15.4% decline in profits of companies listed on the Gulf stock exchanges in 2019

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Profits of companies listed on Gulf stock exchanges decreased by 15.4%, according to a recent study that compared between the previous year and 2018.

The Kuwaiti company, KAMCO Invest, revealed that corporate profits declined from $ 176.3 billion in 2018 to 149.3 billion in 2019.

The annual report of the company specialized in monitoring the performance of financial markets indicates that the companies listed in the Dubai Financial Market achieved the highest growth rate on an annual basis, an increase of 13.5% after achieving $ 10.3 billion.

On the other hand, Saudi companies, which account for 72.8% of the total net profits of companies listed in the Gulf markets, achieved the highest rate of decline in profits by 20.5% during 2019, reaching $ 108.6 billion, compared to $ 136.7 billion in 2018.

Affected sectors

In terms of the performance of the various sectors, the performance of the sectors with the largest market value, including energy, basic materials and real estate, decreased, to record sharp declines in the profits recorded for this year, according to the report.

The profits of the energy sector decreased by $ 22.6 billion, or 20.3% during the year, to reach $ 89.2 billion in 2019, compared to $ 111.8 billion in 2018.

The Saudi energy shares recorded a profit decline of $ 23 billion, while the energy shares listed on the Abu Dhabi market and the Omani and Qatari Stock Exchanges recorded marginal profits.

The basic materials sector recorded a decline of 68.6%, equivalent to 6.9 billion dollars, to reach the profits of the sector to 3.2 billion dollars.

Saudi companies operating in the basic materials sector topped the list of retreats after their profits declined by 73.1%, equivalent to $ 6.7 billion.

Against the backdrop of this decline, the basic materials sector in the Gulf markets moved to the negative region at the level of the Gulf Cooperation Council states.

The real estate sector recorded a decline of 20%, where its profits amounted to 4.5 billion dollars, which led to a decline in the profits of all real estate companies listed in the Gulf financial markets.

Banking sector

On the contrary, the banking sector profits increased by 10%, with a total profit of $ 37.2 billion in 2019, compared to 33.8 billion in 2018.

Net profit for the fourth quarter of 2019 decreased by 18.6% year on year, to reach its lowest level recorded in the past eight quarters.

Net profit was $ 31 billion, mainly due to the decline in profits of the main sectors.

Fourth quarter

Profits of listed companies in Saudi Arabia, Qatar and Kuwait decreased during the fourth quarter of 2019 compared to the rise in profits of the rest of the Gulf Cooperation Council countries.

The report indicated that Saudi Arabia recorded the highest rate of decline by 24.1%, while Abu Dhabi and Dubai recorded higher profits during this quarter.

Shares listed on the Abu Dhabi Financial Market achieved remarkable growth compared to the performance of the fourth quarter of 2018.

Regarding sectoral performance, the energy and basic materials sectors recorded again sharp two-digit declines in fourth-quarter net profit for 2019.

And led to a decrease in the total quarterly profits for the Gulf Cooperation Council states during it, while the inclusion of the Saudi “Aramco” company in the stock market doubled the market value and the profits of the companies listed within it.

However, the report pointed out that the companies related to Aramco achieved a decline in profits at a steady pace due to the decline in oil prices.

The report said that the decline in oil prices particularly affected oil exploration and marketing companies in the region, while most of the oil transport and refining companies recorded higher profits during the year.

He pointed to a decrease in the total profits of the sector by 20.3 percent in 2019, as a result of the decline in profits of “Aramco” by almost the same, explaining that with the exclusion of the company’s results for the whole year from the total profits of the sector, it is noticed that the sector’s profits have increased by nearly 13.1 percent.





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