By Andy Sambidge
Kuwait Financial Centre report shows continuing impact of global downturn in region.
Aggregate earnings of GCC companies continue to suffer amid the impact of the global downturn with Q3 results down by 23 percent so far, a new report showed.
Kuwait Financial Centre (Markaz) said that with 58 percent of companies declaring results so far, the aggregate results showed a negative growth of 23 percent across the region, compared to the third quarter in 2008.
It said the visibility was "very poor" for Kuwait with only 20 percent of companies reporting their earnings so far.
It added that there was an improvement on a sequential basis for Saudi Arabia with Q3 earnings higher by 8 percent than the previous quarter and with Q2 being 52 percent better than Q1.
"This is expected to impact the overall earnings direction for 2009 positively for GCC. Saudi Arabian earnings form 50 percent of the overall GCC earnings during normal years like 2007," Markaz said. In Qatar, all the listed companies have declared their results for Q3 2009, with an average 17 percent decline on a year-on-year basis. In comparison to the second quarter the earnings have declined by 12 percent.
In the UAE, Markaz said 60 percent of companies have reported their Q3 earnings so far, with average falls of 17 percent.
"Among the sectors, the decline can be mainly attributed to the real estate segment in the UAE with a 74 percent decline in earnings for the nine months of 2009 compared to the same period in 2008. Banks in UAE also have suffered a decline of 23 percent," the report added.