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Profits of Saudi Firms USD6.7 Billion During Q1

Profits of Saudi Firms USD6.7 Billion During Q1
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Profits of Saudi Firms USD6.7 Billion During Q1

Profits of Saudi Firms USD6.7 Billion During Q1

The total profit of Saudi firms during the first quarter of 2018 reached around SAR25.4 billion (USD6.7 billion), a drop of 16.4% compared to accomplished profit during the same period last year. According to an analysis by Asharq Al-Awsat, Saudi Electricity Company had played an influential role in the drop in profits in which the company achieved in the first quarter of 2017 profits of SAR4.9 billion (USD1.3 billion) while in the first quarter SAR1.2 billion (USD320 million).

With revising profits of the Saudi Electricity Company in Q1 of 2017 and losses during Q1 of 2018, the total of these two quarters reaches SAR3.7 billion (around one billion) which means an impact of more than 12.8 percent, in case the net profits were moved during these two quarters to the total of profits achieved by listed companies (166 other listed companies).

In case the results of Saudi Electricity Company weren’t included in the net profits of the Saudi market during the first quarter of 2017 and quarter one of 2018, then the fiscal results of the remaining Saudi companies would show a slight progress, in which profits would reach around SAR26 billion (USD6.9 billion) in Q1 of 2017 compared to SAR26.6 billion (USD7 billion) in profits of Q1 of 2018, with 2.3 percent growth.

Given these results, a total number of 70 listed Saudi firms in the local market has shown growth in profits of the first quarter of 2018, at a time when the country has revealed the budget of Q1 of this year.

These updates coincide with a program launched on Wednesday, Financial Sector Development Program 2020, which is one of the main programs to achieve goals of the Saudi Vision 2030. The program’s objectives include creating a diversified and effective financial services sector to support the development of the national economy, diversifying its sources of income, and stimulate savings, finance, and investment by addressing the sector’s challenges.

Through its first pillar, the program will work on a number of Vision 2030-related initiatives, such as enabling new types of players to enter the market, incentivizing the financial sector to finance small and medium-sized enterprises (SMEs) and driving toward a cashless society.

While the second pillar will allow the program to make the Saudi financial market more attractive to local and international investors through a number of initiatives that will see more diversified
investment products and developed legislation.

The third pillar, however, focuses on boosting the demand and supply-sides of savings to bolster the Kingdom’s savings ecosystem.

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IMF: Middle East Conflict Escalation Could Have Significant Economic Consequences

Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
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IMF: Middle East Conflict Escalation Could Have Significant Economic Consequences

Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki

The International Monetary Fund said on Thursday that an escalation of the conflict in the Middle East could have significant economic ramifications for the region and the global economy, but commodity prices remain below the highs of the past year.

IMF spokesperson Julie Kozack told a regular news briefing that the Fund is closely monitoring the situation in southern Lebanon with "grave concern" and offered condolences for the loss of life.

"The potential for further escalation of the conflict heightens risks and uncertainty and could have significant economic ramifications for the region and beyond," Kozack said.

According to Reuters, she said it was too early to predict specific impacts on the global economy, but noted that economies in the region have already suffered greatly, especially in Gaza, where the civilian population "faces dire socioeconomic conditions, a humanitarian crisis and insufficient aid deliveries.

The IMF estimates that Gaza's GDP declined 86% in the first half of 2024, Kozack said, while the West Bank's first-half GDP likely declined 25%, with prospects of a further deterioration.

Israel's GDP contracted by about 20% in the fourth quarter of 2023 after the conflict began, and the country has seen only a partial recovery in the first half of 2024, she added.
The IMF will update its economic projections for all countries and the global economy later in October when the global lender and World Bank hold their fall meetings in Washington.
"In Lebanon, the recent intensification of the conflict is exacerbating the country's already fragile macroeconomic and social situation," Kozack said, referring to Israel's airstrikes on Hezbollah in Lebanon.
"The conflict has inflicted a heavy human toll on the country, and it has damaged physical infrastructure."
The main channels for the conflict to impact the global economy have been through higher commodity prices, including oil and grains, as well as increased shipping costs, as vessels avoid potential missile attacks by Yemen's Houthis on vessels in the Red Sea, Kozack said. But commodity prices are currently lower than their peaks in the past year.
"I just emphasize once again that we're closely monitoring the situation, and this is a situation of great concern and very high uncertainty," she added.
Lebanon in 2022 reached a staff-level agreement with the IMF on a potential loan program, but there has been insufficient progress on required reforms, Kozack said.
"We are prepared to engage with Lebanon on a possible financing program when the situation is appropriate to do so, but it would necessitate that the actions can be taken and decisive policy measures can be taken," Kozack added. "We are currently supporting Lebanon through capacity development assistance and other areas where possible."