Record high of $196.5 billion earnings reported in the GCC, for 2021

Record high of $196.5 billion earnings reported in the GCC, for 2021

In the UAE, aggregate net profits for Dubai-listed companies moved back into the green, recording a net profit of $1.9 billion in the fourth quarter of 2021, up from a loss of $57.4 million in the 2020 same quarter

Earnings reported by GCC-listed companies jumped to a record high of $196.5 billion in 2021 as compared to $93.1 billion during 2020.

The $103.5 billion growth came mainly on the back of a jump in profits for Aramco by $56.1 billion or 113.8 per cent year-on-year basis followed by banking, materials and utilities companies, according to data given by Kamco Invest.

“The recovery from the Covid-19 pandemic and the relaxation of the restrictions globally significantly impacted economies in the GCC region, supporting the robust performance in earnings for FY-2021,”

said Junaid Ansari, head of Investment Strategy & Research at Kamco.

In the UAE, aggregate net profits for Dubai-listed companies moved back into the green, recording a net profit of $1.9 billion in the fourth quarter of 2021, up from a loss of $57.4 million in the 2020 same quarter.

Abu Dhabi-listed companies saw aggregate net profit increasing by 67 per cent year-on-year in Q4-21 to $5.1 billion compared with $ 3.1 billion in fourth quarter 2020, underscoring a remarkable year of healthy profits and several listings on the exchange.

Among the GCC countries DFM was the only exchange which recovered from a quarterly dip into the red in Q4-2020. Three out of the top five largest sectors in the exchange by market cap posted aggregate net profits growth during Q4-2021 including the banking sector, the largest sector of the exchange by market cap.

In the GCC, the four sectors — oil, banking, materials, and utilities — accounted for 85 per cent of the total full year net profit in 2021. Most of the sectors showed solid increase in net profits during the year, especially, the utilities and transportation sector witnessed remarkable jump in net profits 2021 after suffering subpar performance during the pandemic.

Out of the 21 sectors in the GCC, four sectors witnessed year-on-year decline in profits whereas the rest reported growth.

At the exchange level, Oman was the only market which reported a decline in aggregate net profits for listed companies during FY-2021 with a fall of 3.7 per cent.

In terms of sectors, profitability for the GCC banking sector reached one of the highest yearly levels during 2021, increasing by 52.9 per cent to reach $35.4 billion.

Banking sector profits reached the highest mark since 2018. The year-on-year increase in 2021 was broad-based across the GCC with profits for Kuwaiti banks almost doubled to $2.9 billion. Saudi and the UAE-listed banks also reported healthy profit growth of 59.5 per cent and 67.2 per cent during the year.

Higher profits also pushed the aggregate return on equity for the sector to a seven-quarter high level of 10.4 per cent at the end of 2021 as compared to 9.6 per cent in Q3-2021 and 8.1 per cent at the end of 2020. The banking sector represented 18 per cent of the total aggregate profits during 2021.

In terms of quarterly performance, net profits during Q4-2021 increased by 102.5 per cent year-on-year basis to $50.6 billion as compared to $25 billion during Q4-2020. In terms of sequential performance, profits were down by 9.0 per cent as compared to Q3-2021.

News Source: Khaleej Times

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