Profit of Listed Companies on KSE
Profit of Listed Companies on KSE– (First quarter results ended 31-03-2009)
After the end of the period given to listed companies for providing their financial statements for the first quarter ending March 31, 2009, 158 companies announced their results out of 176 companies listed on KSE excluding Non-Kuwaiti companies, those with fiscal year not ending on December 31st, and companies whose shares are already suspended from trading (18 companies up till the date this report is published). Aggregate profits for the 158 companies which announced their 1Q2009 results stood at KD59.97mn for the 3-months ending on March 31 2009, registering a decline of 93.92% compared to KD986.19mn reported in the same period in 2008. Quarterly profits announced by all listed companies on KSE – excluding companies listed in the parallel market – stood at KD133.95mn registering a decline of 88.22 percent compared to the corresponding period of last year.
The aftermath of the financial crisis had its toll on the performance of heavy-weight local banks. Aggregate profits of the Banking sector stood at KD130.33mn for the first quarter of 2009, registering a decline of 55.61% compared to KD293.57mn reported in the same period in 2008. An in depth look into the financials of the two largest banks in Kuwait, National Bank of Kuwait (NBK) and Kuwait Finance House (KFH), reveals that those two banks reported a 22.62% and 46.47% decline in their 1Q2009 profits respectively. The retreat in NBK’s profits can be attributed to impairment losses for investment securities amounting to KD15.08mn, whereas there was no corresponding loss in 2008. In addition to that administrative expenses jumped 75.89% higher during this quarter, reaching KD30.01mn. As for KFH’s results, the decline in the Islamic bank’s profits can be attributed to a 1,046.87% increase in its impairment provisions which stood at KD45.93mn for 1Q2009. In the meantime, two banks reported net losses for the current period. Kuwait International Bank and Boubyan Bank reported a loss of KD2.20mn and KD11.70mn respectively, compared to profits of KD5.15mn and KD5.07mn reported respectively for the corresponding period of last year.
Looking at the Investment sector, it is clear that it was hit the hardest by the financial crisis when compared to other sectors of the market. Number of Investment stocks suspended from trading for failing to abide to KSE’s deadline to announce 1Q2009 results reached 8 companies (three of which were already suspended for failure to disclose FY2008 results). The sector as a whole reported the steepest loss amongst the other seven sectors, with an aggregate loss of KD201.42mn reported for three months period ending March 31, 2009, compared to net profit of KD225.70mn for the corresponding period of last year. Only two companies within the sector managed to eke out some profits. Burgan Group Holding Company and Kuwait Bahrain International Exchange Company reported modest profits. Meanwhile, Central Bank of Kuwait Governor, Sheikh Salem Abdul Aziz Al Sabah stressed that investment companies are still faced with major challenges and need to maintain vigilance amid the current global economic crisis.
The services sector was the best performer among all sectors, with an aggregate profits reaching KD134.70mn for the first three months ending March 31, 2009, down by 26.13% from the corresponding period of last year. It is also worth noting that 7 services companies were suspended from trading for not disclosing their financial results by the deadline. The good performance of the sector as a whole can be attributed to the sound profits announced by the heavy-weight services companies like Zain. Zain is the biggest company listed on KSE in terms of market capitalization. The telecom giant reported net profits of KD75.73mn for 1Q2009, up 3.37% from the corresponding period of last year. The group’s CEO mentioned that the year 2009 is a tough from the financial aspect and the first quarter was the toughest so far. He added that the sharp volatility of currency rates especially in Africa had a huge impact on the company’s performance.
Despite a decline in 1Q2009 profits of Agility and National Mobile Telecommunications Company (NMTC), they both had solid results when compared to other companies listed within the same sector. Agility and NMTC reported a net profit of KD36.95mn and KD15.31mn respectively for the three months period ending March 31, 2009. Agility’s profits marginally declined by 1.56% when compared to the corresponding period of last year. The company’s earnings from its core business was not affected much during the period, as it stood at KD384.25mn, down by 9.06% when compared to the corresponding period of last year, as the company is still benefiting from the US military existence in Iraq and the contracts between the company and the US army.