Bahrain-listed firms’ net profits decrease

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Listed companies in Bahrain saw their quarterly profits take a hit as part of a wider GCC trend that saw earnings dragged down by the energy and materials sectors.

Analysis by Kuwait-based Kamco Invest shows that total Q3-2022 net profits of Bahrain Bourse companies decreased by 44 per cent year-on-year (YoY) to $405.5 million after six of its 13 sectors led by the two largest sectors by market cap posted a decrease in earnings during the quarter.

The banking sector reported the biggest Q3-2022 aggregate profits among the sectors in the exchange.

In the sector, Q3-2022 net profit of Al Ahli United Bank decreased by 99.1pc YoY to $1.3m against $152.1m in Q3-2021 dragging down the aggregate profits of the banking sector.

The fall in the bank’s quarterly earnings was mainly due to higher provisions.

Arab Banking Corporation (Bank ABC) posted the largest Q3-2022 net profit among banks at $44m as against $25m in Q3-2021.

Bank ABC’s strong quarterly performance was driven by higher net interest income underpinned by the rise interest rates and a fall in impairment charges.

Meanwhile, Q3-2022 net profit for NBB fell 25.6pc YoY to $30.2m as compared with $40.6m in Q3-2021.

The decrease was attributed to higher provisions in Q3-2022 following the termination of the loan deferral programme.

In the diversified financials sector, total Q3-2022 net profit amounted to $38.7m, up 20.8pc YoY from $32m in Q3-2021.

Net profit of United Gulf Investment Corporation jumped 161.5pc to $15.7m as compared to $6m in Q3-2021.

Meanwhile, GFH Financial Group posted the largest Q3-2022 net profit in the sector with $24m against $23.3m in Q3-2021.

On the other hand, aggregate net profits for the insurance sector plunged by 36.8pc during the quarter after three out of the five companies in the sector reported YoY net profit decreases.

Bahrain National Holding saw its net profit fall by 45.6pc from $5.4m in Q3-2021 to $2.9m in Q3-2022.

Similarly, Arab Insurance Group’s Q3-2022 net earnings slumped 59.6pc to $2.4m from $6m in Q3-2021.

The insurer’s fall in profit was attributed to lower investment income.

Alba, the only company in the materials sector, reported Q3-2022 net profits of $127.1 million registering 61.9pc YoY decrease from Q3-2021 net earnings which stood at $334.1m.

The smelter’s quarterly profit was mainly affected by lower LME prices.

Zooming out to the GCC region as a whole shows that quarterly profits of listed companies recorded a quarter-on-quarter (QoQ) decline of 8pc or $6.1 billion during Q3-2022, after reaching a record during Q2-2022.

The declines were also reflected in the respective sectoral indices with the Bloomberg Global Basic Materials Index declining by 10.5pc during Q3-2022 while crude oil prices dropped by 23.4pc during the quarter.

However, higher profits mainly for the food, beverage and tobacco, capital goods and utilities sectors partially offset the overall decline.

Only UAE-listed companies showed higher profits during the quarter, whereas aggregates for the rest of the GCC countries showed a QoQ decline during Q3-2022.