E-Paper
Sign In
iPhone | iPad
Android
Sun, Oct 13, 2024 | Rabi al-Thani 10, 1446 | DXB
°C
Dubai firms defy regional downtrend with 29% Q2 profit surge
Earnings growth mainly driven by banks, transportation and telecom companies
The Dubai Financial Market. Dubai-listed companies defied the regional downtrend by recording a remarkable surge in quarterly net profit. — File photo
Dubai-listed companies defied the regional downtrend by recording a remarkable surge in quarterly net profit as GCC-listed firms continued to show a year-on-year decline in Q2-2023, mainly driven by a fall in energy and commodity prices.
Companies listed in Dubai reported a 28.6 per cent year-on-year (Y-o-Y) profit growth to $5 billion in the second quarter, up from $3.9 billion in the same 2022 quarter. According to a Kamco Invest research report, earnings growth of Dubai corporates during the quarter were mainly driven by banks, transportation and telecom companies with the three sectors accounting for 65 per cent of the aggregate earnings in the exchange during the quarter. On the other hand, listed companies in Abu Dhabi witnessed a 3.4 per cent Y-o-Y dip in total net profits during Q2-2023 to $8.0 billion as compared to $8.2 billion during Q2-2022.
Recommended For You
In contrast, the aggregate net profit for GCC-listed companies fell to $57.9 billion in the second quarter from $61.7 billion in Q1-2023, resulting in a Q-o-Q decline of 6.2 per cent. The Y-o-Y performance showed a steeper decline of 26.6 per cent when compared to Q2-2022 profits of $78.8 billion, which was one of the biggest profits on record for the GCC markets, the Kamco report said.
“It is noteworthy that out of Dubai stock exchange’s (DFM) 12 sectors, seven have witnessed a Y-o-Y increase in profits during Q2-2023 while the remaining five sectors, including the insurance and consumer services sectors, reported declines,” said Junaid Ansari, head of Investment Strategy & Research at Kamco Invest.
Total net profits for the banking sector rose by $1.1 billion in Q2-2023 to reach $2.9 billion, up from $1.8 billion in Q2-2022. “The sector’s rise in total earnings was primarily driven by Emirates NBD’s 74.3 per cent profit jump during Q2-2023. The bank’s Q2- 2023 profits reached $1.7 billion compared with $ 952.9 million during the corresponding period of 2022, driven by a combination of higher margins and higher retail and corporate lending which led to an overall loan growth during the quarter,” the report said.
“Furthermore, the sector’s total earnings were supported by Mashreq Bank, which announced a Y-o-Y profit increase of 140.4 per cent to $519.1 million during Q2-2023. Mashreq Bank’s profits jump were attributed to growth in net interest income and income from Islamic financing, while a decline in provisions also supported the bottomline,” it said.
Combined profits for Dubai’s transport sector firms rose 26.7 per cent Y-o-Y in the second quarter to $208.3 million from $164.3 million in Q2 2022. Air Arabia drove most of the growth of the sector after the airline posted 187 per cent Y-o-Y Q2-2023 net profit jump, which reached $125 million as compared to $43.6 million in Q2-2022. Salik, the company that operates Dubai’s road toll system, recorded $74.2 million in profits in Q2 2023 as compared to $109.8 milliion in Q2-2022. Salik recorded the second biggest net profit among the companies in the transport sector despite witnessing 32.4 per cent y-o-y profit decrease during the quarter, the report said.
In the telecom sector, net profits for Emirates Integrated Telecommunications Company rose 31.2 per cent to reach $108.2 million to $ 82.4 million. “Overall growth in the telecom’s revenue (+6.7 per cent) especially, mobile service revenue and fixed service revenue (+10.9 per cent) as well as sustained customer demand contributed to the overall profitability of the telecom during Q2-2023,” Kamco report noted.
In Abu Dhabi, the banking sector witnessed an increase in net profits with aggregate sector profit of $2.3 billion as compared to $1.6 billion during Q2-2022, a Y-o-Y rise of $ 643.9 million or 39.8 per cent. The energy sector posted the second-largest net profits during Q2-2023, although it dropped by18.3 per cent to $1.8 billion from $2.2 billion during Q2-2022. Capital goods, materials and retailing sectors were some of the other sectors that reported decline in net profits during the quarter contributing to the overall drop in total profits in the Abu Dhabi Exchange
Sign Up For Breaking News Alerts
Be in the know. Get the latest breaking news delivered straight to your inbox.
