During 2012, GCC corporates posted a moderate growth over previous year, with overall earnings growth of 6% when compared to 2011. This is against our projection of 5% that we articulated in our November note. Total earnings came in at USD 55.2bn as against our earlier estimate of USD 54.97 for FY12. FY2012 earnings were driven by strong performance from Financial Services, Real Estate and Banks.
Aggregate Net Profits from the Commodity sector were USD 11.64bn, a decrease of 12% over 2011. Telecom continued to decrease in 2012 as well with a bottom-line drop of 3%. Among sectors doing well, Bank earnings rose 11% in 2012 to USD 22bn. Real Estate earnings increased by 58% to USD 2.92Bn. Financial Services earnings increased significantly to reach USD 1.37Bn from USD 307Mn a year ago.
Source: Thomson Reuters Eikon, Markaz Research
2012 EarningsGCC aggregate earnings growth of 6% is driven primarily by incremental earnings from Kuwait, UAE and Oman. U.A.E companies posted total profits of USD 12.16bn an increase of 25% over 2011. Kuwait companies recorded a profit of USD 4.86Bn an increase of 22% over 2011.Oman companies gained 18% and recorded USD 1.65Bn. Bahrain and Qatar both recorded negative earnings growth. Financial Services, Real Estate and banks were among the sectors doing well.
Kuwait lags other countries in terms of visibility, with only 52% of the companies (representing 88% of total market cap) reporting numbers as of last week of March.
Source: Reuters Eikon, Markaz Research
Overall earnings in 4Q12 decreased by 15% on a QoQ basis. However, on a YoY basis, the earnings increased significantly by 40%. All countries gained on a YoY basis. U.A.E and Bahrain were the biggest gainers with 214% and 202% respectively. Bahrain made a significant gain of 73% on a QoQ basis also. Saudi Arabia and Qatar declined 27% and 11% on a QoQ basis. Among sectors, except for Telecommunications, all sectors gained on a YoY basis. Construction and Conglomerates gained 76% and 71% respectively on a YoY basis. Except for Financial Services and Real Estate earnings of all sectors decreased on a QoQ basis. Telecommunications lost 33% on a QoQ basis.
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Kuwait Financial Centre K.P.S.C “Markaz”, with total assets under management of over KD903 million (USD 3.2 billion) as of December 31, 2012, was established in 1974 has become one of the leading asset management and investment banking institutions in the Arabian Gulf Region. Markaz was listed on the Kuwait Stock Exchange (KSE) in 1997.