Saudi-listed firms’ aggregate profit drops 31% in Q2 2019

The aggregate net profit of Tadawul-listed companies extended its downturn for the second quarter, falling 31 percent (SAR 9.08 billion) year-on-year (YoY) to SAR 19.86 billion in Q2 2019, data compiled by Argaam showed.

The drop was attributed to a profit decline of SAR 7 billion in basic materials, pressured by petrochemical producers mainly Saudi Basic Industries Corp (SABIC) that posted a profit plunge of SAR 4.58 billion for the same quarter.

Meanwhile, Saudi Kayan Petrochemical Co. and Saudi Arabian Mining Co. (Maaden) incurred losses in Q2 2019.

In addition, Saudi British Bank (SABB) and Saudi Investment Bank (SAIB) turned to losses in Q2 2019.

** Excluding Atheeb (GO), Wafa, Al Khodari, Alujain and Thimar as they were not able to disclose results within the deadline.

Banks had the highest contribution to total market profit at 51 percent. The sector’s net profit decreased by 5 percent YoY in Q2 2019 to SAR 10.10 billion.

The sector was hit by SABB and SAIB’s losses that reached SAR 246.3 million and SAR 284.7 million, respectively.

Basic materials came second accounting for 19 percent of total market profit. The sector reported net profit of SAR 3.78 billion in the second quarter 2019, compared to SAR 10.78 billion a year earlier. The results were pressured by petrochemical producers despite improved performance of cement firms.

SABIC, the largest listed company on Tadawul, reported a 68 percent YoY profit slump in Q2 2019 to SAR 2.12 billion on lower average selling prices and weak performance in all segments.

The telecommunications sector accounted for 15 percent of the market’s total earnings, posting SAR 3.02 billion in net profit for Q2 2019, compared to SAR 2.33 billion a year earlier. The profit increase was attributed to a 17 percent YoY rise in Saudi Telecom Co.’s net profit. Mobily and Zain Saudi also turned profitable in the same quarter.

Net profit of the top ten companies in terms of earnings represented 80 percent of the market aggregate profit in Q2 2019, amid mixed performance.

The first half aggregate net profit dropped 22 percent YoY to SAR 40.87 billion.