DOHA: Qatari companies are expected to report lower year-on-year profits for the third quarter of 2013. As the profits of GCC companies are projected to grow 8.3 for 3Q13, the combined profit of Qatari companies is estimated to be down by 2.8 percent.
The Investment Bank SICO that analysed the performance of Qatar’s top 14 listed companies estimates profits of these companies to slip by 2.2 percent on quarter-on-quarter basis. The combined market capitalisation of these blue chip companies are expected to reach $103.9bn and the net income to reach $2.28 in third quarter this year, SICO’s “consensus estimate of GCC equities for 3Q13” report said yesterday.
Saudi companies’ Q3, 13 earnings are expected to grow the most followed by Omani companies. Saudi companies are expected to report 11.1 percent year-on-year higher profits led by banks, which are expected to witness double digit net profit growth. On a quarter-on-quarter level, Kuwaiti companies are expected to report higher profit growth followed by Saudi companies.
QNB, Masraf Al Rayan, Nakilat, Doha Bank, Gulf Warehousing, Qatar Electricity, Qatar National Cement and Qatar Navigation are the Qatari companies which are projected to grow on year-on-year basis.
The earnings of bellwether Industries Qatar (IQ) is expected to hit by weak urea prices. “Urea prices have softened over the past few months, primarily due to high Chinese exports. Benchmark urea price is currently trading at around $300/tonne, the lowest level since August 2010. Low urea prices have put pressure on IQ’s profit margins from fertilizer business, as earnings are highly leveraged to urea prices, amid a fixed cost structure… Urea and ammonia prices declined (11 percent Q-o-Q and 22 percent Y-o-Y) and (22 percent Q-o-Q and 36 percent Y-o-Y) respectively. Going forward, we forecast urea prices of $325/tonne in 4Q13 and $350/tonne for 2014”, SICO analyst Nitin Garg noted.
In an earlier report, SICO analysts noted Qatari banks are expected to report moderate balance sheet growth, with CBQ’s balance sheet getting a boost from its Turkish ‘Ahbanks’ acquisition consolidation.
In September 2013, all GCC markets except for Qatar and Oman witnessed a gain in market capitalisation.
The QE Index ended almost flat in September, declining 0.1 percent MoM after falling 0.9 percent MoM in August. In line with most other GCC markets, QE started the month on a negative note. The index came under severe pressure during the tail end of September.