LOC14:57
11:57 GMT
National Bank of Kuwait
KUWAIT, Aug 22 (KUNA) -- Listed Kuwaiti companies saw a notable rise in profits in the first half of 2017; however, weak revenue growth continued to indicate softness in business activity, shows an economic report.
The financial sector was the main contributor to growth as investment gains, especially earlier in the year, boosted companiesآ’ bottom lines. Meanwhile, results in other sectors, including consumer companies, reflected a more lackluster operating environment, said the report, released by the National Bank of Kuwait (NBK).
Profit announcements seemed to have a positive impact on market sentiment, with the general index up 6.4% during the reporting period.
Earnings of listed corporates were up 16% y/y during the first half of the year. The aggregate profits of 150 reporting companies, out of 158 Kuwaiti companies listed on Boursa Kuwait, rose to KD 883 million. There was also a significant drop in aggregate losses, declining by 50% y/y to KD 25 million; the number of loss-making companies fell from 38 in 1H16 to 34.
The financial services sector benefited from the stock market rally earlier in the year. Boursa Kuwait has since given up some of these gains but the value-weighted index was still up 5% in 1H17. Non-bank financial service companies with large exposures to the local market made strong gains on their investment portfolios. Total profits for this sector tripled compared to 1H16 to KD 93 million.
The strong results of the sector were broad-based. The number of loss-making companies dropped notably compared to 1H16 with 70% of reporting companies seeing an improvement in earnings, it added.
Banks were the second largest contributor to profit growth in 1H17. Profits for the sector rose a good 8.4% to KD 375 million. Most banks contributed to the growth, with only two banks seeing declines in earnings. While growth came primarily from investment gains, net interest income also supported the sectorآ’s profitability, the report said.
Industrial companies were another main contributor to profit growth. The sectorآ’s profits were up 18% in 1H17. Gains from the sector were also broad-based with 65% of the companies seeing positive growth in earnings, it indicated. (end)
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