Hit by the Covid-19 pandemic, earnings reported by GCC-listed companies declined to a five-year low to $91.3 billion in 2020 as compared to $150.5 billion during 2019, marking a 39.3% decrease, a report said.
The $ 59.2 billion decline came mainly on the back of decline in profits for Aramco (by $ 38.9 billion or 44.1% y-o-y) followed by banking, real estate and materials sectors, said Kamco Invest, a regional non-banking financial powerhouse headquartered in Kuwait, in its “GCC Corporate Earnings Report : FY-2020”.
The three sectors accounted for 85% of the decline in net profits for the year, when excluding net profits for Aramco.
Excluding the oil giant’s numbers, the decline in GCC net profits was relatively lower at 32.6%. The only sectors that showed noticeable increase in net profits during the year were utilities and food, beverage & tobacco sectors that remained resilient during the pandemic due to their defensive nature.
Out of the 21 sectors on the exchange, 12 sectors witnessed y-o-y decline in profits whereas gainers only reported marginal growth. At the exchange level, Abu Dhabi reported the smallest decline in profits during the year at 7.4% followed by Oman and Qatar with declines of 18.6% and 20.5%, respectively.
In terms of quarterly performance, net profits during Q4-2020 declined by 21.6% y-o-y to $ 25.0 billion as compared to $ 31.9 billion during Q4-19. In terms of sequential performance, profits were down marginally by 1.3% as compared to Q3-2020. The y-o-y decline in profits during Q4-2020 came as companies on five out of seven exchanges in the region reported decline in profits whereas Abu Dhabi and Bahrain-listed companies reported 28.5% and 9.5% increase in profits, respectively.
In terms of sectors, energy sector once again reported the biggest decline of $6.2 billion in net profits or 30.8% y-o-y followed by banks and real estate with profits declines of 23.8% and 94.9%, respectively. On the other hand, the utilities sector reported the biggest y-o-y growth in profits. – TradeArabia News Service
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