Profit of TASI-listed firms exc. Aramco dips to SAR 33.6 bln in Q3

Tadawul trading screen

Tadawul-listed companies reported a SAR 157.09 billion aggregate net profit for the third quarter of 2023, a decline of 19% from SAR 194.75 billion in the year-ago period, weighed by the decline of Saudi Aramco's Q3 profit by more than 21% and the losses from the petrochemicals sector.

Excluding Saudi Aramco, Q3 2023 aggregate net earnings declined 13% to SAR 33.56 billion, hurt mainly by the petrochemicals sector, topped by SABIC and Rabigh Refining and Petrochemical Co. (Petro Rabigh) that logged net loss of SAR 2.89 billion and SAR 1.15 billion, respectively, as well as the loss incurred by Maaden.

Meanwhile, 40 companies operating in different sectors incurred losses in Q3 2023, led by SABIC and Petro Rabigh, in addition to the losses seen by Saudi Kayan and Cenomi Retail.

On the other hand, a total of 165 companies reported earnings in Q3 2023, of which 23 firms turned profitable, 90 logged profit growth, while 52 recorded a profit drop when compared to Q3 2023.

**Including one-off profit amounting to SAR 5.87 billion for Kingdom Holding, which resulted from the sale of half of its stake in Four Seasons Holding Co.

***Including non-cash losses resulting from the deal to sell Hadid, a subsidiary of SABIC, at a value of SAR (2.93) billion.

Sector-wise, the energy sector contributed the largest portion of the aggregate net profit of Saudi listed companies in Q3 2023, with 78%, after its profit fell by 21% YoY to SAR 122.83 billion, due to the decline in Aramco’s profit by 21%. % in addition to Petro Rabigh’s losses.

The banking sector accounted for 11.5% of the market’s aggregate profit, coming in second place in terms of the most profitable sectors, with a 9% rise in profit to SAR 18.09 billion, thanks to the increase in profit of eight out of 12 listed banks, driven by the rise in net special commissions income and decline in credit loss provisions for most banks in the sector.

The telecommunications sector ranked third, accounting for 3.7% of the market's aggregate profit, up from the fifth rank in Q3 2022. The sector's profit rose by about 44% backed by a collective improvement in the results of the sector's companies.

The basic materials sector fell to last rank from the third rank in the corresponding quarter a year ago, as the sector recorded SAR 1.31 billion loss in Q3 2023, mainly affected by the losses of the petrochemical sector, which reached SAR 3.07 billion against the backdrop of the results of SABIC’s results.

SABIC logged SAR 2.88 billion loss as a result of non-cash losses resulting from the deal to sell SABIC’s subsidiary Hadid for SAR 2.93 billion, in addition to lower global demand for chemicals, which led to a collective decline in the average selling prices of products in all of the company’s markets, mainly the US and Western Europe.

The cement sector’s profit also declined by 42% YoY as a result of the decline in sales value and volumes.

The Public Utilities sector contributed to the decline in market's aggregate profit after its profit slipped by 11% to SAR 4.61 billion, as a result of the 12% decline in the profit of Saudi Electricity Co.

The 10 largest companies in terms of profit volume accounted for about 95% of the market’s aggregate profit in Q3 2023. Meanwhile, these companies saw an almost collective increase YoY in their performance in Q3 2023, with the exception of Aramco, Al Rajhi Bank and Saudi Electricity, as the following table shows:

On the other hand, SABIC accounted for the largest losses, reaching about SAR 2.88 billion, followed by Petro Rabigh with SAR 1.15 billion, then Saudi Kayan, Cenomi Retail and Saudi Ceramics, as the following table shows:

The aggregate profit for the nine months of 2023 dropped by 26% to reach SAR 446.8 billion, compared to SAR 602.74 billion in the similar period a year ago.

The nine-month period included one-off losses amounting to SAR 2.93 billion resulting from the deal to sell Hadid, a subsidiary of SABIC, compared to one-off profit amounting to SAR 5.87 billion as a result of Kingdom Holding Co.'s gains from the sale of half of its stake in Four Seasons Holding Co.

Excluding Aramco’s profit and one-off items, the market's aggregate profit decreased by 20% to SAR 99.84 billion, compared to SAR 125 billion in the same period in 2022.