(MENAFN- The Peninsula) GCC listed companies' aggregate profits for the first quarter of 2015 (Q1, 15) are expected to decline 9 percent year-on-year (YoY) led by 45 percent YoY drop in the petrochemical sector, a result of lower product prices impacting the sector's profitability.
For banks, logistics and consumer sectors, earnings are expected to grow YoY in Q1, SICO's quarterly result preview on GCC equities noted.
The Investment Bank SICO, which covers 18 banks in the region, including four major banks in Qatar said Qatari banks are likely to report healthy top-line growth. The net profit of QIB is expected to grow by 25 percent in the first quarter on year-on-year basis.
"Robust lending book growth is expected to boost the bank financing and fee income. However, we expect provisioning charges to increase YoY," SICO analysts commented on QIB's performance.
QNB's net profit is projected to rise by 4 percent YoY, with 1.8 percent QoQ growth rate. "Net interest income and fee income of QNB is to grow, while higher Zakat and operating expenses to remain a drag, leading to moderate earnings growth".
According to the SICO analysts, Commercial Bank's higher provisioning charges and lower fee income is to negatively impact the bank's bottom-line.
GCC's petrochemicals' earnings are expected to decline by 45 percent YoY, led by lower product prices and some shutdowns. Lower product prices across the board are to weigh on profitability of Industries Qatar (IQ).
On the region's "real estate and construction sector" Q1, 2015 performance, the analysts noted: "Across in the UAE, earnings are expected to be relatively flat YoY, with earnings growth muted by lower property development revenues; although hospitality and retail segment are expected to record healthy growth. Within Saudi Arabia real estate sector, Akaria and Taiba's earnings to be lifted by one-offs relating to asset sales. We also expect subdued performance in construction sector to be continued from Q4."
The SICO analysts expect flat first quarter net-earnings for companies in its coverage. While volume growth during the year-to-date (YTD) period has been strong, lower pricing power and higher one-time employee costs are likely to weigh on margins.
Decline in YoY earnings in Ooredoo and Zain, led by currency impact and Iraq conflict will impact the region's telecom sector's overall earnings. "Q4 of Ooredoo impacted by several one-offs across group operations including currency impact and geo-political issues in Iraq."
Higher disposable income, favourable commodity prices and expansions are expected to yield strong YoY profit growth of the region's Consumer sector.
On the "Logistics and Transportation" sector the analysts expect slowdown in YoY growth for Aramex on reduction in business from the Oil & Gas related services. Recent acquisitions are still to provide growth momentum in the sector.
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