MSX-listed firms post over $466mn total net profits

Business Sunday 11/June/2023 16:06 PM
By: Times News Service
MSX-listed firms post over $466mn total net profits

Muscat: Total net profits of MSX-listed companies in Oman increased by 17.4 percent in the first quarter of 2023 to reach $466.4 million compared to $397.2 million in the first quarter of 2022, according to a new report.

This was on the back of higher profits of the banking, telecom, and diversified financial sectors during the first quarter, the Kuwait-based investment, strategy and research firm Kamco Invest said in its GCC Corporate Earnings Report: Q1-2023 report.

The banking sector witnessed net profits growth of 19.4 percent to reach $290.9 million in the first quarter of 2023, up from $243.6 million in the first quarter of 20211. In the banking sector, seven out of the eight constituents reported growth in their net earnings while Ahli Bank reported a 26.2 percent decline in profits that reached $14.4 million during the first quarter (Q1) 2023. HSBC Oman led the banks in terms of absolute growth in year-on-year (y-o-y) profits that reached $31.7 million against $14.0 million. Comparatively, NBO reported the largest absolute profits among the banks in the sector at $37.3 million up from $26.6 million in Q1-2022. HSBC Oman’s quarterly profit growth was primarily driven by a 42.8 percent growth in net operating income and lower operating expenses. NBO’s strong performance was induced by increasing net interest income and decreasing net impairment.

Total Q1-2023 net profits of the telecoms sector increased by 4.4 percent year-on-year (y-o-y) to reach $62.3 million in Q1-2023 as compared to $59.6 million in Q1-2022. Omantel posted a net profit of $55.1 million in Q1-2023 recording a 14.6 percent y-o-y growth from $48.0 million in Q1-2022. Omantel’s improved quarterly net profit was attributed to an increase in gross margins in the retail and wholesale segment, a decrease in finance costs and an increase in dividend income from the Zain group. On the other hand, Q1-2023 net earnings for Ooredoo Oman fell 38 percent y-o-y to $7.2 million.

In the food, beverage and tobacco sector, aggregate Q1-2023 reached $6.8 million in Q1-2023 as compared to $0.2 million in Q1-2022. The profits jump was mainly due to the return to profitability of Salalah Mills and A’Saffa Food Company. Q1-2023 net profits of Salalah Mills reached $1.1 million bouncing back from a loss of $0.3 million whereas A’Saffa Food Company bounced back from a loss of $1.2 million in Q1-2022 to a net profit of $2 million in Q1-2023.

Oman’s utilities sector was the only sector with total net losses during Q1-2023 after four out of the eight companies in the sector reported net losses during the period. Phoenix Power recorded the biggest net loss during the quarter at $11.5 million in Q1-2023 as compared to a $11.1 million loss in the corresponding quarter of the previous year. ACWA Power Barka was the only one of the four power companies in the sector which recorded a profit during Q1-2023 with $0.61 million in net profits up from $0.4 million in Q1-2022.

GCC-listed companies
The Kamco Invest report further said that quarterly profits reported by GCC-listed companies declined y-o-y during Q1-2023 mainly led by a fall in energy and commodity prices. Most commodity prices witnessed a demand-led decline during the quarter that was reflected in the biggest q-o-q drop in the Bloomberg Commodity index since the pandemic during Q1-2023 (-6.5 percent).

A fall in profits for the Diversified Financials sector was also reflected in lower profits during the quarter after the MSCI GCC index declined for four quarters in a row. That said, aggregate GCC profits showed the first q-o-q growth in Q1-2023 after two consecutive quarters of declines during the previous two quarters.

Aggregate net profit for GCC-listed companies reached $61.5 billion during Q1-2023 as compared to $57.0 billion during Q4-2022 resulting in a q-o-q growth of 7.9 percent. The y-o-y performance showed a decline of 9.1 percent when compared to Q1-2022 profits of $67.9 billion, which was the second-biggest profit on record for the GCC markets.

Energy, materials and diversified financials were the top three sectors by absolute y-o-y profit decline against Q1-2022 as these sectors accounted for 56 percent of total profits during Q1-2023 as compared to 70 percent of profits during Q1-2022. In terms of q-o-q performance, the profit growth was led by higher profits for the Banks and Utilities sectors that were partially offset by a drop in profits mainly for the Energy, Capital Goods and Materials sectors.

In terms of regional trends, the q-o-q profit growth was seen across the GCC exchanges during the quarter, barring Saudi Arabia. Aggregated profits for the Kingdom reached $38.9 billion during Q1-2023 as compared to $40.6 billion during Q4-2022, a decline of 4.2 percent mainly led by a fall in profits for energy, materials and utility sectors. On the other hand, Qatari companies reported the biggest profit growth of 65.9 percent followed by Dubai-listed companies with q-o-q profit growth of 43.7 percent.