Raysut Cement Group’s net loss revised upward to RO 97.6m for 2022

https://www.omanobserver.om/article/1134126/business/economy/raysut-cement-groups-net-loss-revised-upward-to-ro-976m-for-2022

OMAN DAILY OBSERVER / 15 MARCH 2023

CONRAD PRABHU

MUSCAT: Raysut Cement, the largest cement producer in the Sultanate of Oman, has announced a revised net loss incurred by the Group for the financial year 2022 to RO 97.634 million, up from RO 90.924 million in initial unaudited financial results earlier this year.

The revised figures were disclosed following the meeting of the Salalah-based publicly listed company’s interim Board of Directors last week. An interim Board of Directors, constituted by the Capital Market Authority (CMA), is currently overseeing governance issues at Raysut Cement following the discovery of financial anomalies that threatened to destabilize the group.

In a new filing this week, company officials said the Group had incurred a consolidated loss of RO 97.634 million in 2022 versus a loss of RO 13.585 a year earlier. The parent company racked up a loss of RO 93.761 million in 2022, up from RO 12.924 million in 2021.

It attributed the upward revision of the Group’s consolidated net losses – involving a differential of RO 6.710 million – to “adjustments made in the Group and subsidiary companies”.

It included an impairment loss of RO 5.868 million incurred by Duqm Cement Factory LLC against ‘Capital Work in Progress’ (CWIP), as well as finance charges of RO 0.203m and impairment loss against advances of RO 0.224 million sustained by the new Duqm outfit.

Also contributing to the differential were provisions towards Expected Credit Loss (ECL), finance charges, among other factors, in the case of 100 per cent owned subsidiaries Pioneer Cement Industries and Sohar Cement Factory. At the Group level, a deconsolidation adjustment of RO 3.35 million was also recognized.

Invoking its powers under the Commercial Companies Law and the Securities Law, the market regulator stepped in last December when Raysut Cement failed to suitably address concerns over “material misrepresentations” uncovered by the Authority in the Group’s financial reporting for Q2 2022.

The Authority intervened to dissolve the existing Board of Directors – powers it has exercised only for the second time in its history – and instituted a new ‘temporary board’ with a mandate to restore the company’s organizational and operational stability and thereafter to also address all of the shortcomings that led to its recent upheaval.