The three months ending March-2012 witnessed an increase in profitability of GCC companies, the Kuwait based analyst firm Global Investment House said in its assessment of the performance of listed companies and Gulf bourses for the first quarter.
Total net income of GCC companies for the period was $14.5 billion, a 12.9 per cent increase over the March-2011 level of $12.9 billion. The study covers 543 locally listed companies, of which 39 companies are from Bahrain, 160 from Kuwait, 65 from Oman, 41 from Qatar, 144 from Saudi Arabia and 94 from UAE. The study excludes companies that have not reported their financial results, dual listing companies and companies whose fiscal year does not end on December 31.
By country, all GCC stock markets managed to enhance their bottom lines by the end of March 2012, barring the Bahrain bourse, with its corporate profitability declining by 0.9 per cent year on year (YoY), Global said.
The Kuwaiti market had the best performance among its regional peers, with its corporate profitability increasing by 40.6 per cent YoY after excluding non recurring earnings of Wataniya of KWD265.5mn which was recorded in 1Q2011 due to a revaluation of the existing held interest in Tunisiana following the increase in the shareholding from 50 per cent to 75 per cent. We also exclude dual listing companies from the study.
By sector, 1Q2012 aggregate net profits for GCC Banking sector increased by 9.9 per cent YoY. Insurance sector was also a notable gainer, with its aggregate net profit increasing by 34.7 per cent YoY by the end of 1Q2012.
On the negative side, aggregate net profit of GCC services stocks retreated marginally by 0.2 per cent YoY, as it dropped from $445 million in 1Q2011 to $444.3 million in 1Q2012.
During 1Q2012, the overall profitability of companies listed on the Muscat Securities Market (MSM) (excluding companies with fiscal year not ending on December 31) reported a rise of 18.3 per cent amounting to $414.3 million compared to $350.1mn reported in the corresponding period of 2011.
The Industrial sector’s consolidated net profit soared 32.2 per cent amounting to $56.7 million in the three-month period of 2012 from $42.9 million in the corresponding period of 2011. This was due to noticeable gains reported by most of the sectors’ components.
Oman Cement Company (OCC) recorded an 8.6 per cent increase in top line to RO 13.9 million as sales volume reflected positively. This resulted in a 23.9 per cent increase in profits reaching RO 5.1 million as compared to RO 4.1 million registered in 1Q2011. The increase has mirrored strongly in margins. Gross margins increased to 40.1 per cent and net margins up by 450bps to 36.8 per cent during the quarter. The increase can be attributed to the inauguration of its new clinker line which increased the capacity to 2.4mtpa.
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