UAE firms outperform GCC peers with over 50% jump in Q1 profit

Gulf companies’ profits fall on lower commodity prices

Issac John

Published: Tue 13 Jun 2023, 5:10 PM

Last updated: Tue 13 Jun 2023, 5:48 PM

Listed companies in Dubai and Abu Dhabi recorded more than 50 per cent jump in net profits year-on-year in the first quarter of 2023, outperforming their GCC peers, whose quarterly profits declined on the back of a fall in energy and commodity prices.

Net profits for Dubai-listed companies jumped 51.2 per cent to reach $4.8 billion in the first quarter of 2023 compared to $3.2 billion in the same 2022 period, primarily driven by earnings growth in the banking, real estate and capital goods sectors, Kamco Invest said in its GCC Corporate Earnings Report Q1-2023.

In Abu Dhabi, listed companies witnessed a 51.8 per cent year-on-year increase in net profits during Q1-2023 to reach $11.1 billion compared with $7.3 billion during Q1-2022, according to the research report authored by Junaid Ansari, head of Investment Strategy & Research and Mohamed Ali Omar, associate at Kamco Invest.

Total net profits for Dubai’s banking sector soared 84.2 per cent in Q1-2023 to $ 2.8 billion as compared to $1.5 billion in Q1-2022. The sector’s rise in total earnings was primarily driven by Emirates NBD for the second consecutive quarter with 114.7 per cent jump in net earnings to $1.6 billion against $746.2 million in Q1-2022. The bank’s strong performance was attributed to its record-breaking quarterly performance in retail lending, said the report.

In Dubai’s real estate sector, aggregate Q1-2023 net earnings jumped 31.4 per cent to $1.2 billion as against $0.95 billion in Q1-2022. Emaar Properties’ Q1-2023 net profits of $872.9 million compared to $609.6 million in the first quarter of 2022 helped to lift the total earnings of the sector, Kamco said.

In Dubai’s utilities sector, total profits registered a marginal dip of 0.5 per cent to reach $248.0 million as compared to $249.3 million in Q1-2022.

The utilities sector in Abu Dhabi, comprising only one company — Abu Dhabi National Energy Co — topped the sector aggregate profits during Q1-2023 after reporting a net profit of $3.2 billion as compared to $536.6 million in Q1-2022. The banking sector followed witnessing a smaller year-on-year profit growth of 3.2 per cent in Q1-2023 that reached $2.2 billion, up from $2.1 billion in Q1-2022.

Across the GCC, aggregate net profit for listed companies showed a decline of 9.1 per cent to $61.5 billion during Q1-2023 as compared to Q1-2022 profits of $67.9 billion. “Energy, materials and diversified financials were the top three sectors by absolute year-on-year profit decline compared to Q1-2022 as these sectors accounted for 56 per cent of total profits during Q1-2023 as against 70 per cent of profits during Q1-2022. In terms of quarter-on-quarter performance, the growth in profit was led by higher profits for banks and utilities sectors that were partially offset by a drop in profits mainly for the energy, capital goods and materials sectors. In terms of regional trend, the quarter-on-quarter profit growth was seen across the GCC exchanges during the quarter, barring Saudi Arabia,” they said.