The study covers 466 locally listed companies, of which 153 are from Kuwait, 96 from Saudi Arabia, 88 from UAE, 52 from Oman, 39 from Qatar and 38 from Bahrain.
Out of the total companies, 283 companies suffered a decline in their annual earnings, while 109 firms incurred losses.
Saudi Arabia’s corporate profits fell by 8 percent to $ 20.4 billion in 2008, as compared to $ 22.2 billion in 2007. Out of 96 companies, 13 companies incurred losses, while 45 companies suffered a fall in their profits.
Saudi Basic Industries Corp. (SABIC) registered the highest profits in 2008 at $ 5.9 billion, a drop of 18.6 percent from 2007 level of $ 7.2 billion. The drop was driven by a combination of decline in commodities prices led by oil and slowing global demand on petrochemical products.
Oil has fallen nearly $ 100 a barrel from its record high of over $ 147 last July, but has flattened out to trade around $ 50 for most of this month in part due to supply cuts by the Organization of the Petroleum Exporting Countries (OPEC).
Saudi Telecom Co. (STC) registered annual earnings of $ 2.9 billion, followed by Al-Rajhi Bank with $ 1.7 billion. SABIC shares dropped by 2.91 percent to SR46.60 and Al-Rajhi Bank by 3.16 percent to SR61.25 yesterday. STC shares were trading at SR43.10.
The Tadawul All-Share Index (TASI) continued to show negative performance. The index closed 31.53 points lower at 5,218.69 yesterday after dropping 216.28 points on Sunday.
The Global report said all GCC countries witnessed fall in corporate profitability except Qatar. Profits of the publicly-listed companies in Qatar increased by 30.7 percent to $ 7.6 billion in 2008 from $ 5.8 billion in 2007. Out of 39 Qatari companies, only one firm incurred a loss, while 8 firms witnessed a decline in their annual earnings. Industries Qatar registered the largest profit among all publicly listed entities in Qatar with near $ 2 billion profit for 2008.
UAE companies displayed the smallest decline in profit last year. The total net income earned by 88 UAE listed companies was slightly down at $ 13.5 billion. The drop was led by companies listed in Dubai Financial Markets, which experienced 13.9 percent decline, while Abu Dhabi companies showed a growth in earnings by 10.5 percent.
Out of the 88 UAE firms, 10 recorded losses, while 46 suffered a decline in their annual earnings. Emirates Telecommunication was the most profitable company with $ 2.4 billion profit, followed by Emirate National Bank of Dubai with $ 1 billion in profits. Emaar Properties, the largest real estate developer in the MENA (Middle East and North Africa) region witnessed its profits dropping by 53 percent because of inventory write-downs.
Oman corporate earnings dropped by 15.9 percent to $ 1.2 billion in 2008 compared to $ 1.5 billion in 2007. Out of 52 companies, only 10 made losses, while 27 witnessed a fall in their profits.
Bahraini firms suffered a drop in profits by 24.2 percent, falling from $ 2.6 billion in 2007 to $ 1.9 billion in 2008.
Total profits by Kuwaiti companies plummeted by 91.9 percent to $ 918 million in 2008 compared to $ 11.3 billion in 2007. Out of 153 companies, earnings of 132 companies dropped.
The most profitable Kuwaiti company was Zain with $ 1.1 billion in earnings, followed by National Bank of Kuwait with $ 874 million and Kuwait Finance House with $ 537 million. Some of Kuwaiti companies are yet to report their financial statements for 2008. They are currently suspended from trading.
The largest profit was made by the banking sector. The report said total sector profit for 2008 was $ 17.8 billion, down by 2.1 percent from $ 18.2 billion in 2007.
The largest profit in the banking sector was made by Al-Rajhi Bank, followed by Samba Financial Group with $ 1.2 billion profit.