrvices s S.A.O OG

 

Result Update U

United d Securitie es LLC 

Invesstment Reseaarch    

 

Income Statementt e Revenue

Operatin ng expens ses

FY 2004

Y 2005 FY

3,598

4,111

( (RO ,000)

FY 2006

007 FY 20

96 4,39

5,379

2,009

2,495

2,84 42

General and administration

996

961

817

1,025

Profit fro om operattions

564

631

70 09

839

ation Deprecia

27

23

2 26

3,4 464 50

Investment incom me / (loss)

1,812

3,972

-45 55

11,325

Dividend d from a s subsidiary

627

631

0

0

Income from asso ociate

157 209

0

205

2,19 90 23 36

4 446

388

Profit be efore taxation

2,953

5,030

2,20 08

12,222

Net proffit for the year

2,920

4,718

2,04 45

12,079

Finance charges Taxation n

33

311

16 62

Balance Sheet

RO (,0 000)

Investments in associates

1,817

1,937

1,68 80

on-currentt assets Total no

4,160

Investments at faiir value

able for sa ale Investments availa

143

2,135

4,270

18 84

2,24 46

4,192

Total cu urrent asse ets

4,133

12,759

1 12,838

16,02 23

26,4 434

Total assets

16,919

2 20,541

22,74 46

38,737

Share ca apital

6,926

8,866

12,413

12,4 413

Legal reserve

1,276

1,716

1,97 77 2,53 38

3,191

12,163

-192

-192

-27 77

2,090

d earnings s Retained Fair valu ue reserve

Total Sh hareholderrs’ equity Total no on-currentt liabilities s Total cu urrent liabiilities Total lia abilities

Total Sh hareholderr’s equity and a liabilities

289

3,067

289

1 16,270

4,921

20,49 99

6,696

32,0 041

11,127

1 15,361

16,70 01

29,908

926

1,434

4,10 02

4,126

4,866

3,745

1,94 42

4,703

16,919

2 20,541

22,74 46

38,737

5,792

5,179

6,04 44

8,829

This reportt has been prepa ared on the bassis of publicly avvailable informa ation, internallyy developed datta and other sou urces believed  to be relia able. While all ccare has been ta aken to ensure tthat the facts sttated herein aree accurate and tthe estimates, o opinions and  expectation ns contained heerein are fair an nd reasonable, n neither United S Securities LLC, n nor any of its em mployees shall b be, in any way,  responssible for the con ntents. This sha all not be construed as an offer to buy or sell th he investments rreferred to in th his report.