MSX-listed firms combined net profit grows by 13%

Muscat: MSX-listed companies' combined net profit grew by 13 percent year-on-year during the first half of 2023, supported by the Financial and Industrial Sector companies, according to a new report.

“The combined net profit of MSX-listed companies grew by about 13 percent year-on-year during the first half of 2023 to about OMR369.70 million,” U Capital said in its 'MSX Net Profit Report-2Q23.”

On a sector basis, the Financial Sector showed a solid year-on-year (YoY) growth of about 14 percent while the Industrial Sector posted a 96 percent YoY growth in combined net profits of the companies compared to the first half of 2022 and supported the combined net profit of the stock market,” the report, released on Monday said.

The Industrial sector performance was led by the Electrical & Mechanical sub-sector performance (+140 percent YoY) and partial recovery in losses in the Cement (+213 percent YoY) and Mining (+81 percent YoY) subsectors. The Industrial sub-sector performance was partially weighed down by a significant drop in combined profits of the Food & Beverage sub-sector (-41 percent YoY), the report said.

The Services sector, saw a drop of 1.8 percent YoY in its combined net profit, led by the Telecom sub-sector and Oil & Gas marketing sub-sector.

The U Capital report further said that Omantel and a few more companies are yet to report their first half of 2023 results. “We exclude these companies from the first half of 2022 results as well for a like-to-like comparison,” it added.

The largest improvement in combined net profits for the first half of 2023 within the Financial Sector was witnessed by the Banking sub-sector (+18 percent YoY or OMR35 million). The Investment & Brokerage sub-sector contributed positively to sector profits (+21 percent YoY or OMR4.5 million). The banking and leasing sub-sectors saw a continued recovery in their combined net profits on the back of lower provision expenses this year as compared to last year, further supported by an increase in the operating income of most banks. The insurance sub-sector has shown some recovery in performance in the second quarter of 2023 after a dismal performance in the first quarter of 2023, the U Capital report said.

“However, despite the 44 percent YoY increase for the second quarter of 2023, the combined net profit of the insurance sub-sector fell (-64 percent YoY) on a 2023 first-half basis.

The banking sub-sectors combined net profits increased OMR35 million in the first half of 2023, followed by the Electrical & Mechanical sub-sector, whose combined net profits rose by OMR5.6 million to OMR9.5 billion during the first half of 2023.

The Insurance sub-sector posted a decline of OMR6.4 million in its combined net profits in the first half of 2023 as compared to the first half of 2022. “This is primarily due to the net profit declines reported by National Life & General Insurance, Al Madina Takaful, Oman Qatar Insurance, Muscat Insurance and Takaful Oman,” the report further added.
MSX’s combined net profit for the second quarter of 2023 rose by 9 percent YoY and 22 percent quarter-on-quarter in the second quarter of 2023 has been a mixed bag, with multiple sub-sectors witnessing recovery on year-on-year (YoY) during the second quarter of 2023, except for services. Overall, the combined net profit of MSX-listed companies rose by 9 percent YoY and 22 percent quarter-on-quarters, U Capital said in its report.