Top listed companies cut Q1 costs by over 10%

16/06/2010 00:00 AST

Rigorous cost-cutting measures helped the top three listed companies in Dubai reduce their operating cost by more than 10 per cent in the first quarter this year compared with the same period of 2009, Emirates Business research shows.

Between them, the top three companies on the Dubai Financial Market – Emaar Properties, Emirates NBD and Mashreq – spent Dh194 million less on SG&A (selling, general and administrative expenses), which includes salaries, commissions and travel expenses for executives and salespeople, advertising costs, and payroll expenses and other operating costs, an analysis of their Q1 financial statements reveals.

Emaar Properties alone saved almost Dh134m, or 32.73 per cent, in SG&A during Q1 2010 compared with Q1 2009, making it the top saver in real terms among the top 20 companies that this paper analysed. Emirates NBD and Mashreq saved Dh44.7m and Dh15.3m, respectively, in operating costs during the same period, amounting to a saving of 4.78 and 3.2 per cent, respectively. Together, operating expenses for the three giants dropped from Dh1.82bn in Q1 2009 to Dh1.63bn in Q1 2010 – a fall of 10.63 per cent.

A broader study of the expense accounts of the top 20 listed companies on the DFM confirms the cost-saving trend, with 11 of the top 20 spending less in Q1 2010 compared with Q1 2009. The 11 companies whose expenses declined managed to save more than Dh265m between them.

At a little over three per cent, the overall fall in operational expenses from Dh3.7bn to Dh3.5bn for the top 20, however, is less muted, with the remaining firms spending almost Dh155m more in Q1 2010 than they did in Q1 2009.

In percentage terms, the largest saving in Q1 was made by National General Insurance, which managed to knock about 90 per cent off its Q1 2009 expenses in the latest quarter, followed by Al Sagr National Insurance (down 70.72 per cent) and Drake & Scull International (down 47.13 per cent). On the other hand, SG&A Gulf General Investment Company shot up by more than 62 per cent, and over 40 per cent for Arabtec.

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