Tadawul trading screen

Tadawul-listed companies reported SAR 193.22 billion aggregate net profit for the third quarter of 2022, a rise of 32%, or SAR 47.21 billion, from SAR 146.01 billion in the year-ago period, extending their positive performance for the sixth straight quarter.

A total of 150 companies reported profit in Q3 2022, of which 23 firms turned profitable, 81 logged profit growth, while 46 recorded a profit drop when compared to Q3 2021. On the other hand, 44 companies incurred losses in Q3 2022, of which 15 swung to losses, 14 deepened losses, while 15 trimmed their losses compared to Q3 2021.

The aggregate profit growth in the third quarter was driven by improved performance of most sectors, topped by energy that leapt 42% YoY. It was followed by banks and telecommunications, which rose 23% each.

Meanwhile, the insurance and real estate management and development swung to profit in the three-month period.

Saudi Aramco reported a 43% profit jump to SAR 156.07 billion in Q3 2022, compared to SAR 109.07 billion a year earlier, on higher crude oil prices and sold quantities.

On a sector level, energy firms accounted for 80.3% of Saudi companies' aggregate profit in Q3 2022, reporting a 42% profit rise YoY to SAR 155.20 billion in the three-month period. The strong performance was fueled by a 43% increase YoY in Saudi Aramco’s net profit on higher crude prices and sold quantities.

Banks took the second place, with 8.6% of the market’s aggregate profit. The sector’s profit rose 23% YoY to SAR 16.54 billion in Q3 2022. The sector was mainly driven by higher earnings of listed banks on higher net special commission income and lower credit loss provisions.

Materials ranked third, contributing 3.6% to the market’s combined earnings in the three-month period. The sector's combined profit fell 39% YoY to SAR 6.99 billion, pressured by the petrochemical producers on lower average selling prices. Saudi Kayan Petrochemical Co., Yanbu National Petrochemical Co. (Yansab) and Rabigh Refining and Petrochemical Co. (Petro Rabigh) turned to losses.

In addition, SABIC recorded the lowest quarterly earnings in two years at SAR 1.84 billion in Q3 2022, dropping 67% YoY, due to lower profit margins and average prices, in addition to a rise in feedstock prices as well as fright and distribution costs.

Utilities came fourth, dominating 2.5% of the market’s total earnings. The sector’s earnings fell 11%, as Saudi Electricity Co. (SEC) posted a 18% profit decline, due to higher power costs, financing charges and lower income from discontinued operations.

Telecommunications ranked fifth, representing 2.1% of the market’s combined earnings in Q3 2022. The sector posted a 23% profit rise in Q3 2022, backed by the collective increase in profit of its listed companies.

The Saudi market's top 10 companies in terms of profitability accounted for about 95% of the aggregate profit in Q3 2022. These companies’ profits rose collectively YoY, excluding SABIC and Saudi Electricity that fell 67% and 18%, respectively.

At the level of 9M 2022 aggregate net earnings, they leapt 57% to SAR 598.82 billion, compared with SAR 381.19 billion a year earlier.

The nine-month results included non-recurring profits of SAR 5.68 billion as Kingdom Holding Co. (KHC) recorded gains from selling half of its stake in Four Seasons Holding Co. for SAR 5.87 billion. Abdullah Al Othaim Markets Co. recorded earnings from selling its investments in Al Othaim Investment Co. and a land plot for SAR 701 million. In addition, SABIC recorded net impairment provisions worth SAR 899 million in a subsidiary.

Saudi Electricity recorded consumer receivables provisions and other claims at SAR 1.28 billion.

When excluding Aramco’s profits and non-recurring items, 9M 2022 combined profits leapt 17% to SAR 121.27 billion, compared to SAR 103.91 billion a year earlier.