Riyadh—Agencies

Gulf Cooperation Council (GCC) companies managed to achieve a 6 percent increase in profits in 2012 compared to 2011, with total revenues reaching $55.2 billion. In a recent report, the Kuwaiti Financial Center «Center» in a recent report issued in November of last year predicted that Gulf companies would record profits of $54.97 billion, representing 5 percent growth in 2012. The profit growth in 2012 is attributed to the strong performance of the financial services, real estate, and banking sectors.

Core Profits
Total net profits for the commodities sector reached $11.64 billion in 2012, a 6 percent decrease compared to the previous year, while the telecommunications sector’s profits continued to decline in 2012, falling by 3 percent. In contrast, the banking sector recorded profits of $22 billion in the same year, an 11 percent increase compared to the previous year, while the real estate sector achieved profits of $2.92 billion, a 58 percent increase, and the financial services sector saw a significant increase in profits, rising from $307 million in 2011 to $1.73 billion in 2012.
The growth in corporate profits in the Gulf Cooperation Council (GCC) countries in 2012 was driven by rising profits in Kuwait, the UAE, and Oman, where Emirati companies posted total net profits of $12.16 billion, a 25 percent increase compared to 2011, while Kuwaiti companies posted profits of $4.86 billion in 2012, a 22 percent increase compared to the previous year. During the same period, Omani companies« profits grew by 18 percent, reaching $1.65 billion, while Bahrain and Qatar recorded negative growth in corporate profits.

Significant increase
During the fourth quarter of 2012, corporate profits in the Gulf Cooperation Council (GCC) countries declined by 15 percent compared to the third quarter; however, compared to the fourth quarter of 2011, profits recorded a significant increase of 40 percent, with companies in all six countries contributing to this rise. The UAE and Bahrain saw the highest increases when comparing the fourth quarter to the third quarter of 2012, at 214 percent and 202 percent, respectively. During the same period, Bahraini companies also achieved a notable 73 percent growth in profits, while companies in Saudi Arabia and Qatar recorded declines in corporate profits of 27 percent and 11 percent, respectively. With the exception of the telecommunications sector, which saw a 33 percent decline in profits, all sectors achieved profit growth during the fourth quarter of 2012 compared to the same period in 2011, with the construction sector and the conglomerates and family businesses sector recording profit growth of 76% and 71%, respectively. With the exception of the financial services and real estate sectors, all sectors recorded a decline in profits during the fourth quarter of 2012 compared to the same period in 2011, with the telecommunications sector recording a 33 percent decline in profits.
Significant Changes
In the commodities sector, according to a report by the National Bank of Kuwait, significant changes began with precious metal prices, which fell by more than 12% and 16% in a single day, causing the market to focus entirely on gold and silver prices last week. In addition, the major market fluctuations affected a number of other commodities, as the price of a barrel of oil fell sharply during the week, with the price of a barrel of Brent crude reaching a low of $96.75, while the price of a barrel of crude oil fell to $85.61.