The earnings of Kuwaiti listed companies for the first nine months surged 14 per cent to hit KD1.16 billion ($4.09 billion) when compared to the same period last year, said a report.

The financial results of Kuwaiti listed companies point to an improvement in the health of Kuwait’s corporates. Growth during the first nine months of 2013 continued to be driven by better results in both financial services and the real estate sector, according to the National Bank of Kuwait.

Both had been hit severely by the financial crisis and have since made notable recoveries, the NBK report added.

The reported earnings of the 170 companies listed on the Kuwait Stock Exchange (KSE) grew at a solid pace over the year before. Most of the growth came from a drop in total losses reported by companies that continued to suffer the consequences of the 2009 economic slowdown, said the country's top lender.

The number of companies reporting losses and their aggregate losses continued to shrink. Only 26 companies reported that they were in the red this year compared to 48 during the same period last year. The aggregate losses reported by these companies shrank more dramatically, from KD148 million last year to only KD25 million this year, said the report.

According to NBK, the bottom-line growth of profitable companies was less impressive. "Companies that reported positive profits both last year and this year saw profits shrink by 2 per cent on declining telecoms and bank profits. Other sectors saw growth in earnings," said the lender.

"This was also visible in the drop in the profits of the KSE15 index by 4.4 per cent. Nevertheless, banking and telecoms remain the largest contributors to total profits," it stated.

The financial services reported profits of KD107 million, more than double what was reported last year. Nevertheless, it remains the sector with the largest number of loss-making companies.

Around a third of the sector’s companies have yet to announce their results while some have been delisted from the exchange after cumulative losses reached 75 per cent of their capital, said the Kuwaiti lender.
 
"Real estate companies seem to have recovered well and aggregate profits for the sector almost doubled compared to the same period last year. The pickup in company profits mirrors the recovery we have seen in Kuwait’s real estate sector in general, particularly in residential and investment property," stated NBK in its report.

Companies in the consumer goods and consumer services sectors also saw decent increases in profits thanks to a healthy consumer sector. Still, these two sectors remain relatively small and have little noticeable impact on the aggregates, it said.

The Kuwaiti bank pointed out that the equity prices were mostly flat in response to reported results, dragged down by the less impressive results in the dominant sectors.

"The value-weighted index was little changed during the reporting period. The telecommunication index was off 5 per cent. Meanwhile, the financial services index was up a strong 4 per cent buoyed by the stronger results there," he added.-TradeArabia News Service