Net profits of MSX-listed companies touch OMR2.1bn

Muscat: Total net profits for Muscat Securities Exchange (MSX)-listed companies in Oman increased by 25.4 percent  year-on-year (y-o-y) to $2.1 billion in FY-2023 as compared with $1.7 billion in FY-2022, according to a new report.

“The rise in aggregate profits was driven by the Banking Sector which alone represented over 56.0% of the aggregate net profits in the exchange during the year,” Kamco Invest said in its GCC Corporate Earnings Report : Q4-2023 April 2024.

“Moreover, sectors like Utilities and Energy also witnessed significant y-o-y absolute net profit gains during FY-2023 contributing to the overall net earnings increase,” it further added.

In terms of quarterly performance, total net profits increased by 23.4 percent y-o-y to $405.2 million in Q4-2023 compared with $328.4 million in the corresponding quarter in 2022. Total Q4-2023 earnings of the Banking Sector, the biggest sector in the exchange by market cap, increased by 37.8 percent to reach $258.8 million up from $187.7 million in Q4-2022, the Kamco Invest report said.

“The Diversified Financial Sector followed with the second largest total net profits, reaching $59.6 million during Q4-2023 as compared to $8.2 million in Q4-2022 recording 627.3 percent y-o-y growth,” the report further added.

FY-2023 earnings of the Banking Sector, the biggest sector in the exchange by market cap, recorded an 18.6 percent gain to reach $1.2 billion up from $993.1 million in FY-2022. The Telecom Sector followed with the second largest total net profits, reaching $222 million during FY-2023 despite witnessing 22.6 percent y-o-y decline from FY-2022 ($286.8 million).

In the Banking Sector, net profits for Bank Muscat increased by 5.8 percent to reach $551.9 million in FY-2023 as compared to $521.5 million during FY-2022. Bank Muscat attributed its yearly earnings growth to its proactive customer-centric strategies, business growth and efficiency which was underpinned by improving economic and business conditions in Oman through an increase in oil prices, consecutive years as well as budget surpluses due to Government’s progressive vision and fiscal, economic, and structural reforms.

In the Telecom sector, OmanTel led the way in terms of total profits that reached $194.3 million in FY-2023, down 18.1 percent y-o-y. Similarly, Oman Qatari Telecommunications Company posted FY-2023 net profits that reached $27.8 million as compared to $50 million in FY-2022. The decrease in net earnings was largely attributed to the absence of capital gain from the sale of towers, which was factored into the 2022 net profit. In context, excluding this gain, the net profit for 2023 reflects a notable 9.7 percent growth compared to the previous year, supported by stable EBITDA, and reduced financial costs.

Aggregate net profits for the Utilities Sector jumped 34.4 percent to $175.9 million during FY-2023 as compared to $130.9 million during FY-2022. The growth in total net earnings of the sector materialized after four out of the eight companies that comprise sector reported y-o-y growth in their net profits during the year led by Phoenix Power Company ($57 million) and Sembcorp Salalah ($53.3 million). ACWA Power Barka returned to profitability in FY-2023 to reach $0.9 million as compared to a net loss of $5.9 million in FY-2022.

The FY-2023 total net profit performance was mixed for the remaining sectors on the exchange. FY-2023 net earnings in the Diversified Financial Sector declined by 8.6 percent to reach $192.7 million as compared to $210.3 million during FY-2022.
Comparatively, FY-2023 aggregate net earnings for the Energy Sector improved by 7.2 percent y-o-y to reach $212.4 million as against $198 million in FY-2022.

GCC companies
After registering record profits during 2022, net profits reported by listed companies in the GCC declined by 13.7 percent or $38 billion to reach $240.5  billion in 2023 mainly led by fall in profits for some of the key large-cap sectors. The biggest decline was reported by companies in the Energy Sector with aggregate profits down by almost a quarter or $39.1 billion to reach $127.1 billion in 2023.

The Materials Sector was next with a profit decline of 78.3 percent or $12.85 billion to reach $3.6  billion followed by Capital Goods and Diversified Financials Sectors with profit declines of $5.1 billion (-48 percent) and $1.9 billion (-55.2 percent), respectively. These declines were partially offset by higher full year profits reported by companies mainly in the Banking, Real Estate and F&B Sectors.