100 Saudi Firms Listed in the Local Market See 2.46% Profit Increase

A Saudi man counts banknotes at his jewelry shop at Tiba market in Riyadh, on October 3, 2016. (AFP/ Getty Images)
A Saudi man counts banknotes at his jewelry shop at Tiba market in Riyadh, on October 3, 2016. (AFP/ Getty Images)
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100 Saudi Firms Listed in the Local Market See 2.46% Profit Increase

A Saudi man counts banknotes at his jewelry shop at Tiba market in Riyadh, on October 3, 2016. (AFP/ Getty Images)
A Saudi man counts banknotes at his jewelry shop at Tiba market in Riyadh, on October 3, 2016. (AFP/ Getty Images)

Total profit of 100 Saudi firms listed in the local market saw a rise of 2.46 percent compared to the same period of 2017, amounting to $14.5 billion, according to the companies’ financial results for the first half of this year.

The profits were majorly gained from banking and petrochemical industries, as they embrace the largest Saudi companies in terms of capital and revenues. The rest of the companies are expected to announce their results on August 9.

The Saudi Stock Market closed this week 1.36 percent down, at 8,254 points, compared to last week's results at 8368 points.

Last week’s total tradings increased significantly, reaching up to $4.9 billion, compared to $4.2 billion in the previous week.

Saudi Ministry of Commerce and Investment revealed in its recent statements that the level of profitability of the private sector is an important indicator that will boost confidence levels and increase investments in the country.

The positive figures announced by the Saudi Ministry come in line with recent figures published by Saudi companies listed in the local financial market. The numbers showed positive growth rates in listed companies during the first half of this year, compared to the profit levels of 2017.

The Ministry confirmed last week that companies and institutions operating in the Saudi market showed a 5.6 percent growth in profits during 2017 and a 1.7 percent revenue growth during the same year when compared with 2016.

Recent statistics of Qawaem, the electronic filing program of financial lists, showed that profit had been achieved in listed and non-listed companies and institutions of various sectors.

The report identified the sectors that saw the highest growth levels during 2017: management consultancy, machinery and equipment manufacturing, mining and recycling, natural gas, financial advisory, training, education, administrative facilities, maintenance and hygiene, agricultural activities and stores of pharmaceutical and medical supplies.

The Saudi economy, the largest in the Middle East, achieved a positive growth in the first quarter of this year, at 1.2 percent, a sign on the feasibility of economic reforms that are aimed at diversifying the economy and reducing oil dependency.

Saudi GDP rose 1.2 percent at the end of the first quarter to reach $172.7 billion compared to $170.7 billion during the same period last year, General Authority for Statistics (GAStat) data showed.

Non-oil GDP increased 1.6 percent by the end of the first quarter of this year, while non-oil governmental sector showed a 2.7 percent increase during same period.

GDP of the oil sector rose 0.6 percent to $72.8 billion compared to $72.4 billion of the first quarter of previous year.



Saudi Transport, Logistics Sector Set for 10% Growth in Q2

An investor monitors a trading screen at the Saudi financial market in Riyadh. (AFP)
An investor monitors a trading screen at the Saudi financial market in Riyadh. (AFP)
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Saudi Transport, Logistics Sector Set for 10% Growth in Q2

An investor monitors a trading screen at the Saudi financial market in Riyadh. (AFP)
An investor monitors a trading screen at the Saudi financial market in Riyadh. (AFP)

As Saudi companies start reporting their Q2 financial results, experts are optimistic about the transport and logistics sector. They expect a 10% annual growth, with total net profits reaching around SAR 900 million ($240 million), driven by tourism and an economic corridor project.

In Q1, the seven listed transport and logistics companies in Saudi Arabia showed positive results, with combined profits increasing by 5.8% to SAR 818.7 million ($218 million) compared to the previous year.

Four companies reported profit growth, while three saw declines, including two with losses, according to Arbah Capital.

Al Rajhi Capital projects significant gains for Q2 compared to last year: Lumi Rental’s profits are expected to rise by 31% to SAR 65 million, SAL’s by 76% to SAR 192 million, and Theeb’s by 23% to SAR 37 million.

On the other hand, Aljazira Capital predicts a 13% decrease in Lumi Rental’s net profit to SAR 43 million, despite a 44% rise in revenue. This is due to higher operational costs post-IPO.

SAL’s annual profit is expected to grow by 76% to SAR 191.6 million, driven by a 29% increase in revenue and higher profit margins.

Aljazira Capital also expects a 2.8% drop in the sector’s net profit from Q1 due to lower profits for SAL and Seera, caused by reduced revenue and profit margins.

Mohammad Al Farraj, Head of Asset Management at Arbah Capital, told Asharq Al-Awsat that the sector’s continued profit growth is supported by seasonal factors like summer travel and higher demand for transport services.

He predicts Q2 profits will reach around SAR 900 million ($240 million), up 10% from Q1.

Al Farraj highlighted that the India-Middle East-Europe Economic Corridor (IMEC), linking India with the GCC and Europe, is expected to boost sector growth by improving trade and transport connections.

However, he warned that companies may still face challenges, including rising costs and workforce shortages.