Profits of GCC-listed firms drop to $45.6bn

21/04/2009 00:00 AST

The impact of the global financial crisis showed on the profitability of the GCC (Gulf Cooperation Council) listed companies in 2008. According to the Kuwait-based Global Investment House (Global) report released yesterday, the total net income of GCC companies dropped by 19.8 percent to $45.6 billion in 2008 compared to $56.9 billion in 2007.

The study covers 466 locally listed companies, of which 153 are from Kuwait, 96 from Saudi Arabia, 88 from UAE, 52 from Oman, 39 from Qatar and 38 from Bahrain.

Out of the total companies, 283 companies suffered a decline in their annual earnings, while 109 firms incurred losses.

Saudi Arabia's corporate profits fell by 8 percent to $20.4 billion in 2008, as compared to $22.2 billion in 2007. Out of 96 companies, 13 companies incurred losses, while 45 companies suffered a fall in their profits.

Saudi Basic Industries Corp. (SABIC) registered the highest profits in 2008 at $5.9 billion, a drop of 18.6 percent from 2007 level of $7.2 billion. The drop was driven by a combination of decline in commodities prices led by oil and slowing global demand on petrochemical products.

Oil has fallen nearly $100 a barrel from its record high of over $147 last July, but has flattened out to trade around $50 for most of this month in part due to supply cuts by the Organization of the Petroleum Exporting Countries (OPEC).

Saudi Telecom Co. (STC) registered annual earnings of $2.9 billion, followed by Al-Rajhi Bank with $1.7 billion. SABIC shares dropped by 2.91 percent to SR46.60 and Al-Rajhi Bank by 3.16 percent to SR61.25 yesterday. STC shares were trading at SR43.10.

The Tadawul All-Share Index (TASI) continued to show negative performance. The index closed 31.53 points lower at 5,218.69 yesterday after dropping 216.28 points on Sunday.

The Global report said all GCC countries witnessed fall in corporate profitability except Qatar. Profits of the publicly-listed companies in Qatar increased by 30.7 percent to $7.6 billion in 2008 from $5.8 billion in 2007. Out of 39 Qatari companies, only one firm incurred a loss, while 8 firms witnessed a decline in their annual earnings. Industries Qatar registered the largest profit among all publicly listed entities in Qatar with near $2 billion profit for 2008.

UAE companies displayed the smallest decline in profit last year. The total net income earned by 88 UAE listed companies was slightly down at $13.5 billion. The drop was led by companies listed in Dubai Financial Markets, which experienced 13.9 percent decline, while Abu Dhabi companies showed a growth in earnings by 10.5 percent.

For more on this:

http://arabnews.com/?page=6&section=0&article=121745&d=21&m=4&y=2009

Arab News