Total net profits for companies listed on the Bahrain Bourse rose 6.5 per cent to $493.4 million in the first quarter of 2024, up from $463.2m in the same period last year.

A report by Kuwait-based Kamco Invest shows that nine out of 13 sectors on the exchange reported higher profits, while the remaining four saw declines. Banks, diversified financials, insurance, retailing and telecoms were among the key gainers.

The banking sector led the pack with a 36.6pc year-on-year jump in total Q1 net profits to $287m, compared with $210.1m a year earlier. This rise was driven in part by a 25pc increase in net profits for Bank ABC, which reached $75m in Q1 2024, up from $60m.

Bank ABC’s quarterly earnings growth stemmed from a 15pc rise in total operating income from its core business, combined with higher interest rates, lower operating expenses and cost of credit.

National Bank of Bahrain also saw its Q1 net profits climb 22.8pc year-on-year to $72.9m, from $59.4m. This growth was attributed to higher net interest income and gains from investments in securities and hedging activities.

The materials sector, however, witnessed a 48.5pc plunge in total net profits during Q1 2024, reaching $64.9m compared with $125.9m in the prior-year period. Alba, the sole constituent in the sector, blamed the decline on lower LME prices (down 8pc year-on-year in Q1 2024) coupled with a 27pc year-on-year drop in premiums during the same period.

The telecom sector reported a modest 2pc rise in aggregate profits to $52.7m in Q1 2024, compared with $51.7m in Q1 2023. Beyon led the way with Q1 net earnings of $49.9m, up 4.2pc year-on-year from $47.9m. Beyon’s moderate growth was attributed to its focus on expanding its regional footprint and product portfolio through acquisitions, while strengthening core services and infrastructure. Zain Bahrain, on the other hand, saw its net profits decline by 25.4pc year-on-year to $2.8m in Q1-2024.

Zooming out to a regional perspective, aggregate net profits for companies listed on GCC exchanges dropped to the second-lowest level in nine quarters during the first quarter of 2024, reaching $56.4 billion compared with $61.8bn in Q1-2023. The decline was primarily driven by falling profits in the energy, telecom and capital goods sectors. This was partially offset by gains in banks, food and beverage (F&B), and real estate companies.

Sequential growth remained positive, with a 2.6pc increase compared with Q4 2023. However, this was driven by the top three sectors (energy, telecom and capital goods), while real estate and F&B saw a decline. Notably, the materials sector showed improvement in profits during the quarter.

The energy sector witnessed the steepest year-on-year decline in Q1 2024, mainly due to lower volumes sold by companies. Despite a 2.2pc increase in average Brent crude prices to $82.9 per barrel compared with Q1 2023, the sector’s performance suffered.

GCC telecom sector profits declined 13.3pc year-on-year to $2.4bn in Q1 2024, led by significant profit drops for six out of 15 regional operators.

The GCC real estate sector witnessed a modest 3.6pc year-on-year rise in profits to reach $1.9bn in Q1 2024. While the trend at the country level remained mixed, companies in Abu Dhabi and Kuwait saw substantial year-on-year growth of 50.5pc and 23.4pc, respectively. Conversely, companies in Saudi Arabia and Bahrain reported declines.

On the other hand, healthy profits for the GCC banking sector helped mitigate the overall decline. Aggregate earnings surged 11.5pc year-on-year, reaching $14.5bn in Q1-2024. This translates to a $1.5bn increase compared with Q1 2023. Although quarter-on-quarter growth was modest at 0.6pc, all but three GCC markets reported healthy year-on-year growth in earnings.

This growth came despite a slight dip in net interest income. However, this was offset by higher interest income and lower operating expenses and impairments.

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