General and administrative expenses consumed 45 percent of the profits of the 159 listed companies on Saudi stock market (Tadawul) in the second quarter of the current year, according to a recently released financial report.

The report, prepared by Al-Eqtisadiah daily, said the volume of general and administrative expenses (GAEs) increased by 2 percent or SR215 million, during the second quarter of 2013, to reach SR11.6 billion compared to SR11.4 billion in Q2, 2012.

Normally, GAEs encompass a variety of expenses associated with performing the daily operations in a company and not related to the production of any goods or services. They include rent, utilities, insurance and managerial salaries.

According to the report, the consolidated profits of the listed companies rose by 4 percent to reach SR25.7 billion compared to SR24.6 billion in the compared periods.

The report said GAEs in three sectors out of 15 market sectors are exceeding their net profits at larger rates. The insurance sector is the striking example of this case where the rate of GAEs stood at 3,861 percent of the overall profits of the sector during Q2, 2013, the report said. The insurance sector reportedly incurred a loss of SR29 million in the second quarter.

The overall GAEs in the insurance sector stood at more than SR1.1 billion during the second quarter compared to SR1 billion in the second quarter of last year, or an increase of 11 percent, the report said.

Media and publishing sector topped second among the highest expending sectors in terms of GAEs where their rate stood at 234 percent of the sector’s total profits, the report said. The volume of GAEs reached SR85 million in the second quarter compared to the sector’s net profits of SR36 million.

The rate of GAEs in the building and construction sector stood at 154 percent to their profits, or SR354 million compared to profits of SR230 million, the report said.

Meanwhile, the rate of GAEs in the highly capitalized listed companies, headed by the petrochemical sector, stood at 48 percent, followed by banking and financial services (47 percent), and telecom and IT (42 percent).

Energy and utility, and cement sectors were the least expending sectors where the rate of GAEs to their net profits stood at 6 percent, the report said.

According to the report, the rate of GAEs in 28 listed companies exceeded their profits.

The GAEs of the Middle East Specialized Cables Co. (MESC) touched SR10 million compared to its profits of SR17,000, or 60,000 times, in the second quarter of the current year. Likewise, the rate of GAEs in Methanol Chemical Company (Chemanol), categorized in the petrochemical sector, exceeded its profits by 17,000 times, the report said.

Two insurance companies — Al-Ahlia for Cooperative Insurance Company and Arabian Shield Insurance Company — were among the firms with the highest rates of GAEs to their profits at nearly 6,000 times, the report added.