Kuwait listed firms Q1 profits lower

Companies listed on Kuwait’s stock market recorded lower combined income in the first quarter of 2011 despite a surge of nearly 19.5 per cent in the net profits of the banking sector, according to a Kuwait investment bank. A total of 155 Kuwaiti companies announced their financial results for the first quarter of this year, excluding 13 non-Kuwaiti companies, and 14 firms which their financial year does not end on December 31. Aggregate net profit of the listed firms for the first quarter of 2011 stood at KD305.34 million ($1.03 billion), down by 12.9 per cent over the first quarter of 2010, when their income stood at KD350.74 million ($1.2 billion), Global Investment House (GIH) said in a study. Adding non- Kuwaiti sector’s results, the aggregate net profit rose to KD338 ($1.15 billion) but remained around 13.5 per cent lower than their net earnings of around KD392 million ($1.33 billion). Annualized Return on Equity (ROE) retreated for all market sectors during the first quarter of the year ending on March 31, 2011, with the sole exception of the Banking sector, which saw its ROE growing by 10.45 percent in the first quarter of 2011 compared to an ROE of 9.93 percent in the same period of 2010. The report showed the investment sector had a negative return of 3.5 percent in the first quarter of 2011 compared to a positive ROE of 0.77 percent in the corresponding period of last year. As for the remaining sectors, their ROE retreated by variable percentages, with the real estate sector posting the steepest decline in its ROE, which stood at 0.09 percent, versus 4.61 percent in the same period. A breakdown showed all but the banking sector recorded decline in their profitability in the first quarter of this year. The real estate sector suffered most, with a plunge of nearly 98 per cent, followed by insurance firms, which reported a fall by 46 per cent. There was a decline of around 19 per cent in the industrial sector, 17 per cent in the farming sector, and about five per cent in the services sector. The report showed the banking sector accounted for nearly 51.19 percent of aggregate net profit in the first quarter of 2011. Its net earnings stood at around KD156.2 million ($531 million) in the first quarter of this year compared with 130.7 million ($444 million) in the first quarter of 2010. “Eight out of the nine listed Kuwaiti banks managed to improve their bottom lines in the first quarter of this year, including one bank that shifted from net loss to net profit--Commercial Bank of Kuwait (CBK),” GIH Said, adding that CBK posted a net income of around KD1.33 million ($4.5 million) in the first quarter of 2011.