The FINANCIAL — Saudi and Qatari companies have helped earnings of GCC firms to post 17 per cent growth during the third quarter to Dh49.5 billion compared to the third quarter of 2010, according to a report.
Saudi and Qatari companies have helped earnings of GCC firms to post 17 per cent growth during the third quarter to Dh49.5 billion compared to the third quarter of 2010, according to a report.
Total earnings, however, fell 4 per cent from the second quarter of this year, despite a strong performance by commodity companies and banks, said the report by Markaz.
"The region's continued dominance as a petrochemical hub, strong demand and increase in commodity prices over the last year augured well for companies in the region," it said.
Aggregate net profits in the commodity sector were $3.5 billion. Among sectors, banking continued to deliver the highest profits at $5.1 billion. Bank earnings grew 13 per cent year-on-year but fell 9 per cent sequentially.
"The turmoil we are witnessing in both Europe and the U.S. is having an inevitable impact on the regional credit markets as investor appetite in these two economic zones for Middle East debt has historically been strong," Steve Drake, Head of PwC Capital Markets Middle East, said.
"Until such time as we see stability in these markets, it is likely that we will see lower debt issuance volumes or perhaps a shift toward a heavier Asian market bias for Issuers."
Telecoms continued to drag overall earnings with bottom-line declines of 23 per cent year-on-year and 12 per cent over the quarter. Most telecom companies attributed this decrease to foreign exchange losses.
The real estate sector continued its recovery with aggregate net income of Dh773 million.
Earnings of Saudi Arabian companies totalled $6.9 billion, a 22 per cent increase year on year, but a decline of 2 per cent quarter-on-quarter. Sabic, which reported $2.2 billion in third quarter profits, led the growth.
Al Rajhi Bank reported 18 per cent year on year growth in net income to $516 million. The telecom sector's earnings fell 44 per cent year on year to $576 million as Saudi Telecom's earnings fell 53 per cent to $417 million due to heavy foreign exchange losses.
Kuwait corporate earnings grew 9 per cent year on year but dropped 2 per cent sequentially.
Banks delivered mixed results with earnings falling 6 per cent over the year but growing 13 per cent over the quarter to $570 million. National Bank of Kuwait reported a flat set of numbers with net income of $285 million.
Telecom companies saw their bottom-line decline to $309 million
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