Quarterly profits reported by GCC-listed companies declined year-on-year (y-0-y) during the first quarter (Q1) of the year mainly led by a fall in energy and commodity prices, said Kuwait-based financial powerhouse Kamco in a new report.

Most commodity prices witnessed a demand-led decline during the quarter that was reflected in the biggest q-o-q drop in the Bloomberg Commodity index since the pandemic during Q1-2023 (-6.5%). A fall in profits for the Diversified Financials sector was also reflected in lower profits during the quarter after the MSCI GCC index declined for four quarters in a row. That said, aggregate GCC profits showed the first q-o-q growth in Q1-2023 after two consecutive quarters of declines during the previous two quarters.

Aggregate net profit for GCC-listed companies reached $61.5 billion during Q1-2023 as compared to $57.0 billion during Q4-2022 resulting in a q-o-q growth of 7.9%. The y-o-y performance showed a decline of 9.1% when compared to Q1-2022 profits of $67.9 billion, which was the second-biggest profit on record for the GCC markets.

Energy, Materials and Diversified Financials were the top three sectors by absolute y-o-y profit decline vs. Q1-2022 as these sectors accounted for 56% of total profits during Q1-2023 as compared to 70% of profits during Q1-2022.

In terms of q-o-q performance, the growth in profit was led by higher profits for Banks and Utilities sectors that was partially offset by a drop in profits mainly for the energy, capital goods and materials sectors.

In terms of regional trend, the q-o-q profit growth was seen across the GCC exchanges during the quarter, barring Saudi Arabia. Aggregated profits for the Kingdom reached USD38.9 billion during Q1-2023 as compared to $40.6 billion during Q4-2022, a decline of 4.2% mainly led by fall in profits for energy, materials and utilities sectors.

On the other hand, Qatari companies reported the biggest profit growth of 65.9% followed by Omani and Dubai-listed companies with q-o-q profit growth of 49.9% and 43.7%, respectively.  – TradeArabia News Service