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Saudi Companies See Profit Growth

People are seen at Riyadh Park mall during the opening of a cinema, in Riyadh, Saudi Arabia April 30, 2018. REUTERS/Faisal Al Nasser/File Photo
People are seen at Riyadh Park mall during the opening of a cinema, in Riyadh, Saudi Arabia April 30, 2018. REUTERS/Faisal Al Nasser/File Photo
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Saudi Companies See Profit Growth

People are seen at Riyadh Park mall during the opening of a cinema, in Riyadh, Saudi Arabia April 30, 2018. REUTERS/Faisal Al Nasser/File Photo
People are seen at Riyadh Park mall during the opening of a cinema, in Riyadh, Saudi Arabia April 30, 2018. REUTERS/Faisal Al Nasser/File Photo

Around 16 Saudi firms listed in the local capital market have announced the fiscal results of Q4 2018.

The results showed a growth exceeding 5.7 percent, which makes it likely for other listed companies to achieve positive growth in the same period.

Giant Saudi companies would reveal fiscal outcomes of Q4 2018 during next week’s trading. The results will likely impact trading on the local market, deals and liquidity.

Tadawul All Shares Index on Thursday dropped 0.4 percent at the close of trade at 8,435 points, amid trading value of around SAR2.7 billion (USD720 million).

Meanwhile, the Saudi Arabian Monetary Authority (SAMA) said it lifted a ban on Saudi Enaya Cooperative Insurance Company (Enaya) to issue or renew insurance policies, starting Thursday. SAMA noted that its decision came after Enaya resolved the problems that had caused the ban.

There are forecasts that the Saudi companies’ fiscal results of Q4 2018 will be better compared to the same period in 2017. The Saudi economy is forecast to witness more growth in 2019, compared to last year.

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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)
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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.