Friday 27 / December / 2024
Muscat: Total net profits for Muscat Securities Exchange (MSX) listed companies in Oman declined by 3.5 percent year-on-year to $491.5 million in the second quarter (Q2) of 2023 compared to 509.3 million in the corresponding quarter in 2022, according to a new report.
“Total Q2-2023 earnings of the banking sector, the biggest sector in the exchange by market cap, dropped by 7.2 percent to reach $256.7 million down from $276.5 million in Q2-2022,” Kamco Invest said in its GCC Corporate Earnings Report : Q2-2023 August 2023.
The utilities sector followed with the second largest total net profits of $99.2 million during Q2-2023 as compared to $92.5 million in Q2-2022 recording a 7.3 percent year-on-year (y-o-y) growth. Bank Muscat posted the biggest profits within the banking sector during Q
2-2023 at $107.9 million as compared to $132.4 million during Q2-2022.
Sohar Bank and HSBC Bank Oman followed with $27.0 million and $25.7 million in net profits during Q2-2023. It is noteworthy that these two banks have recently completed their successful merger as a single entity.
The profit growth for the utilities sector came on the back of higher profits reported by five out of the seven companies in the sector. Phoenix Power Company lead the way reporting 5.4 percent y-o-y growth in its Q2-2023 net profits that reached $37.8 million followed closely by Al Suwadi Power Company and Al Batinah Power Company which posted Q2-2023 net profits that reached $22.4 million and $21.5 million, respectively. Phoenix Power attributed the surge in its quarterly earnings to increased revenue underpinned by the growth of net power exported from 4,131 GW hrs during 1H-2022 to 4,379 Gw hrs during 1H-2023.
Total net profits for the Telecom Sector declined by 4.9 percent to $52.6 million during Q2-2023 as compared to $55.3 million during Q2-2022 despite witnessing a 7.1 percent profits surge reported by OmanTel during the period. OmanTel’s growth in quarterly profits was attributed to higher revenue, including revenue from the acquired business of Zain Group. The telco’s revenue growth also included double-digit growth in wholesale transit voice and device revenue. On the other hand, Q2-2023 net profits for Ooredoo Oman reached $7.8 million as compared to $13.5 million during the corresponding period of the past year dragging down the total quarterly profits of the sector.
Total Q2-2023 net profits for the diversified financials sector reached $31.3 million as compared to $30.8 million in Q2-2022 witnessing a 1.7 percent y-o-y growth.
Furthermore, total Q2-2023 net earnings for the capital goods sector recorded a 29.6 percent jump to reach $15.3 million as compared to $11.8 million during Q2-2023. Meanwhile, the consumer services sector recorded a total net loss of $2.1 million during Q2-2023 after each one of all the four companies that comprised the sector reported Q2-2023 net losses during the quarter.
GCC-listed firms
The quarterly profits reported by Gulf Cooperation Council (GCC) listed companies once again showed a y-o-y decline during Q2-2023 mainly led by a fall in energy and commodity prices, the Kamco Invest said in its latest report.
Most global commodity prices witnessed a decline during the quarter that was also reflected in the slide in the Bloomberg Commodity index by around 15 percent since last year. A fall in profits for the retail and capital goods sectors also added to the decline while profits for the utilities sector was affected by higher financing costs as declared by the two biggest players in the sector.
On the other hand, banking sector profits remained resilient, registering healthy q-o-q and y-o-y growth as lending grew unabated despite higher interest rates. The telecom sector also showed higher y-o-y profits as did real estate and F&B sectors during Q2-2023. Aggregate net profit for GCC-listed companies reached $57.9 billion during Q2-2023 as compared to $61.7 billion during Q1-2023 resulting in a q-o-q decline of 6.2 percent.
The y-o-y performance showed a steeper decline of 26.6 percent when compared to Q2-2022 profits of $78.8 billion, which was one of the biggest profits on record for the GCC markets. Energy, materials and capital goods were the top three sectors by absolute y-o-y profit decline against Q2-2022 as these sectors accounted for 58 percent of total profits during Q2-2023 as compared to 73.8 percent of profits during Q2-2022.
In terms of q-o-q performance, the decline in profit was led by a fall in profits for the energy, capital goods and real estate sectors that was partially offset by higher profits mainly for the utilities, F&B and banking sectors
.
In terms of regional trend, profits mostly declined in the region with five out of seven country averages showing a y-o-y fall in profits. Saudi Arabia and Qatar companies showed the biggest declines during Q2-2023 while growth in Dubai and Kuwait aggregates partially offset the overall decline. Profits for Saudi-listed companies fell to an eight-quarter low level during the quarter.
