Recovering from the impact of COVID-19 pandemic, the listed firms on the GCC bourses put up an impressive performance as was evident from the net profits they made in 2021.
These profits of the listed companies in the GCC region jumped to a record level reaching $196.5 billion in 2021 compared with $93.1 billion the previous year. Of the $103.4 billion profits, the share of Saudi Aramco was more than 50% ($56.1 billion or 113.8% year-on-year).
The other sectors which earned good profits were banking, materials and utilities. These four sectors accounted for 85% of the total net profit in 2021. Even transportation sector too recorded impressive growth in their net profits last year.
Of the 21 sectors, four witnessed YoY decline in profits whereas the rest reported growth. Among the bourse levels, Oman was the only market which reported a decline in aggregate net profits for listed companies during 2021 with a fall of 3.7%.
The banking sector witnessed a robust growth as its net profitability increased by 52.9% to reach $35.4 billion. Banking sector profits reached the highest mark since 2018. The YoY increase was broad-based across the GCC with profits for Kuwaiti banks almost doubled to $2.9 billion.
Saudi and UAE-listed banks also reported healthy profit growth of 59.5% and 67.2% respectively during the year. Higher profits also pushed the aggregate return on equity for the sector to a 7-quarter high level of 10.4% at the end of 2021 as compared to 9.6% in Q3-2021 and 8.1% at the end of 2020. The banking sector represented 18% of the total aggregate profits during 2021.
ADX Listed Firms
Companies listed on the Abu Dhabi Securities Exchange (ADX) recorded 67% YoY growth in their net profits in the Q4 of 2021, which reached $5.1 billion compared with $3.1 billion in the Q4 of 2020, which confirms an impressive performance in terms of Profits and listing of many shares in the stock exchange.
The five largest sectors in terms of market capitalization on the stock exchange recorded a growth in net profits in Q4 of 2021.
The profits of the banking sector increased by 52.3% to reach $1.7 billion, compared with $1.1 billion in Q4 of 2020. The telecommunications sector was followed by the second largest contributor to absolute profits at the stock exchange level, with a growth of 10.6% to reach $591.1 million, compared with $534.2 million in Q4 of 2020.
However, the transportation sector recorded the largest increase as profits for Q4 of 2021, which includes three companies such as Abu Dhabi Ports Group, amounted to $69.6 million, compared with a loss of $65.9 million for the same period in 2020.
The net profits of ADX listed companies increased with a growth of 76% to reach $17.6 billion, compared with $10 billion in 2020. The banking sector’s net profits for 2021 increased by 31.3% to reach $5.3 billion, compared with $4.1 billion in 2020. Nine of the 11 banks recorded growth in the net profit. The net profits of the telecom sector improved by 4.5% to reach $2.6 billion, compared with $2.5 billion in the previous fiscal.
Dubai Financial Market
Profits of companies listed on the Dubai Financial Market (DFM) gained again, with net profit reaching $1.9 billion in Q4 of 2021, compared with a loss of $57.4 million in Q4 of 2020.
DFM was the only bourse at GCC level that recovered from the decline recorded on a quarterly basis in Q4 of 2020.
Three of the five largest sectors in terms of market capitalization at the stock exchange level recorded a growth in net profit during Q4 of 2021, including the banking sector, the largest sectors stock market in terms of market capitalization.
The net profit of the banking sector amounted to $1.2 billion for Q4 of 2021, compared with a loss of $135.4 million in Q4 of 2020. Only two out of seven banks listed in the sector recorded losses during the quarter. Mashreq Bank return to make profits. Emirates NBD announced that it has achieved the largest net profit in Q4 of 2021 at the level of banks, with the bank’s profits reaching $547.8 million, compared with $313.4 million in Q4 of 2020.