GCC corporate earnings would post a muted earnings growth of 8 percent this year 2012 based on the overall net earnings for the second quarter which declined by 1 percent to $13.8 billion compared to the same quarter last year (year on year), the latest research published by Kuwait Financial Centre (Markaz) showed.
The report forecast Saudi Arabia to clock a 9 percent growth to $27 billion while UAE is expected to post a growth of 11 percent to $10.8 billion. Kuwait earnings were expected to contract by 5 percent to $3.9 billion. Banks (38 percent), commodities (23 percent) and telecom (14 percent) account for over 75 percent of earnings.
Banks to post a growth of 8% to $21.5 billion
Banks were seen to post a growth of 8 percent to $21.5 billion, commodities and telecom are likely to contract by 1 percent each, the report said, adding that overall, stock markets should look for triggers other than earnings to support it in 2012.
The overall net earnings for the second quarter of this year declined by 1 percent to $13.8 billion compared to the same quarter last year (year on year). The decline was led by Saudi Arabia and Kuwait companies whose aggregate net incomes dropped 6 percent and 27 percent respectively.
Bahrain also reported considerable weakness though it has a smaller share. Oman, UAE and Qatar firms’ net income grew 56 percent, 12 percent and 8 percent respectively. Among the three largest sectors (banks, commodities and telecom), commodities showed considerable weakness (-30 percent) while banks stayed put (+1 percent) with telecom showing some good signs of growth (+8 percent).
Earnings of Saudi Arabian companies totaled $6.5 billion
Earnings of Saudi Arabian companies totaled $6.5 billion, a 6 percent decrease compared to the same quarter previous year. SABIC, which reported $1.4 billion in 2Q profits, saw its bottom-line decline by 35 percent due to softening of global petrochemical prices and higher raw materials costs.
Saudi banks earnings increased 11 percent with Al Rajhi Bank reporting a 14 percent growth in net income to $558 million, on account of higher operating income. Telecom sector’s earnings grew 18 percent to $891 million as Etihad Etisalat’s earnings rose 22 percent to $379 million due to higher revenue from data services. Saudi Telecom posted a 7 percent growth in earnings at $642 million