By Satish Kanady
DOHA: The growth rate of Qatar’s listed companies’ earnings increased by 9.7 percent year-on-year to reach $11.2bn during 2013, compared to $10.2bn a year ago. Five of the total seven sectors posted gains in their earnings while two declined during year 2013.
The overall growth was led by heavyweight banks and financial services sector, which accounted for 42.4 percent of the consolidated earnings , registering a YoY growth of 6.3 percent. Growth in the banks and financial services sector was driven by 13.7 percent YoY growth in earnings of heavyweight Qatar National Bank (QNB) , accounting for 54.7 percent from the sector’s total earnings, due to strong growth in net interest and non-interest income in addition to the acquisition of Egypt-based NSGB (now known as ALAHLI).
Masraf Al Rayan followed with a 13 percent YoY increase, while Qatar Islamic Bank with a 4 .7 percent rise came next accounting for 7.5 percent, the Global Research’s GCC Earnings Review-2013, said yesterday.
The insurance sector also contributed significantly to the growth in the consolidated earnings with a robust 214.3 percent YoY increase in earnings. The sector contributed 7.5 percent to the total earnings of the QE listed companies. The Insurance sector was driven by Qatar General Insurance and Reinsurance which posted a 12.2x growth in its net profit. The rise was due to a 68-fold jump in fair value gains, reported at QR2.04bn.
Excluding the contribution of Qatar General Insurance and Reinsurance, the sector’s earnings increased by only 18.6 percent. However, the telecommunications sector posted a decline of 8.1 percent during 2013 due to Ooredoo as a result of foreign exchange losses. Industrial sector also witnessed a decline of 2 percent in its consolidated earnings due to 5.1 percent decline in the earnings of Industries Qatar driven by lower global fertiliser prices
Overall, the corporate earnings in the GCC rose by 12.4 percent YoY to $61.8bn in 2013, led by the UAE. The UAE posted a 21.3 percent increase, led overall earnings and contributed 4.4 percent to the incremental rise in earnings.
In a separate note issued yesterday, Investment Bank SICO said Qatari companies’ earnings are expected to decline 7 percent YoY for the first quarter of 2014 due to lower earnings forecast for telecom and industries sector.
The Boston Consulting Group (BCG) said yesterday that the revenues of banks in Qatar grew by 20 percent in 2013. “In 2013, loan loss provisions varied significantly. In particular, banks in Qatar and Kuwait had to build higher provisions due to increasing delinquencies”, BCG’s Reinhold Leichtfuss said.