The
total earnings reached $12.8 billion were less than the profits posted
during the previous quarter (Q1, 2011) by 7 percent. In H1,2011, the GCC
corporate earnings had grown to $26.5 billion, an upswing of 5 percent
compared to $25.3 billion H1, 2010.Citing the possible reasons
behind the decline, Markaz report suggested that the corporate earnings
declined due to weak performance by the telecom sector in the region.
However, it added, banks and commodity companies continued to perform
strongly. "The region's continued dominance as a petrochemical hub,
global recovery, and spikes in commodity prices supported the
performance of companies across the region," the report said.Aggregate
net profits from the commodity sector were $3.4 billion (+54 percent
YoY, +4 percent QoQ). Among sectors, banking continued to deliver the
highest profits, at $5 billion. Robust demand and access to low cost
funds improved spreads in this quarter. Telecom sector registered 66
percent YoY decline in net income due to Zain's one time profit from
discontinued income reported in 2Q10. Excluding this one-time
adjustment, the sector's earnings fell by only 11 percent YoY. Real
estate sector recovered from the slump experienced last year and
reported a profit of $386 million in Q2, 2011, up 127 percent YoY.Saudi
Arabian companies posted a total profit of $12.7 billion during the
first half of 2011, an increase of 25 percent. The increase was due to
higher earnings reported during the Q2, 2011 by all the sectors across
the board. Earnings of Kuwaiti companies during the 1H11 were down 33
percent YoY to $2.9 billion. The decline in earnings was mainly due to
the decreased profits reported by the telecommunication sector in
Kuwait. UAE companies reported a profit of $5.2 billion during the half
year, an increase of 5 percent YoY. The surge in the banking sector
performance during the year supported the increased profits.Qatar
earnings during the first half of the year were $4.3 billion, almost
flat compared to the previous year. The banking and the commodities
sectors came up with good results during the year. However, the
performance of the telecommunication sector was disappointing. Oman's
corporate earnings declined 16 percent during the first half of the year
to $0.8 billion. The decrease in profit was mainly due to the low
profits reported by the banking and telecommunication sectors. On a
like-to-like basis, Bahrain's corporate reported a profit of $510
million in the first half of 2011, an increase of 5 percent. The
increase in profit was due to the improved results posted by the banking
sector in Bahrain.Earnings of Saudi Arabian companies totaled $6.9
billion, an increase of 28 percent YoY and 20 percent QoQ. Saudi Basic
Industries Corp. (SABIC), which reported $2.2 billion in Q2 profits, led
the growth, which was driven by higher volumes and prices. Al-Rajhi
Bank reported a net income of $491 million, up 4 percent. Saudi
Telecom's net profit increased 9 percent to $602 million. The increase
in net profit is mainly on account of higher sales and lower operating
expenses in this quarter.On a like-to-like basis, Bahrain's
corporate reported a profit of $270 million in Q2, 2011, an increase of
28 percent YoY and 13 percent QoQ. On like-to-like basis, banks
reported an earnings growth of 63 percent on YoY basis. Ahli United Bank
grew its earnings over the year by 20 percent to $84 million. Net
income of Bahrain Telecom suffered, declining 5 percent YoY, though
increasing by 22 percent on a QoQ basis.
