Bahrain-listed companies report second best profit growth in GCC

Bahrain companies reported the region’s second-highest sequential growth in profit as the final quarter of last year drew to a close.

The ‘GCC Corporate Earnings Report: Q4-2022’ by Kuwait-based Kamco shows there was a quarter-on-quarter growth of 26.4 per cent in profits reported by listed companies in the kingdom, just a shade under the 27.4pc reported by companies in Kuwait.

However, from a year-on-year (y-o-y) perspective total net profits for Bahraini companies fell by 43.3pc in Q4-2022 to $516.1m from $909.9m in Q4-2021.

Three out of the five largest sectors by market cap have witnessed y-o-y decline in their aggregate net profits during the quarter, namely the banking sector, the materials sector and the diversified financials sectors.

The banking sector saw its total Q4-2022 net profits decrease by 2.7pc y-o-y to $308.3m as compared to $316.8m in Q4-2021.

Three out of the ten banks in the sector posted losses during the quarter dragging down the total quarterly net profits of the sector.

Ithmaar Bank recorded a loss of $39.7m during Q4-2022, the largest loss among the banks contributing to the overall decline of quarterly earnings in the sector.

The bank’s loss was mainly attributed to impairments as well as higher taxation charges from the group’s subsidiary in Pakistan.

On the other hand, Ahli United Bank recorded the largest Q4-2022 net profit among banks at $183.5m as compared to $156.6m during Q4-2021.

In the materials sector, Q4-2022 net profits for Alba fell 78.2pc y-o-y to $104.6m as compared to $480.5m in Q4-21.

Full year profits for Alba dipped by 8pc y-o-y to $1.1bn in FY-2022 against $1.2bn profits in FY-2021.

The company attributed the fall in Q4-2022 profits to global supply-chain pressures, weak market sentiment and currency pressure on LME Price.

The telecom sector’s Q4-2022 earnings increased by 26.3pc to $46.4m as compared to $36.8m in Q4-2021 as both constituent telecom companies in the sector posted net profits growth during the quarter.

Posting robust earnings from higher operating profit on the back of strong revenue, Batelco (now Beyon) saw a 28pc y-o-y rise in Q4-2022 net profit to $43m, while Zain Bahrain’s net profit rose 8.1pc to $3.4m during the same period.

Aggregate FY-2022 net profits for Bahrain Bourse-listed companies reached $3bn recording a growth of 2.3pc y-o-y as compared to $2.9bn in FY-2021.

The banking sector recorded an FY-2022 net profits increase of 5.9pc to reach $1.3bn.

Similarly, FY-2022 aggregate net profits for the diversified financials sector witnessed a 4.7pc y-o-y growth to $247.8m up from $236.6m in FY-21.

GFH reported a 7.2pc net earnings increase during the year to $90.3m mainly led by growth in the investment banking business and significant contributions from the commercial banking subsidiary and infrastructure.

Meanwhile, listed companies for the GCC as a whole reported another record in aggregate profits during 2022 with growth seen almost across all member countries.

This came as economic activity in the GCC got a boost post the pandemic that resulted in one of the best GDP growth rates last year.

Manufacturing activity in the region, as seen from PMI figures, also showed a consistent growing trend, especially in Saudi Arabia.

Continued lending growth by banks in the region was another indicator of higher investments in businesses during the year.

Net profits reported by GCC-listed companies jumped to a record high of $273.3bn in 2022 as compared to $199bn during 2021.

The y-o-y quarterly profit growth was also led by higher profits for capital goods, energy and banks which more than offset the $3.2bn decline in profit for the materials sector that was mainly due to lower average selling prices that affected profits in the petrochemical sector.

The quarterly earnings performance for GCC-listed companies was also positive but with a modest y-o-y growth of 7pc whereas when compared to Q3-2022, profits declined by 20.8pc to $56.4bn during Q4-2022.

However, in sequential terms (quarter-on-quarter or q-o-q) five out of seven markets in the GCC saw a double-digit decline in profits during Q4-2022.




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