By Satish Kanady
DOHA: Over 51 percent of the GCC’s listed companies’ profits were lower than analysts’ estimates for the final quarter of 2015 (Q4, 15), while 31 percent beat their expectations. Of the 142 GCC companies’ profits forecasted by the SICO Investment Bank, most countries’ overall aggregate profits fell below analysts’ expectations except for the UAE.
In Qatar, where the SICO covered 15 listed companies, aggregate profit totalled QR 6.1bn, 15 percent lower than forecasted, mainly due to Industries Qatar’s (IQ) disappointing performance. IQ reported 4Q15 profit QR 0.6bn vs estimated profit of QR 1.1bn on the back of lower prices across all segments: Fertilisers, Petrochemicals and Steel. Also, CBQ missed estimates by due to higher provisioning charges and lower income from its associate (United Arab Bank).
Among the companies covered in Qatar, three beat analysts’ expectations and the profits of another three were in line with the expectations. Nine companies missed the consensus estimates. The majority of GCC companies missed consensus estimates in 4Q15. 60 percent of the Qatari companies were below estimates and 71 percent of Kuwaiti companies missed consensus.
In the UAE, 43 percent of the companies’ results were lower than expectations, whereas 39 percent reported above forecasted earnings. 47 percent of the Omani companies missed consensus estimates. 60 percent of the Bahraini companies reported lower than forecasted earnings, while 51 of Saudi companies reported lower than forecasts.
Overall, GCC companies reported a 16 percent year-on-year(YoY) decline in earnings, with all countries aggregate earnings decreasing on a YoY basis, except for UAE which saw 5 percent increase in its bottom line. Saudi based companies’ earnings declined by 15 percent YoY, mostly due to a fall in petrochemical companies profits as a result of lower prices. On the other hand, UAE reported 5 percent YoY growth in earnings as Etisalat’s 4Q,15 net income improved 22 percent YoY and Emirates NBD’s profit was 74 percent higher YoY. Eshraq losses narrowed to Dh2.5m net loss in 4Q15 vs Dh718m in 4Q,14, which contributed in offseting NBAD’s 25 percent YoY fall in earnings and UNB’s 55 percent decline in profits.
Petrochems and Telecoms missed consensus estimates the most in 4Q, 15. 69 percent of petrochemical companies reported lower than expected estimates led by higher operating expenses and lower prices. 75 percent of Telecoms reported disappointing results due to higher expenses, currency fluctuations and other impairments. On the other hand, 62 percent of Real Estate and Construction companies has beaten estimates. Overall, Real Estate companies’ aggregate profits dropped by 57 percent YoY. Telecom companies’ aggregate profit increased by 55 percent YoY in Q4. Building Material companies profit increased by 5 percent and Transportation companies’ earnings grew by 74 percent. Consumers’ total aggregate profit ended 5 percent higher on YoY. The Peninsula
