Muscat – The total net profits of listed companies in Oman slightly decreased by 0.9% year-on-year to reach $506.4mn (approximately RO195mn) in Q2 2024, compared to $511.2mn (approximately RO197mn) recorded in the same quarter of 2023, according to a report by Kuwait-based Kamco Investment.

For the first half of 2024, the total net earnings of companies listed on the Muscat Stock Exchange remained stable at $1.0bn (approximately RO385mn), the report said.

Growth in net earnings was primarily driven by the banking and commercial and professional services sectors, with six out of the fourteen sectors on the Omani bourse reporting year-on-year profit growth during Q2 2024.

The banking sector, the largest on the Muscat Stock Exchange by market capitalisation, saw its total Q2 2024 earnings increase by 26.3%, reaching $274.6mn, up from $217.4mn in Q2 2023. For the first half of 2024, the sector’s total net profits grew by 21.9% year-on-year to $581.0mn, compared to $476.6mn a year earlier.

Bank Muscat led the banking sector with the highest net earnings in Q2 2024, reporting $120.4mn, up from $107.9mn in Q2 2023. The bank’s net profits for the first half of 2024 also rose by 8.3% year-on-year, reaching $261.2mn, compared to $241.1mn in the first half of 2023. This strong performance was attributed to overall improvements across the bank’s various business lines and increased volumes. Sohar International Bank followed, posting the second-largest net profits in Q2 2024, which reached $65.3mn, up from $27.0mn in Q2 2023.

In the utilities sector, marginal profit growth was driven by higher earnings reported by five out of the seven companies in the sector. Phoenix Power Company led the sector with a slight 0.8% year-on-year growth in its Q2 2024 net profits, reaching $38.1mn. This was followed by Al Suwadi Power Company and Al Batinah Power Company, which posted Q2 2024 net profits of $23.3mn and $22.4mn, respectively. Phoenix Power attributed its earnings increase to higher capacity charge revenues, a decrease in finance costs, and higher interest income, as per the Kamco Investment report.

Oman’s telecom sector saw a decline in total net profits, falling by 15.7% to $44.4mn in Q2 2024, compared to $52.6mn in Q2 2023. Both telecom companies in the sector reported year-on-year profit declines during the quarter. Omantel’s Q2 2024 net profit reached $38.8mn, down from $44.8mn in Q2 2023. For the first half of 2024, Omantel’s net earnings declined by 27.7% year-on-year to $72.3mn, down from $100mn in H1 2023. The year-on-year decline was mainly due to a one-time gain from the sale and leaseback of the Zain KSA tower transaction in H1 2023.

GCC corporate earnings show healthy growth

Across the GCC, aggregate net profits reported by companies listed on GCC exchanges grew by 5.7% year-on-year in Q2 2024, driven by broad-based growth across most markets in the region, with the exception of Oman.

Regionally, Dubai reported the second-highest year-on-year profit growth (after Bahrain), with a 30.9% increase to $6.7bn in Q2 2024. Bahrain also saw double-digit year-on-year profit growth during the quarter, followed by low to mid-single-digit profit growth in the rest of the GCC countries.

The growth in profits was broad-based, with double-digit increases in key sectors such as banking (10.8%) and telecom (15.8%). The materials and real estate sectors showed even stronger growth of 45.6% and 23.9%, respectively.

On the other hand, the energy sector saw a 0.9% decline in profits, primarily due to a 2.5% drop in net profits for Saudi Aramco, which outweighed higher profits for most companies in the sector. The F&B sector also registered a steep profit decline of 35.5%, largely due to a drop in profits reported by IHC in Q2 2024.

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