Abu Dhabi firms report lower profits

Lower earnings by nearly 30 companies listed on Abu Dhabi’s bourse pulled down the combined income of most listed firms by 6.5 per cent in the first quarter of 2011 despite higher income by banks.

Balance sheets published in the semi official daily Al Ittihad showed banks were one of two sectors to record higher net profits in the first quarter thanks to better investment income.

The real estate sector, which was worst hit by the 2008 global financial crisis, recorded a surge in net income after Aldar properties, the largest real estate firm in the UAE, rebounded into profits in the first quarter of 2011 following a loss in the fourth quarter of 2010.

From around Dh8.17 billion in the first quarter of 2010, the consolidated net earnings of 51 listed companies that have released quarter results dipped by 6.5 per cent to Dh7.64 billion in the first quarter of this year, the report showed.
Higher earnings were reported by only 17 firms while 30 companies recorded lower income and the others suffered from losses.

The banking sector, which had been jolted by the global crisis and regional debt default problems, maintained its recovery and recorded a 8.3 per growth in net profits. From around Dh3.63 billion, the profits of 14 listed banks swelled to nearly Dh3.93 billion in the same period.

While there was growth in the government-controlled Union National Bank and the Abu Dhabi Islamic Bank, such major banks as National Bank of Abu Dhabi and First Gulf Bank reported lower earnings.

In the real estate sector, Aldar’s recovery lifted the sector’s total income, with the combined profits leaping by nearly 72 per cent to Dh300.9 million in the first quarter of 2011 from Dh174.2 million in the first quarter of 2010, according to their balance sheets.

The surge was due to a sharp recovery in Aldar’s earnings, which stood at Dh189.1 million compared with a loss of Dh314.2 million.

The income of Surouh, another key property developer, tumbled by around 42 per cent while that of Ras Al Khaimah Properties dipped by nearly 16.5 per cent in the same period.

The net profits of the telecommunication sector plunged by 22.7 per cent to Dh2.53 billion from Dh3.27 billion after a nine-per cent decline in the income of the UAE’s Etisalat to Dh1.8 billion from Dh1.97 billion. There was also a drop in the earnings of foreign listed telcom firms, including those of Qatar and Sudan.

The report showed there was a decline in the net income of other sectors, including energy, insurance, services and manufacturing.

“Despite less-than-expected results by leading companies, the banking sector is considered to be a good performer…most banks achieved good results in the first quarter and this indicates an improvement in the domestic economy,” said Mohammed Yassin, a well-known stockbroker based in Abu Dhabi.

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