Hit by the Covid-19 pandemic, earnings reported by GCC-listed companies declined to a five-year low to $91.3 billion in 2020 as compared to $150.5 billion during 2019, marking a 39.3% decrease, a report said.

The  $ 59.2  billion  decline  came  mainly  on  the  back  of  decline  in  profits  for Aramco  (by  $ 38.9  billion  or  44.1%  y-o-y)  followed  by  banking,  real  estate  and  materials sectors, said Kamco Invest, a regional non-banking financial powerhouse headquartered in Kuwait, in its “GCC Corporate Earnings Report : FY-2020”.

The  three  sectors  accounted  for  85%  of  the  decline  in  net  profits  for  the  year, when  excluding  net  profits  for  Aramco.

Excluding the oil giant’s numbers, the decline in GCC net profits was relatively lower at 32.6%. The  only  sectors  that  showed  noticeable  increase  in  net  profits  during  the  year  were utilities  and  food,  beverage  &  tobacco  sectors  that  remained  resilient  during  the pandemic  due  to  their  defensive  nature.

Out of  the  21 sectors  on  the exchange,  12 sectors witnessed  y-o-y  decline  in  profits  whereas  gainers  only  reported  marginal  growth.  At  the exchange  level,  Abu  Dhabi  reported  the  smallest  decline  in  profits  during  the  year  at  7.4% followed by Oman and Qatar with declines of 18.6% and 20.5%, respectively.

In  terms  of  quarterly  performance,  net  profits  during  Q4-2020  declined  by  21.6%  y-o-y  to $ 25.0  billion  as  compared  to  $ 31.9  billion  during  Q4-19.  In  terms  of  sequential performance,  profits  were  down  marginally  by  1.3%  as  compared  to  Q3-2020. The y-o-y decline  in  profits  during  Q4-2020  came  as  companies  on  five  out  of  seven  exchanges  in  the region  reported  decline  in  profits  whereas  Abu  Dhabi  and  Bahrain-listed  companies  reported 28.5%  and  9.5%  increase in profits,  respectively.

In  terms of  sectors,  energy  sector  once  again reported the biggest decline of $6.2 billion in net profits or 30.8% y-o-y followed by banks and real  estate  with  profits  declines  of  23.8%  and  94.9%,  respectively.  On the other hand, the utilities sector reported the biggest y-o-y growth in profits. – TradeArabia News Service