The total net profits of Oman’s listed companies on the Muscat Stock Exchange (MSX) increased by a modest 4.3% to $1.64bn (approximately RO632mn) during the first nine months of 2024, compared to $1.57bn (approximately RO605mn) in the same period of 2023, according to a new report from Kamco Investment.

The growth in net earnings was primarily driven by the banking, utilities, and diversified financial sectors, with six out of the fourteen sectors on the Muscat Stock Exchange reporting year-on-year profit growth during the third quarter of 2024. Kamco Investment’s latest GCC Corporate Earnings Report, released on Wednesday, noted that the banking sector, in particular, contributed significantly to the overall profit expansion in the sultanate.

For Q3 2024, total profits for listed companies in Oman reached $626mn, a 4% increase compared to $601.9mn in the same quarter of 2023.

Banking sector shows solid performance

The banking sector, the largest on the MSX by market capitalisation, saw its total earnings rise by 8.8% to $330.2mn in Q3 2024, up from $303.5mn in Q3 2023. For the first nine months of 2024, the banking sector’s total net profits grew by 16.8% year-on-year, reaching $911.2mn, compared to $780.1mn in the same period a year earlier.

Bank Muscat reported the highest net profit among the banks for Q3 2024, posting $152.4mn, up from $141.7mn in Q3 2023. The bank’s net profits for the first nine months of 2024 also rose by 8.0%, reaching $413.6mn, compared to $382.9mn in the same period of 2023. The growth was attributed to improvements across all business lines.

Sohar International Bank posted the second-largest net profit for Q3 2024, reporting $67.4mn, a substantial increase from $47.4mn in the same period of 2023. The bank’s net earnings for the first nine months of 2024 surged by 89.6%, reaching $188.3mn, up from $99.3mn in the same period last year.

Kamco Investment highlighted that Sohar International Bank’s improved performance was driven by a 28% rise in low-cost customer deposits, which grew to RO5.9bn. The bank’s net loans-to-customer-deposit ratio stood at 71%, down from 89% in the previous year, underscoring its strong funding position.

The utilities sector, the second-largest by market capitalisation on the MSX, saw a 12.4% year-on-year increase in net earnings for Q3 2024, rising to $107.3mn from $95.4mn in Q3 2023. The positive performance was supported by strong results from six out of the seven listed utility companies, according to Kamco Investment.

In contrast, the telecom sector reported a decline in profits, with net earnings falling by 2.5% to $49.9mn in Q3 2024, down from $51.2mn in the same quarter of 2023. Kamco Investment attributed the decline to a 4.4% drop in Omantel’s net profits, which fell to $43.8mn from $45.9mn. However, Ooredoo Oman recorded a 13.2% increase in net profits, rising to $6.1mn from $5.4mn in Q3 2023.

Energy sector weighs on GCC profits

On a broader regional level, net profits for companies listed on GCC stock exchanges declined by 3.3% year-on-year in Q3 2024, totalling $59.6bn, compared to $61.6bn in Q3 2023. This decline was also reflected in a 2.0% drop compared to Q2 2024, according to Kamco Investment.

The decline was primarily driven by a significant drop in earnings from the energy sector, which saw profits fall by 18.5% year-on-year to $28.5bn in Q3 2024. This was further exacerbated by lower profits in the real estate and food & beverage sectors.

Nevertheless, healthy profit growth in the banking and materials sectors helped offset some of the overall decline. Banks in the GCC region recorded a 10.2% year-on-year profit growth, reaching $14.9bn, while the materials sector posted multifold profit increases.

At the country level, the aggregate profits of firms listed on six out of the seven GCC exchanges showed positive growth. However, this was more than offset by a 10.5% decline in the profits of Saudi-listed companies, which fell by $4.4bn to $37.5bn.

The decline in Saudi Arabia was largely due to a fall in profits for Saudi Aramco, which saw a 21.0% reduction in net profits. Excluding Aramco’s results, net profits for Saudi-listed companies rose by 27.9%, and the overall GCC aggregate net profit increased by 17.1%, according to Kamco Investment.

Among other GCC markets, the Abu Dhabi exchange recorded the highest absolute profit growth, with a $1.5bn (9.3%) increase, bringing total profits to $9.1bn. Dubai-listed companies also saw a profit increase of $0.3bn (5.4%), reaching $6bn. Companies in Qatar and Kuwait reported solid growth, with increases of $0.3bn and $0.2bn, respectively.

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