Muscat: Total net profits for listed companies in Oman increased by 24 percent year-on-year to $584.6 million in the third quarter (Q3) of 2023 compared with $471.4 million in the corresponding quarter in 2022.
Total Q3-2023 earnings of the Banking Sector, the biggest sector in the exchange by market cap, jumped by 18.1 percent to reach $303.5 million up from $256.9 million in Q3-2022, Kamco Invest said in its 'GCC Corporate Earnings Report : Q3-2023 November 2023.
The Utilities Sector followed with the second largest total net profits, reaching $95.4 million during Q3-2023 as compared to $41.2 million in Q3-2022 recording 131.7 percent year-on-year (y-o-y) growth. Net profits for Bank of Muscat increased during the quarter setting the tone for the overall growth of profits in the Banking sector. The bank posted the biggest profits within the Banking Sector during Q3-2023 at $141.7 million as compared to $127.4 million during Q3-2022, the Kamco Invest report said. The combination of an increase in customer deposits including Islamic customer deposits and growth in interest and non-interest income were the main drivers of the banks’ profits during the quarter.
Sohar Bank and National Bank of Oman (NBO) followed with $47.4 million and $36.4 million in net profits during Q3-2023.
The profit growth for the Utilities sector came after two out of the seven companies in the sector reported y-o-y increase in net earnings growth. Phoenix Power Company lead the way in terms of total profits that reached $39 million in Q3-2023, up 2 percent y-o-y, followed closely by Al Suwadi Power Company and Al Batinah Power Company which posted Q3-2023 net profits that reached $23.2 million and $21.2 million, respectively.
Total net profits for the Energy Sector increased by 6.1 percent to $53.4 million during Q3-2023 as compared to $50.3 million during Q3-2022. Newly listed energy company OQ Gas Network reported the biggest Q3-2023 net profit among the companies in the Energy Sector after it recorded $30.5 million in net earnings during the quarter as compared to $29 million in Q3-2022. Renaissance Services and Al Maha Petroleum Products followed with the second and third largest net profits during the quarter at $7.4 million and $6.4 million, respectively. Comparatively, National Gas Company reported a loss of $0.3 million during Q3-2023 registering the only loss among the six companies in the Energy Sector that reported their financials.
Total Q3-2023 net profits for the Telecom Sector remained nearly unchanged at $51.2 million as compared to $51.1 million in Q3-2022 witnessing a marginal 0.1 percent y-o-y growth. Furthermore, total Q3-2023 net earnings for the Diversified Financial sector witnessed nearly 50 percent drop in quarterly net earnings to reach $49.9 million as compared to 99.1 million during Q3-2023.
Quarterly profits reported by GCC-listed companies once again showed a y-o-y decline in profits during Q3-2023 mainly led by a fall in energy and commodity prices. Most global commodity prices witnessed a decline during the quarter that was also reflected in the slide in the Bloomberg Commodity index by around 10 percent since the start of 2023. Moreover, average Brent spot price was down 14 percent in Q3-2023 as compared to Q3-2022, which was reflected in profits of listed energy companies in the GCC, including Aramco.
A fall in profits for the Capital Goods and F&B sectors also added to the decline while profits for the Utilities sector was affected by higher financing costs as declared by the two biggest players in the sector. On the other hand, Banking sector profits once again remained resilient registering healthy q-o-q and y-o-y growth as lending grew in most markets despite higher interest rates. The Telecom sector also showed higher y-o-y profits as did Real Estate during Q3-2023.
Aggregate net profit for GCC-listed companies reached $62.3 billion during Q3-2023 as compared to $72.9 billion during Q3-2022 resulting in a double-digit y-o-y decline of 14.4 percent. Out of the 22 sectors in the region, profits for 12 sectors showed y-o-y declines while 10 sectors showed higher profits.
At the country level, aggregates for Saudi Arabia and Abu Dhabi showed double-digits declines vs. last year while Bahraini companies showed a decline of 8.3 percent. On the other hand, Kuwait showed the biggest y-o-y earnings growth of more than 40 percent during Q3-2023, while Dubai aggregates showed equally healthy growth of 35.8 percent. Aggregate for Qatari companies was almost
flat with a marginal y-o-y growth of 0.3 percent . In terms of q-o-q performance, aggregate GCC profits increased by 7.7 percent. On the other hand, Bahrain, Kuwait and Abu-Dhabi listed companies reported q-o-q decline in profits.