Corporate profits surge 164 per cent in Bahrain

The resumption of economic activity in Bahrain to almost full scale was reflected in higher corporate profits during Q2-2021 as compared to the peak of the pandemic last year.

Total Q2-2021 net profits for Bahrain-listed companies increased by 164 per cent year-on-year (YoY) to $663 million after key sectors posted an increase in net profits during the quarter, shows new research by Kamco Invest.

The Kuwait-based firm’s GCC Corporate Earnings Report for Q2-2021 notes that the materials sector in the kingdom reported profits during Q2-2021 at $246m as compared to a loss of $42.6m during Q2-2020.

Alba reported Q2-2021 net profits of $245.6m bouncing back from a loss of $43.5m in Q2-2020, with the smelter attributing its better-than-expected performance to higher LME prices and strong rebound `for global demand underpinned by economic recovery.

In the banking sector, Arab Banking Corporation (Bank ABC) and Ahli United Bank (AUB) posted robust Q2-2021 net profits pulling up the total net profits of the sector during the quarter which witnessed a 16.2pc overall increase to $244.7m.

Bank ABC reported a Q2-2021 net profit of $24.9m as compared to a loss of $5m during Q2-2020.

Meanwhile, AUB reported a net profit increase of $122.7m, a 17.8pc YoY rise from its Q2-2020 net profit of $104.1m.

AUB’s improved profitability was driven by an increase in net interest income and lower provisioning.

Total Q2-2021 net profits of the telecom sector in Bahrain improved by 5.2pc YoY to $50.5m.

Profits for Batelco were $47.2m, compared with $46m in Q2-2020.

Zain Bahrain posted a bigger profits increase of 61pc YoY to $3.3m up from $2.1m during the same period of 2020.

For the GCC region as a whole, net profits during H1-2021 more than doubled to $83.2bn as compared to $41bn during H1-2020.

The sequential (quarter-on-quarter) growth in net profit was also healthy at 17.6pc as a majority of the sectors posted growth as compared with last year.

In terms of sectoral performance, energy once again led the YoY rise in earnings posting $24.5bn or 267.4pc YoY jump in earnings from $6.7bn in Q2-2020.

Profits for the banking sector almost doubled YoY to $8.2bn during Q2-2021 and companies in the materials sector posted profits during Q2-2021 to the tune of $4.3bn as compared to a net loss of $0.78bn during Q2-2020.

On the other hand, sectors that were resilient during the pandemic saw a YoY decline in profits.

Telecom was one of the four sectors that posted a YoY drop, with profits reaching $1.64bn during Q2-2021, a decline of 11.6pc YoY and 18.6pc quarter-on-quarter (QoQ).

Insurance, retailing and food and staples retailing also posted marginal YoY reductions in profits during Q2-2021.

The energy sector reported the biggest absolute profits at $24.5bn, up almost four-fold YoY and 14.8pc QoQ, and the banking sector also reported higher profits during Q2-2021 of $8.2bn, almost double YoY and 1.9pc QoQ.

Profits for the materials sector stood at $4.26bn during Q2-2021 as compared to a loss of $0.78bn in Q2-2020, while the QoQ growth was also impressive at 49.4pc.




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