Base-level income ‘should be BD500’

MANAMA: Bahrain-listed companies saw their aggregate net profits more than double (102.5 per cent) to $618.5 million in Q1-2021 from $305.4m in Q1-2020.

The major sectors by market cap namely the banking and materials sectors reported a year-on-year increase in net profits in Q1-2021 that was partially offset by profit declines reported mainly by capital goods, retailing and consumer services sectors, according to a report by Kuwait-based Kamco.

The banking sector registered a net profit of $374.4m for Q1-2021 compared to $228.4m for Q1-2020.

Bank ABC reported a net profit of $35.9m during Q1-2021 as compared to a loss of $52.8m during Q1-2020.

The turnaround came despite a 10.9pc decline in net interest income and mainly reflected a steep decline in provisions and higher non-interest income during Q1-2021.


On the other hand, Ahli United Bank recorded a net profit of $159.6m for Q1-2021 down from a net profit of $171m for Q1-2020 primarily due to lower net interest income driven by low-key benchmark interest rates as well as non-interest income.

Aggregate profits for the telecom sector improved by 4.3pc in Q1-2021 to $62.8m versus $60.2m in Q1-2020.

Both the listed telcos on the exchange saw their FY-2020 earnings rise during the past financial year.

Batelco Q1-2021 net profit jumped 4pc to $52.3m from $49.2m in Q1-2020 attributed to improved revenues and effective control of costs.

Gross revenues for the company increased by 2pc, mainly driven by year-on-year (YoY) increases in fixed broadband (up 19pc), adjacent services (17pc) and wholesale revenues (8pc).

Zain Bahrain’s net profit increased to $4.1m up by 10.6pc from $3.7m from the same period in 2020 led a decline in non-operating expenses coupled with a decline in interest expense.

Looking at the GCC as a whole, earnings reported by listed companies witnessed a faster-than-expected recovery during Q1-2021 backed by healthy growth seen in almost all sectors.

The recovery was led by a resumption in economic activity in the region despite controlled restrictions as Covid-19 cases remerged at the start of the year resulting in partial-lockdowns.

Business sentiments have remained upbeat as a result of one of the fastest vaccine administration in the world achieved by the GCC countries.

Quarterly net profits reached $40 billion during Q1-2021, up 49.2pc or $13.2bn as compared to $26.8bn reported in Q1-2020.

Earnings during the quarter also surpassed Q1-2019 level by 4.4pc.

The q-o-q growth as compared to Q4-2020 was even stronger at 59.9pc.

Moreover, the top 5 sectors in the region reported a y-o-y profit growth of 42pc with the bulk of the growth coming from the materials sector.

On the other hand, the three sectors that reported y-o-y decline in profits included consumer services, food and staples retailing and software and services.

Companies in the food and staples retailing and software and services sectors reported smaller profits due to a higher base in Q1-2020 that resulted in a decline in Q1-2021, whereas the decline in the consumer services sector was mainly led by losses reported by companies that continue to be affected by Covid-19 restrictions, including airlines and related industries.

Profits were up across the seven exchanges in the GCC with Kuwait’s listed stocks reporting the biggest increase during Q1-2021, whereas Dubai reported the smallest y-o-y increase of 23.1pc.

The energy sector reported the biggest profits in the region that reached $21.4bn, up 27.5pc y-o-y and 53.8pc q-o-q.

The banking sector also reported higher profits during Q1-2021 that reached $8.4bn recording a growth of 16.2pc y-o-y and 66pc q-o-q.

The sequential growth reflected higher provision led decline in profits in Q4-2020. Out of the 64 banks in the region, 46 banks reported a growth in profits as compared to Q1-2020.

Profits for the materials sector stood at $3.45bn during Q1-2021 as compared to a loss of $0.25bn in Q1-2020 and $1.6bn in Q4-2020.

The telecom sector, which reported limited impact from the lockdowns, reported a marginal y-o-y net profit decline of 0.8pc with profits at $2.2bn in Q1-2021, although q-o-q growth was strong at 34.4pc.

Out of 16 listed telcos in the GCC, eight reported a y-o-y decline in profits.




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