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Companies listed on the Dubai Financial Market (DFM) recorded a nearly 30% increase in net profits in the second quarter of 2023 compared to a year ago, outperforming their peers in other GCC markets.
Total net earnings for Dubai-listed businesses reached $5 billion in the second quarter of the year, up by 28.6% from a year ago, according to Kamco Invest.
Emirates NBD emerged as the top earner, with total net profits of about AED6 billion, followed by the Dubai Electricity and Water Authority (DEWA) with AED1.93 billion. Mashreqbank posted the third-biggest earnings at AED1.9 billion, followed by Emaar Properties (AED 1.74 billion) and Dubai Islamic Bank (AED1.5 billion).
Overall, Dubai-listed banks, transportation and telecom companies drove the earnings growth, accounting for 65% of the aggregate profits in the exchange during the quarter. Within the banking sector, total net profits rose by $1.1 billion to reach $2.9 billion, mainly driven by Emirates NBD, which recorded a 74.3% surge in profits on the back of higher margins, retail and corporate lending.
However, in Abu Dhabi, listed companies saw a 3.4% year-on-year dip in net profits to reach $8 billion.
The UAE capital’s banking, telecommunication services, food, beverage and tobacco sectors saw an increase in net profits, but those in the energy, capital goods, materials and retailing categories posted declines, contributing to the overall drop in total profits in the Abu Dhabi Securities Exchange (ADX).
GCC performance
Across the Gulf Cooperation Council (GCC) region, aggregate net profit of listed companies fell by 26.6% to $57.9 billion in the second quarter, when compared to $78.8 a year ago.
The decline was mainly led by a drop in energy and commodity prices. A fall in earnings for the retail and capital goods sectors also contributed to the downtrend.
Biggest declines
Businesses in Qatar and Saudi Arabia suffered the biggest declines during the second quarter, although the gains made by corporates listed in Dubai, as well as Kuwait, partially offset the overall decline, according to Kamco Invest.
Aggregate net profits for firms listed in Saudi Arabia saw a steep decline of 35.5% to $38.6 billion, from $59.6 billion a year earlier. The fall was led by a plunge in profits in the energy sector, which posted a decline of 38.2% to $28.9 billion.
“During the quarter, average Brent crude oil prices declined by almost a third to reach $78 per barrel from $113.8 per barrel during Q2 2022. On the other hand, the broader commodity index as reported by Bloomberg showed that average index levels declined by 20% y-o-y during Q2 2023,” the report said.
Despite the lacklustre regional performance, the banking sector across the GCC remained upbeat, with net profits rising on the back of higher net interest income and non-interest income.
(Reporting by Cleofe Maceda; editing by Seban Scaria)
