Muscat – After witnessing fast recovery in corporate earnings during the first and second quarters of this year, listed companies on the Muscat Stock Exchange (MSX) recorded slow growth in profits during the third quarter of 2021, mainly due to steep fall in earnings of telecom and utility sector companies.
Total net profits for listed companies in Oman grew by 3.02 per cent year-on-year to RO143.4mn in the third quarter of 2021 as compared with RO139.2mn in the third quarter of 2020, according to the GCC Corporate Earnings report released by Kuwait-based Kamco Investment.
Banks and some industrial sector companies mainly contributed to the overall year-on-year growth in net profits at the MSX-listed firms. However, telecom and utilities sectors reported a steep decline in earnings, Kamco Investment said.
Third quarter earnings of banking sector, the biggest sector in the MSX by market capitalisation, improved by 17.2 per cent to reach around RO79mn in the third quarter of this year compared to RO67mn in the third quarter of 2020.
As per Kamco Investment’s analysis, National Bank of Oman (NBO) posted the biggest increase in absolute profits within the banking sector during the third quarter. NBO’s net profits increased to RO7.8mn during the third quarter of this year compared to RO1.8mn in the same period of 2020.
Lower operating expenses and a decline in net impairment contributed to the growth in the bank’s earnings.
Oman’s telecom sector followed with the second largest total net profits of RO19.2mn during the third quarter of 2021, around 30 per cent down from RO27.3mn in the same period of 2020. The decline in telecom sector profits came after both Omantel and Ooredoo Oman posted a decline in net profits during the quarter, Kamco Investment said.
‘The COVID-19 pandemic has largely remained under control over the last few months with declining cases as well as due to a fast paced vaccination effort in the GCC. As a result, bulk of the economic sectors are back at pre-pandemic capacities barring a few that include tourism and hospitality sectors,’ Kamco Investment said.
GCC corporate earnings
Aggregate net profits reported by companies listed on the GCC exchanges reached a new record high during the third quarter of 2021 at US$55.5bn, an increase of 123.4 per cent year-on-year. Higher profitability reflected accelerated economic activity in the region, Kamco Investment said.
‘The increase reflected positive earnings growth across the seven exchanges with Kuwait leading during the quarter led by an aggregate net profit of US$5.6bn, an increase of almost six folds.
Profits for Saudi Arabia, Dubai and Bahraini firms also more than doubled during the quarter, whereas Omani firms reported only marginal growth of 3 per cent,’ the report said.
As per Kamco Investment, GCC corporate earnings for the first nine months of 2021 more than doubled to US$139.1bn as compared to US$65.6bn during the same period of 2020. The increase was mainly led by higher profits reported by Saudi Arabian companies with a net profit growth of 127.5 per cent to reach US$101bn in the first nine months of 2021 against US$44.4bn in the corresponding period of 2020. Listed companies in Abu Dhabi and Qatar reported total net profits of US$11.6bn and US$9.1bn, respectively.