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Muscat — The National Gas Company, a pioneer in the marketing of liquefied petroleum gas (LPG) in Oman and the region, has decided to exit its UAE operations, mainly due to continued decline in profit margins in the UAE market.
“Considering the continued decline in profit margins due to Oman’s inability to provide LPG supplies for export and the oversupply of gas in the UAE market, the company has decided to withdraw from its operations in the UAE region,” National Gas said in a disclosure on Monday Submitted to the Muscat Stock Exchange.
The decision to withdraw from the UAE – which is in line with the company’s business expansion and continuity policy in the commercial region – was taken after closely monitoring market conditions and no rebound is expected in the near term compared to the same period last year, National Gas noted, or mid-term.
It further stated that management is assessing the financial impact of (exiting the UAE) in accordance with IFRS 5 – Non-current assets held for sale and discontinuation of operations, the necessary adjustments to the carrying amount of the carrying investments will be made by 2022 Manufactured in the current quarter of September.
The company added that management will keep shareholders informed of further developments.
National Gas operates LPG refuelling plants and engages in the marketing and sales of LPG in the Sultanate.
In its recently released quarterly financial report, the national gas company said that the realisations of its UAE operations have been falling despite a significant increase in numbers amid a difficult business environment. It added in the report that the directors are working on a strategic plan to restructure and restructure the group’s businesses related to the UAE business.
At the group level, National Gas’ total revenue for the six months ended 30 June 2022 increased to RO52.74 million, compared to RO42.29 million in the same period last year. However, the group has a net loss position of around RO279,000 with a lower realisation rate while the business is still open post-pandemic.
Earlier this year, the National Gas Corporation also decided to pull out of India’s investments in light of the COVID-19 situation, the overall economic situation, and price hikes and escalations in project construction activities. The company’s board of directors has resolved to sell its investment in Indian subsidiary NGC Energy India Pvt Ltd, classifying the investment as a held-for-sale asset.
National Gas is currently finalizing documents to divest its 60% stake in NGC Energy India Pvt Ltd. According to the company’s second-quarter financial report, the equity transfer process is expected to be completed in the third quarter of 2022. Report.
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