Dividend Distribution Policy Statement
Sembcorp Salalah Power and Water Company SAOG (the “Company”) is committed to delivering sustainable and long-term value to its shareholders while maintaining a strong financial position and ensuring business continuity.
This Dividend Distribution Policy (the “Policy”) establishes a transparent framework governing the declaration, recommendation, and payment of dividends, in compliance with the requirements of the Financial Services Authority (“FSA”), including Circular No. 3/2025 (“Circular 3/2025”), and applicable laws and regulations of Oman.
Objective and Purpose of the Policy
The purpose of this Policy is to:
a) enhance transparency and clarity to the shareholders and enable investors to make better informed decisions;
b) communicate the Company’s approach to dividend determination, timing, and disclosure;
c) balance shareholder returns with the Company’s funding requirements, debt obligations, and growth strategy; and
d) align with Muscat Stock Exchange (“MSX”) guidelines and international best practices on dividend disclosure.
Dividend Intent / Philosophy
Any dividend recommendation is not guaranteed and remains dependent on the Company’s financial performance, liquidity, regulatory requirements, covenants under the financing documents, future capital expenditure requirements, prevailing market conditions and availability of distributable profits and sufficient cash flows. Dividend distribution may vary depending on the Company’s operational and financial outlook. The Board of Directors (“Board”) of the Company may, at its discretion, recommend the declaration and payment of dividends to shareholders.
The Company seeks to adopt a balanced and prudent dividend approach that:
a) provide shareholders of the Company with a stable return on investment;
b) preserves sufficient capital to support operations, maintenance, and growth of the Company;
c) maintains adequate liquidity and solvency for the Company; and
d) protects the Company’s long-term financial sustainability.
Forms of Dividends
Subject to the requirements of the applicable laws and regulations of Oman, dividends may be distributed to shareholders in one or more of the following forms:
a) Cash dividends;
b) stock dividends, if deemed appropriate; and
c) any other form permitted under applicable laws and regulatory requirements.
Key Determinants for Dividend Declaration
In determining the amount and timing of any dividend distribution, the Company’s Board will take into consideration various factors, including but not limited to:
a) the Company’s net profits, accumulated retained earnings, and availability of distributable reserves;
b) cash flow generation, liquidity position, and overall financial flexibility;
c) planned capital expenditure, maintenance requirements, and operational funding needs;
d) the Company’s debt profile, financing arrangements, and compliance with financial covenants;
e) prevailing macroeconomic conditions and the regulatory, operational, and market outlook of the power generation and electricity sector in which the Company operates; and
f) any applicable legal and regulatory requirements.
Dividend Frequency
The Company shall consider dividend distributions on an annual or semi-annual basis, following the approval of its audited financial statements at a general meeting and in accordance with applicable laws and regulatory requirements.
Declared dividends shall accrue on the date of the general meeting which approved such dividends or any other date determined by the general meeting. In all cases dividends shall accrue to the holders at the end of working hours on the record date which shall in all cases be a day on which banks are open for business in Oman.
Legal and Regulatory Constraints
Dividend distributions shall be made strictly in accordance with the Omani Commercial Companies Law and shall not be declared if:
a) it negatively affects the joint stock company’s ability to pay its debts and financial liabilities on time; or
b) the dividend is paid out of fictitious profits; or
c) the joint stock company has sustained a loss which has not been fully extinguished.
No distribution shall be made except from the audit retained earnings of the Company after deduction and setting aside the appropriations including legal and voluntary reserves (if any), and any part of the profits allocated by the Company for the increase of the share capital.
Approval and Disclosure
Dividend recommendations are proposed by the Board and are subject to approval by shareholders at a general meeting. All dividend-related announcements, including the declaration date, record date, ex-dividend date, and payment date, shall be communicated in bilingual form (English and Arabic) through relevant platforms including but not limited to the MSX disclosure channels, Muscat Clearing and Depository Company (MCD) platform in accordance with applicable laws and regulatory requirements.
Transparency
The Company shall make this Policy publicly available to ensure transparency and provide clarity to shareholders and the investors community. The Policy shall be disclosed on the Company’s official website and through the MSX disclosure platform.
Such disclosure enables shareholders and the investing public to understand the Company’s approach to dividend distribution, including its guiding principles, procedures, and factors considered in determining dividends, in accordance with applicable laws and regulations.
Disclaimer
This Policy does not constitute a commitment to declare or pay dividends. Actual dividend declarations depend on the Company’s financial performance, cash availability, regulatory approvals, and other prevailing circumstances.
Amendments
The Board reserves the right to amend this Policy from time to time in response to changes in the business environment, regulatory updates, variations in financial performance, or strategic realignments. Any such amendments shall be approved by the Board and disclosed publicly in accordance with MSX rules and applicable regulatory requirements.
Contact Information
Mr. Humaid Salim Al Amri
Investor Relations Officer
Sembcorp Salalah Power and Water Company SAOG
Email: humaid.alamri@sembcorp.com
Tel: +968 23238510