Saudi companies performed better than had been expected in the third quarter of 2010 as their consolidated net income soared by 19.5 per cent despite disappointing results by banks, a Saudi bank study showed on Tuesday.
The combined net profits of 137 of the 145 listed companies swelled to around SR21.1 billion in the third quarter of 2010 from nearly SR17.7 billion in the third quarter of 2009, showed the study by National Commercial Bank (NCB), the largest bank in Saudi Arabia by assets.
The petrochemical sector emerged as the star performer, with the net earnings of the 14 companies in the sector leaping by nearly 80 per cent to SR6.7 billion mainly because of higher oil prices, said the study, sent to Emirates 24/7.
The telecommunication sector also achieved good results, recording a staggering increase of around 69 per cent in profits to SR3.76 billion in the same period.
Other sectors posted gains namely tourism, transportation, insurance, and multi-investment with 138, 56.4, 62.6 and 32.8 per cent growth respectively.
“The performance in general was better than had been expected…on the other hand, the banking sector did not perform as expected,” NCB said.
“The 11 listed banks posted profits of SR5.1 billion in the third quarter of this year, a decline of 18.3 per cent compared to the third quarter of 2009…. the banks’ losses are mainly attributed to higher provisions as the cautionary approach is still the main attitude in the Saudi industry.”
Along with the banks, a few more sectors posted lower earnings namely cement, media and publishing, industrial investment, construction, and real estate with 4.1, 11.6, 22.3, 67.2, and 78.5 per cent respectively, the study said.
“Overall, given the global economic and oil environment, the results have been generally impressive and, in our opinion, we expect a positive momentum for the remainder of the year.”