Satish Kanady
DOHA: Qatar’s listed companies recorded better-than-expected profits during the second quarter of 2014 (Q2, 14), but saw a nince percent year-on-year (YoY) fall.
The SICO Investment Bank in its ‘GCC Equities - Q2, 14 snapshot’ issued yesterday noted Qatari companies’ Q2, 14 aggregate profits were QR100m higher than estimates. Ooredoo reported earnings of QR817m vs forecast QR583m. QNB’s profits reached QR2.6bn, higher than analysts’ estimates by QR119m.
Industries Qatar (IQ) missed analysts’ profit estimate by QR346m due to weaker urea prices and higher than expected impact from planned shutdown.
Profits of GCC listed companies increased by 17 percent YoY to reach $17.7bn. Double digit YoY profit growth has witnessed across all countries except for Kuwait and Qatar. Kuwaiti companies’ profits increased seven percent YoY while Qatari companies saw a nine percent YoY fall in aggregate earnings.
Over half of the GCC listed companies reported higher-than-expected 2Q14 profits than analysts’ estimates.
Fifty two percent of Saudi companies’ earnings beat analysts’ estimate with earnings being her by SR2.9bn in absolute terms, as most banks, utilities and petrochemical companies beat estimates. Saudi Electricity reported net income of SR3.7bn in 2Q14 vs estimated SR1.6bn due to reversal of SR2.6bn of provisions; excluding which, the company would have missed analysts’ estimates and aggregate Q2, 14 Saudi companies’ profits would only be higher than forecasts by SR0.3bn.
In Q2, 14, the aggregate profits of the 477 listed GCC companies, increased by 17 percent YoY. Most sectors reported double digit growth except for petrochemical and transportation companies which witnessed single digit growth and insurance, real estate and packaging firms who reported YoY decline in earnings. Aggregate banks earnings increased 14 percent YoY led by higher trading gains.
Majority of banks, petrochemicals and telecom companies beat analysts’ estimates whereas majority of consumer and real estate stocks missed earnings’ forecasts. 67 percent of GCC telecom companies beat analysts’ estimates, followed by bank, and petrochemical companies.
Banks’ profits increased by 14 percent YoY led by strong earnings growth across, except for Al Rajhi and QNB. Most banks reported higher-than-expected trading gains which helped boost bottom line to a certain extent. QNB’s 2Q14 profit increased by a mere 2 percent YoY due to consolidation of NSGB’s first half earnings. Fifty five percent of the consumer companies reported lower than expected earnings and 50 percent of the real estate companies missed profit expectations primarily led by Saudi-based real estate companies.
The SICO report noted more than half of the companies in all GCC markets announced better-than-forecasted profits. Oman listed companies performed best among peers as 67 percent surprised investors with higher-than-expected profit, followed by UAE companies where 63 percent beat analysts’ forecasts. 50 percent of the Bahraini companies and 73 percent of the Kuwaiti companies missed estimates.
The Peninsula
