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Listed companies in the UAE will see higher net profit growth rates to 2022 compared to their peers in the rest of the GCC, mainly driven by higher earnings in the banking, real estate, utilities and capital goods sectors.
Net profits of Dubai-listed companies more than doubled to $14.2 billion in 2022, from $6.3 billion the previous year, while aggregate net profits of Abu Dhabi-listed companies rose 63.5% to $30.5 billion, while The previous year was 18.6 billion in 2021.
GCC-listed companies reported net profits that jumped to a record $273.3 billion in 2022, from $199 billion in 2021. The surge of $74.2 billion, or 37.3%, was mainly driven by a sharp increase in profits in the energy sector A report said Saudi Aramco reported higher profits ($159.1 billion in fiscal 2022, and $105.4 billion in FY2021) is the main reason.
Profits rose on record across the CCC region as economic activity in the region got a post-pandemic boost, leading to one of the best GDP growth rates in 2022.
Analysts at S&P Global Ratings forecast that corporate and infrastructure companies in the GCC are expected to remain resilient in 2023, despite surging interest rates and inflation and debt capital markets being less accommodative amid persistently sluggish economic growth. They expect corporate and infrastructure issuers in the region to comfortably navigate 2023, supported by solid earnings profiles, strong balance sheets and healthy funding and maturity profiles. S&P said GCC companies’ operating performance accelerated in 2022, alongside positive rating action, thanks in large part to improvements in the region’s oil and gas-based economies.
Net profits of Dubai-listed companies soared 47.5% to $3.4 billion in the final quarter of 2022 from $2.3 billion a year earlier, while Abu Dhabi-listed companies posted a 49.4% year-on-year increase An investment by Kamco Invest Strategies & Research reported net income of $7.8 billion in the fourth quarter of 2022, compared with net income of $5.2 billion in the fourth quarter of 2021.
The top five industries in total net profit achieved double-digit growth during the year. The banking sector led the way, reporting total net income of $700 million in fiscal 2022, up from $4.9 billion. Total real estate net profit jumped 72.3 percent to $3.1 billion from $1.8 billion, while utilities totaled $2.4 billion, up 23.6 percent.
In Dubai, the banking, real estate and utilities sector accounted for the largest share of corporate profits in the fourth quarter of 2022 at 87.4%, up 61.7% year-on-year. Total banking net profit rises from $1.2 billion in Q4 2021 to $1.9 billion in Q4 2022, mainly due to 89% increase in net profit of Emirates Bank to reach $1 billion in Q4 2022 , $547.8 million in the fourth quarter of 2021. “The bank’s strong performance was attributable to a record net profit in its Islamic division coupled with growth in total income.”
Analysts Junaid Ansari and Mohamed Ali Omar of Kamco Invest wrote that consumer services was the only sector in Dubai to report a total loss for the fourth quarter of 2022, while the transportation sector had the largest percentage drop in profit among the 11 sectors on the exchange.
In Abu Dhabi, the capital goods sector drove strong gains in quarterly earnings, after gains from two newly listed companies, Multiply Group and Alpha Dhabi Holding, strengthened the sector.
“The Capital Goods Industry’s total net profit in Q4 2022 increased nine-fold to $2.8 billion compared to $319.5 million in Q4 2021. Multiply Group announces Q4-2022 net profit of $2.4 billion, up from $22.9 million in the fourth quarter of 2021,” the report said.
Looking at the PMI data, manufacturing activity across the GCC also showed a continued growth trend, especially in Saudi Arabia and the UAE, where PMIs remained comfortably above growth levels, while Qatar only saw a slowdown in the second half of the year. Kamco Invest said continued growth in bank lending in the region was another indicator of increased business investment during the year.
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