(MENAFN - Kuwait News Agency (KUNA)) First quarter of 2012, three months ending in March, witnessed an increase of profitability of GCC companies, according to a lengthy study released by Global Investment House on Monday.
Total net income of GCC companies for that period was USD 14.5 billion, a 12.9 percent increase over the March-2011 level of USD 12.9 billion.
The study covers 543 locally listed companies, in which 39 companies are from Bahrain, 160 from Kuwait, 65 from Oman, 41 from Qatar, 144 from Saudi Arabia, and 94 from UAE. It excludes those that have not reported financial results, dual listing companies and companies whose fiscal year does not end on 31st of December.
By country, all GCC stock markets managed to enhance their bottom lines by the end of March 2012, barring the Bahrain Bourse, with its corporate profitability declining by 0.9 percent year on year (YoY). The Kuwaiti market had the best performance amongst its regional peers, with its corporate profitability increasing by 40.6 percent YoY after excluding non recurring earnings of Wataniya of KD 265.5 million, recorded in first quarter (1Q) of 2011, due to a revaluation of the existing held interest in Tunisiana, following increase in the shareholding from 50 percent to 75 percent.
By sector, 1Q 2012 aggregate net profits for GCC Banking sector increased by 9.9 percent YoY. Insurance sector was also a notable gainer, with its aggregate net profit increasing by 34.7 percent YoY by the end of 1Q 2012.
On the negative side, aggregate net profit of GCC services stocks retreated marginally by 0.2 percent YoY, as it dropped from USD 445 mn in 1Q 2011 to USD 444.3 mn in 1Q 2012.
As to GCC markets' profitability by sector, profitability of Bahraini listed stocks declined marginally by 0.9 percent by the end of 1Q 2012, as compared to the corresponding period of the previous year. Aggregate corporate profits announced by Bahraini companies stood at USD 560.3 mn in 1Q 2012, down from USD 565.5 mn in 1Q 2011.
In Kuwait, a total of 160 Kuwaiti companies announced their 1Q 2012 financial results, (excluding 13 dual listing companies), 12 companies with fiscal year not ending on December 31, and 19 companies whose shares are suspended from trading, with exclusion of results the KD 265.5 mn, one off profits of National Mobile Telecommunications Company (NMTC) in the 1Q 2011 to draw a fair comparison between the Kuwaiti companies.
Aggregate net profit of listed Kuwaiti companies for 1Q 2012 stood at USD 1.34 bn, up by 40.6 percent YoY, compared to USD 0.96 bn net profit for the corresponding period of last year.
Banking Sector accounted for 41.2 percent of the total net profit of the 12 sectors' profit. Aggregate net profit of the nine local banks (excluding three dual listing banks) stood at USD 554 mn in 1Q 2012, registering 1.4 percent decrease compared to USD 561.9 mn recorded in 1Q 2011.
Total banking shareholders' equity rose by 4.8 percent in 1Q 2012, amounting to USD 22.1 bn. While, sector's total assets improved by 7.2 percent compared to the 1Q 2011, amounting to USD 182.1 bn. Five out of the nine listed Kuwaiti banks witnessed an increase in their profitability, led by Burgan Bank, with a net profit amounting to USD 63.1 mn.
The bank posted a good set of results and exceeded our estimates and Bloomberg Consensus Estimates for the quarter, most likely on reduced levels of provisions. The growth in loans and deposits was exceptionally high and therefore a definite plus. National Bank Of Kuwait (NBK) posted USD 291.3 mn in net profit in 1Q 2012, as opposed to a net profit of USD 290.4 mn in 1Q 2011. NBK's results were closely in line with our expectations and therefore void of any surprises with the exception of deposit growth which was starkly high.
Excluding the aforementioned non recurring earnings of Wataniya in 1Q 2011, the Telecommunications sector's net profit would stand at USD 356.9 mn in 1Q 2012, up by 7.2 percent YoY. As for Kuwait's first telecom operator, Zain Group, generated consolidated revenues of USD 1.172 bn, reflecting a one percent increase over the same period of 1Q 2011. The net income has witnessed an increase of two percent year-on-year to reach USD 255.1 mn.
National Mobile Telecommunications Company (Wataniya), consolidated Net Profit stood at USD 102.3 mn, compared to Net Profit for the same period in 2011 of USD 1.0 bn. Net Profit for 1Q 2011 includes a fair value gain of USD 959.3 mn recorded due to revaluation of existing held interest in Tunisiana following the increase in the shareholding from 50 percent to 75 percent. The Net Profit in 1Q 2011 without the fair value gain was USD 70.8 mn, an increase of 44.2 percent over 1Q2011.
The Real Estate sector had the best performance amongst all the market sectors in terms of its net profit growth. By the end of the first quarter of the year 2012, the sector's net profit stood at USD 119.7 mn, up from USD 18.
12 mn in 1Q 2011. United Real Estate Company's 1Q 2012 net profit took a big step and rose by 1,110 percent, reaching USD 54.6 mn, compared to USD 4.5 mn in 1Q 2011. As for the sector's heavy-weight, Mabanee Company, it reported a net profit amounting to USD 21.6 mn in 1Q 2012, up by 4.2 percent YoY.