Bahrain-listed companies’ net profits fell by 58 per cent year-on-year (y-o-y) in Q2-2023, dragged down by declines in the materials, banking, and diversified financials sectors.

Analysis by Kuwait-based Kamco Invest shows that the materials sector reported the biggest quarterly decline in profits at Bahrain Bourse (BHB).

Alba, the only company in the materials sector, reported Q2-2023 net profit of $79.3 million registering 83.6pc y-o-y decrease from its Q2-2022 net earnings which stood at $482.6m.

The smelter’s quarterly profits decline was mainly driven by lower LME and premia prices, which declined by 61pc y-o-y.

Total Q2-2023 net profits for the kingdom’s banking sector dropped 45.4pc y-o-y to $210.1m as compared to $385m during Q2-2022.

The Arab Banking Corporation (Bank ABC) led the way in the sector recording a 56.4pc jump in net profit during the quarter to $61m, the biggest in the sector, against $39m during Q2-2022.

Bank ABC’s profits growth was mainly attributed to growth in the bank’s diversified businesses as well as rising interest rates.

On the other hand, second quarter net profits for National Bank of Bahrain fell 8pc y-o-y to $48.8m against $53m during the corresponding quarter of 2022.

The bank credited the drop in quarterly profits to lower realised gains from the sale of investment securities during the year.

Total Q2-2023 net profits of the telecom sector remained almost flat, recording a marginal dip of 0.1pc y-o-y to $56.3m as compared to $56.3m during Q2-2022.

Profits for Beyon (Batelco) reached $52.8m, as compared with $53.1m in Q2-2022.

The telecom recorded higher quarterly operating profit (+13pc) as well as higher quarterly revenues (6pc) and higher quarterly EBITDA (5pc).

Moreover, Q2-2023 net profits of Zain Bahrain recorded 3.1pc y-o-y growth to $3.5m against $3.4m in Q2-2023.

In the diversified financials sector, total Q2-2023 net profit reached $22.7m registering 46.1pc y-o-y decline from $42.2m in Q2-2022.

The Q2-2023 net loss recorded by Bahrain Commercial Facilities Company at $11.7m dragged down the total profits of the sector.

The company’s profitability was mainly impacted by the combination of lower net interest income and higher net allowance on loans and receivables charged during the current period.

On the other hand, Q2-2023 net profit for the GFH Financial Group increased by 32.8pc to $30.6m as compared to $23.1m during Q2-2022 which help partly offset the overall decline in profits for the sector.

For the GCC region as a whole, quarterly profits reported by listed companies once again showed a y-o-y decline during Q2-2023 mainly led by a fall in energy and commodity prices.

Aggregate net profit for GCC-listed companies reached $57.9bn during Q2-2023 as compared to $61.7bn during Q1-2023 resulting in a q-o-q decline of 6.2pc.

The y-o-y performance showed a steeper decline of 26.6pc when compared to Q2-2022 profits of $78.8bn, which was one of the biggest profits on record for the GCC markets.

Energy, materials and capital goods were the top three sectors by absolute y-o-y profit decline vs Q2-2022 as these sectors accounted for 58pc of total profits during Q2-2023 as compared to 73.8 per cent of profits during Q2-2022.

In terms of q-o-q performance, the decline in profit was led by a fall in profits for the energy, capital goods and real estate sectors that was partially offset by a higher profits mainly for the utilities, F&B and banking sectors.

Decline in profits was a regional trend, with five out of seven country averages showing a y-o-y fall in profits.

Saudi Arabia and Qatari companies showed the biggest declines during Q2-2023 while growth in Dubai and Kuwaiti aggregates partially offset the overall slump.

Profits for Saudi-listed companies fell to an eight-quarter low level during the quarter.


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