Companies listed in the GCC markets registered record profits last year, achieving remarkable financial results that came in parallel with a significant improvement in post-pandemic economic activity, resulting in one of the best GDP growth rates in 2022.
A Gulf report issued on Wednesday showed that the industrial activity in the region, according to the PMI data, witnessed a consistent upward trend, especially in Saudi Arabia and the UAE, where the PMI remained above the growth level.
Growth in Qatar slowed down only during the second half of the year, at a time when continued credit growth by regional banks strengthened companies’ positions and prompted increased investment in business activities during the same year.
The Kuwait-based KAMCO Investment Company report said that the net profit of GCC-listed companies jumped to a record level of $273.3 billion in 2022, compared to $199 billion in 2021.
The report attributed the strong growth, which amounted to $74.2 billion (an increase of 37.3 percent), mainly to the significant jump in the profits of listed companies within the energy sector. Saudi Aramco led the way, by achieving $159.1 billion in profits in 2022, compared to $105.4 billion in 2021, with the rise in oil prices and the increase in sales volumes.
According to the KAMCO report, the banking sector boosted the increase in the consolidated profits of the listed companies, after it achieved a growth in the net profit by $8.7 billion to reach $44.4 billion, supported by an increase in net interest income, in light of raising interest rates at the fastest pace during the year at the global level.
The capital goods sector came in third place, according to the report, with sector profits growing by about $7.3 billion to reach $11.6 billion, mainly supported by the increase in annual profits of the two recently listed companies - the Multiplay Group and Alpha Abu Dhabi Holding.
According to the report, the financial performance of Gulf companies was positive on a quarterly basis, although it registered lower rates on an annual basis by 7.0 percent, while profits decreased compared to the third quarter of 2022 by 20.8 percent to reach $56.4 billion in the fourth quarter of 2022.
Quarterly revenue growth was supported by the increase in the profits of the capital goods, energy and banking sectors, which was offset by a decline in the profits of the basic materials sector by $3.2 billion due to the decrease in average selling prices that affected the profits of the petrochemical sector.
The report said that the profits recorded in the fourth quarter of 2022 declined on a quarterly basis at the level of five out of seven Gulf stock exchanges, with all of them recording double-digit declines, while Omani companies recorded the largest decrease during the quarter, down 63.8 percent.
