By Satish Kanady
DOHA: GCC companies’ aggregate second quarter (Q2, 16) profits are expected to decline 10 percent year-on-year, led by 40 percent fall in the petrochemical sector. While the banks expect a modest quarter across the region, real estate sector is likely to witness a weaker performance from the hospitality divisions, Investment Bank SICO “GCC Equities-Quarterly Result Preview’ noted yesterday.
The SICO, which covered 58 blue chip companies in the GCC, including six in Qatar, said the net interest margin (NIM) will weigh on the second quarter performance of GCC banks. Commercial Bank of Qatar, Doha Bank, QIB and QNB are the Qatar-based banks covered by the SICO.
During the second quarter, QNB is expected to benefit from Finsbank consolidation.
QIB’s strong lending book growth is expected to continue, while Doha Bank’s higher fee income and NIM will support its earnings.
On the petrochemicals sector, the report noted: “On an aggregate, we forecast earnings to decline 40 percent YoY led by lower product prices and rising feedstock cost after lifting of energy subsidies. Real estate sector expect weaker performance from the hospitality divisions. Low single digit growth in operating profit is expected on YoY basis.
Lower urea, steel and commodity chemical prices are expected to impact the earnings of Industries Qatar (IQ).
Lower product prices across the board and shutdown are likely to impact the earnings of Saudi Arabia’s Petrochem.
The region’s telecom sector’s YoY earning is expected to boost in sector from Ooredoo Qatar and Etisalat. Forex impact is expected to be lower for Etisalat while positive for Ooredoo. Ooredoo is to benefit YoY from strength in Myanmar kyat and Indonesian rupiah, leading to forex gain on YoY basis.
Ooredoo’s net profit is projected to grow 36 percent on YoY. On the Etisalat’s Q2 performance, the SICO analysts noted that the devaluation of Egyptian pound is likely to be offset by benefit from Euro weakness. Otherwise, performance will be in line with the first quarter.
The building materials sector is likely to expeerience steep YoY decline in earnings following weak demand, weak pricing power and higher costs.
“We expect RAK Ceramic to maintain its above industry peer earnings trend with a 2 percent YoY net income growth.”
Consumers sector is expecting a slowdown in discretionary sales and contraction in Saudi players’ margins as a result of lower subsidies. Abu Dhabi-based food and Beverages company Agthia is to report strong numbers driven by decent sales growth and improvement in margins.
On the Logistics and Transportation sector, the SICO analysts said Aramex will continue to benefit from organic growth in express segments as well as growth from acquisitions. Air Arabia is to have a weak quarter due to seasonality.
The GCC healthcare sector is expecting a YoY growth in Saudi Arabia’s Mouwasat and Dallah earnings over Q2, 15 driven by additional capacity. Slump in aluminium and fertiliser prices is to drive steep YoY decline in the earnings of industrials sector.
The Peninsula
By Satish Kanady
DOHA: GCC companies’ aggregate second quarter (Q2, 16) profits are expected to decline 10 percent year-on-year, led by 40 percent fall in the petrochemical sector. While the banks expect a modest quarter across the region, real estate sector is likely to witness a weaker performance from the hospitality divisions, Investment Bank SICO “GCC Equities-Quarterly Result Preview’ noted yesterday.
The SICO, which covered 58 blue chip companies in the GCC, including six in Qatar, said the net interest margin (NIM) will weigh on the second quarter performance of GCC banks. Commercial Bank of Qatar, Doha Bank, QIB and QNB are the Qatar-based banks covered by the SICO.
During the second quarter, QNB is expected to benefit from Finsbank consolidation.
QIB’s strong lending book growth is expected to continue, while Doha Bank’s higher fee income and NIM will support its earnings.
On the petrochemicals sector, the report noted: “On an aggregate, we forecast earnings to decline 40 percent YoY led by lower product prices and rising feedstock cost after lifting of energy subsidies. Real estate sector expect weaker performance from the hospitality divisions. Low single digit growth in operating profit is expected on YoY basis.
Lower urea, steel and commodity chemical prices are expected to impact the earnings of Industries Qatar (IQ).
Lower product prices across the board and shutdown are likely to impact the earnings of Saudi Arabia’s Petrochem.
The region’s telecom sector’s YoY earning is expected to boost in sector from Ooredoo Qatar and Etisalat. Forex impact is expected to be lower for Etisalat while positive for Ooredoo. Ooredoo is to benefit YoY from strength in Myanmar kyat and Indonesian rupiah, leading to forex gain on YoY basis.
Ooredoo’s net profit is projected to grow 36 percent on YoY. On the Etisalat’s Q2 performance, the SICO analysts noted that the devaluation of Egyptian pound is likely to be offset by benefit from Euro weakness. Otherwise, performance will be in line with the first quarter.
The building materials sector is likely to expeerience steep YoY decline in earnings following weak demand, weak pricing power and higher costs.
“We expect RAK Ceramic to maintain its above industry peer earnings trend with a 2 percent YoY net income growth.”
Consumers sector is expecting a slowdown in discretionary sales and contraction in Saudi players’ margins as a result of lower subsidies. Abu Dhabi-based food and Beverages company Agthia is to report strong numbers driven by decent sales growth and improvement in margins.
On the Logistics and Transportation sector, the SICO analysts said Aramex will continue to benefit from organic growth in express segments as well as growth from acquisitions. Air Arabia is to have a weak quarter due to seasonality.
The GCC healthcare sector is expecting a YoY growth in Saudi Arabia’s Mouwasat and Dallah earnings over Q2, 15 driven by additional capacity. Slump in aluminium and fertiliser prices is to drive steep YoY decline in the earnings of industrials sector.
The Peninsula
