Bahrain companies report 9.5pc increase in profits

MANAMA: Bahrain and Abu Dhabi were the only two stock exchanges in the GCC region to report a rise in profits of listed companies during Q4 last year, shows new analysis.

According to Kuwait-based Kamco Invest’s GCC Corporate Earnings Report for FY-2020, companies on five out of seven exchanges in the region reported decline in profits during Q4-2020 whereas Abu Dhabi and Bahrain-listed companies reported 28.5 per cent and 9.5pc increase in profits, respectively.

However, for the year as a whole, total net profits for Bahrain-listed companies fell by 65.9pc to $700m from $2.1 billion in FY-19.

Among the largest three sectors by market cap only the banking sector saw its total FY-20 net profits decrease.

The sector’s FY-20 net profits fell 53.6pc to $677.2m from $1.5bn in FY-19, whereas the telecom sector registered 9.2pc rise in profits to $165m.

The transportation sector in the kingdom also saw its aggregate profits grow during FY-20 registering total profit of $36.3m compared with a net profit $27m during FY-19.

Four out of 14 sectors on the bourse recorded losses in FY-20.

The diversified financials sector registered the largest FY-20 aggregate loss with $193.8m that dragged the total FY-20 net profit of the bourse.

The decline in profits for the banking sector was largely attributed to Bank ABC’s FY-20 loss of $89m compared with $194m profit in FY-19 led by higher provisions.

On the other hand, Ahli United Bank posted the largest FY-20 net profit among banks in Bahrain at $452.2m marking a 38.1pc decrease from FY-19 net profit of $730.5m.

AUB’s fall in profits were attributed to primarily low net interest income and higher precautionary provisioning due to the Covid-19 pandemic.

Aggregate profits for the telecom sector improved by 9.2pc in FY-20 to $165m versus $151.1m in FY-19.

Both the listed telcos on the exchange saw their FY-20 earnings rise during the past financial year.

Batelco saw its FY-20 net profits rise 9.9pc to $150.7m while Zain Bahrain’s FY-20 net profits grew 2.6pc to $14.4m.

For the GCC as a whole, earnings reported by listed companies declined to a five-year low to $91.3bn in 2020 compared with $150.5bn during 2019.

The 39.3pc or $59.2bn decline came mainly on the back of decline in profits for Aramco (by 44.1pc year-on-year) followed by banking, real estate and materials sectors.

The three sectors accounted for 85pc of the decline in net profits for the year, excluding net profits for Aramco.

Excluding the oil giant’s numbers, the decline in GCC net profits was relatively lower at 32.6pc.

The only sectors that showed noticeable increase in net profits during the year were utilities and food, beverage and tobacco sectors that remained resilient during the pandemic due to their defensive nature.

Out of the 21 sectors on the Saudi exchange, 12 sectors witnessed YoY decline in profits whereas gainers only reported marginal growth.

In terms of sectors, energy sector once again reported the biggest decline of $6.2bn in net profits or 30.8pc YoY followed by banks and real estate with profit declines of 23.8pc and 94.9pc, respectively.

On the other hand, the utilities sector reported the biggest YoY growth in profits.




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