GCC corporate income up 24%

Better economic conditions boosted the net income of Gulf listed companies that have released quarterly results by nearly 24 per cent in the first nine months of 2010, according to a Kuwaiti financial institution.

The net profits of 292 of the 663 firms listed in the stock markets of the six-nation Gulf Cooperation Council (GCC) stood at around $25.4 billion in the first nine months, an increase or about 24 per cent compared with the first nine months of 2009, Markaz financial centre said.

Third quarter earnings of the companies, which account for nearly 80 per cent of the total market capitalisation in the region, also surged by 16 per cent to $8.7 billion over the third quarter of 2009 and by around three per cent over the previous quarter, Markaz said in a brief study.

“The commodities sectors’ impressive performance was the main factor for the high profit growth in some member states,” the study said.

Saudi Arabia reported 18 per cent year on year growth in corporate earnings to $5.4  billion in the third quarter of this year.

According to the report, factors such as the recovery in commodity prices, stable demand in major export markets, and weakening dollar supported strong growth in the commodities sector in the Kingdom.

The banking sector, on the other hand, dampened Saudi Arabia’s earnings prospects as they dipped by 27 per cent in the third quarter and around 15 per cent in the first nine months of this year, it said.

“High loan loss provisions and slow loan book growth dented the sector’s earnings growth, especially in the second quarter of 2010 because of their exposures to the Sa’ad and Algosaibi groups.”

Kuwait recorded one of the fastest growths in earnings though on the back of poor visibility. Quarterly earnings stood at $637 million, a jump of 57 per cent.

The UAE’s corporate earnings grew just by one per cent in the third quarter. While banks posted good results, telecom disappointed.

The report showed UAE banks posted mixed results during the first nine months of this year due to repercussions of the Dubai World debt problem.

Qatar continues to impress through its income performance with third quarter earnings increasing by 27 per cent led by banks and commodities.

Oman and Bahrain reported a decline in their third quarter income, with their overall contribution to GCC earnings remaining very minimal.

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