GCC Corporate Earnings - 3Q11

Kuwait Financial Centre “Markaz” R E S E A R C H

GCC Corporate Earnings – 3Q11 Earnings grow 18% backed by Saudi & Qatar

During 3Q11, GCC corporates posted a mixed set of numbers with overall

earnings growth of 18% when compared to 3Q10. Total earnings, which came

in at USD 13.7bn, were a decline of 3% over 2Q11. Corporate earnings were

driven by strong performance from Commodity companies and Banks.

Aggregate Net Profits from the Commodity sector were USD 3.5bn (+61%

YoY, +0% QoQ). Bank earnings grew 13% YoY but declined 9% sequentially

to USD 5bn. Telecom continued to drag overall earnings with bottom-line

drops of 23% YoY and 12% over the quarter. Most Telecom companies

attributed this decrease to foreign exchange losses. Real Estate sector

continued its recovery with aggregate net income coming in at USD 759mn.

Overall, year 2011 looks set to clock an earnings growth of 35% based on

current trends.

Figure: 1 – Earnings Trend – GCC – 3Q11

Source: Reuters Eikon, Markaz Research

Figure: 2 – Earnings Trend – GCC – Long-Term

*Estimate


46,985 50,323

65,403

33,162 34,378

40,897

55,276*

70%

7%

30%

-49%

4%

19%

35%

-60%

-40%

-20%

0%

20%

40%

60%

80%

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2005 2006 2007 2008 2009 2010 2011E

November 2011

Research Highlights:

Provides a review of corporate

earnings across the GCC up to

Q3 2011

Markaz Research is available

on:

Bloomberg - Type “MRKZ” <Go>

Thomson Research,

Reuters Knowledge

Nooz

Zawya Investor

ISI Emerging markets

Capital IQ

FactSet Research Connect

TheMarkets.com

M.R. Raghu CFA, FRM

Head of Research

+965 2224 8280

[email protected]

Layla Al-Ammar

Assistant Manager

+965 2224 8000 ext. 1205

[email protected]

Madhu Soothanan

Senior Research Analyst

+965 2224 8000 ext. 4603

[email protected]

Kuwait Financial Centre

S.A.K. “Markaz”

P.O. Box 23444, Safat 13095,

Kuwait

Tel: +965 2224 8000

Fax: +965 2242 5828

markaz.com

R E S E A R C H November 2011

Kuwait Financial Centre “Markaz”

2

3Q11 Earnings Earnings of Saudi Arabian companies totalled USD 6.9bn, an increase of 20%

YoY but decline of 2% QoQ. SABIC, which reported USD 2.2bn in 3Q profits,

led the growth which was driven by increased production and sales. Al Rajhi

Bank reported 18% YoY growth in net income to USD 516mn. Telecom

sector’s earnings fell 44% YoY to USD 576mn as Saudi Telecom’s earnings fell

53% to USD 417mn due to heavy foreign exchange losses.

Kuwait corporate earnings grew 3% YoY but dropped 7% sequentially. Banks

delivered a mixed set of numbers with overall earnings declining 13% over

the year but growing 5% over the quarter to USD 527mn. National Bank of

Kuwait reported a flat set of numbers with net income coming in at USD

285mn. The bank booked increased provisions this quarter which dragged its

earnings. Telecom companies saw their bottom-line decline to USD 309mn (-

11% YoY, -9% QoQ). Zain’s earnings declined 10% YoY to USD 253mn and

Wataniya’s earnings decreased 11% to USD 56mn. Both Zain and Wataniya

attributed the decrease to foreign exchange (FX) losses. Zain’s FX losses

totalled USD 100mn in the first nine months of 2011.

During 3Q11, UAE companies posted earnings of USD 2.3bn (3Q10: USD

2.1bn, 2Q11: USD 2.8bn). Banking sector profits grew 4% YoY, but declined

25% over the quarter to USD 1.4bn. Emirates NBD reported a 59% YoY

(QoQ: -77%) drop in net profit to USD 48mn due to restructurings at Dubai

Holding. NBAD reported 12% growth in net income to USD 281mn driven by

higher interest income. Real estate continued its recovery with profits of USD

168mn in 3Q11 (3Q10: USD -160mn, 2Q11: USD 12mn). Aldar properties

reported profits of USD 39mn, compared to USD 199mn loss in 3Q10 because

of revenue recognition from land sales and increased delivery. Emaar

properties continued its sluggish year with 34% drop in 3Q earnings to USD

111mn due to decreased revenue from property sales. While Etisalat reported

flat set of numbers with net profit of USD 468mn, Emirates Integrated

Telecom (Du) continued its outperformance with profits increasing 50% YoY

to USD 67mn due to strong customer addition.

Table 1: Earnings Growth – Sectoral Trend (USD mn)

1 2 3 3/1 3/2

Sector 3Q10 2Q11 3Q11 YoY QoQ

Banks 4,480 5,529 5,044 13% -9%

Telecommunications 2,150 1,866 1,648 -23% -12%

Commodities 2,176 3,498 3,494 61% 0%

Financial Services 234 123 167 -29% 35%

Real Estate (47) 414 759 N.M. 83%

Construction Related 485 705 476 -2% -32%

Conglomerates 284 369 403 42% 9%

Others 1,795 1,554 1,679 -6% 8%

Total 11,558 14,058 13,670 18% -3%


Qatar maintained its earnings momentum with USD 2.8bn in corporate profits,

a growth of 31% over 3Q10. The growth was led by commodities (+46%)

and banks (+17%). Industries Qatar’s earnings grew 46% over the year to

USD 570mn while earnings growth was flat on QoQ basis. YoY growth was

mainly on account of increased product prices. Bank earnings grew 17% YoY


Kuwait Financial Centre “Markaz”

3

and 2% sequentially to USD 1.1bn as major Qatari banks delivered positive

earnings growth. Telecom sector disappointed with earnings declining 16%

YoY and 17% over the quarter to USD 116mn. Q-Tel attributed the fall to

seasonal promotions and foreign exchange losses.

Oman’s corporate earnings declined 6% YoY to USD 364mn. However,

earnings showed a growth of 23% on QoQ basis. Banking sector’s earnings

grew to USD 163mn (+27% YoY, +74% QoQ). Bank Muscat’s net income of

USD 78mn was 19% higher on YoY basis 2% higher sequentially.

Bahrain’s corporate profits grew 65% YoY in 3Q11 to USD 265mn. However,

it was decline of 22% on sequential basis (Market Cap visibility at 94%). Bank

profits were up 7% over the year but down 24% sequentially to USD 200mn.

Bahrain Telecom continue to drag, with net income coming in at USD 47mn, a

drop of 8% YoY & 17% over the quarter

9M11 Earnings

On YTD basis, GCC corporate earnings grew 13% to USD 41.5bn. Saudi

Arabian companies posted total profit of USD 19.7bn an increase of 24% YoY.

The increase was mainly due to higher earnings reported by commodity

companies. Qatar and UAE also reported increased earnings during the nine

month period ending September 2011 led by commodities and banks. Net

income of Kuwaiti and Omani companies declined 21% and 26% respectively.

The drop in Kuwait earnings is because of one time gain booked by Zain

during 2Q10. Excluding the extraordinary items at Zain (2Q10) and Wataniya

(1Q11), Kuwaiti earnings grew 24% YTD.

Sectorally, commodities and banks boosted 9M11 earnings. Bank earnings

grew 18% while commodity earnings grew 55%. Real estate sector recovered

with profits increasing almost 2.5 times in the nine month period. Telecom

was the worst performing sector with bottom-line declining 27% to USD

6.1bn.



Table 2: YTD Country-wise Earnings Growth (USD mn)

Country 9M10 9M11 YoY

Saudi Arabia 15,865 19,671 24%

Kuwait 5,296 4,184 -21%

UAE 7,032 7,953 13%

Qatar 6,482 7,702 19%

Oman 1,370 1,011 -26%

Bahrain 778 936 20%

GCC Total 36,823 41,457 13%

Table 3: YTD Sector-wise Earnings Growth (USD mn)

Sector 9M10 9M11 YoY

Banks 13,399 15,814 18%

Telecommunications 8,374 6,142 -27%

Commodities 6,664 10,307 55%

Financial Services 572 509 -11%

Real Estate 506 1,723 241%

Construction Related 1,945 1,749 -10%

Conglomerates 870 1,122 29%

Others 4,493 4,091 -9%

Total 36,823 41,457 13%

GCC Corporate Earnings – 3Q11

2

GCC Market Cap Coverage at 97%

Country

Total market cap(USD Bn)

% Coverage

in terms of market cap

Total Number of Companies

Coverage based on no. of

companies

Saudi Arabia 327 100% 143 99%

Kuwait 102 96% 194 76%

U.A.E. 106 88% 110 81%

Qatar 123 100% 45 87%

Oman 17 99% 127 89%

Bahrain 15 94% 44 91%

GCC Total 695 97% 663 86%

• Market Capitalization-based coverage stood at 97% for all GCC countries.

• Qatar and Saudi Arabia topped with almost 100% coverage, followed by Oman at 99%.

• Earnings visibility (by number of companies) for the GCC region stood at 86% for 3Q11.

• Saudi Arabia’s coverage stood at 99% and Bahrain at 91%. Kuwait’s coverage, was the lowest at 76%.


3

GCC Corporate Earnings grow 18% YoY in 3Q11

• GCC corporate earnings were up 18% YoY in 3Q11 but declined 3% on a QoQ basis.

• Saudi Arabia and Qatar contributed to the earnings growth in GCC, mainly due to rising petrochemical/commodity prices.

• Oman saw its 3Q11 earnings decline 6% YoY.

GCC Corporate Earnings (USD Mn)


GCC 18 -3

YoY

(%)

65

QoQ

(%)

-6

31

9

3

20

-22

23

12

-16

-7

-2

13,591

11,558

4,748

13,729 14,058 13,670

-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011

Bahrain

Oman

Qatar

UAE

Kuwait

Saudi Arabia

4

Commodities and Banks drive YoY earnings growth

• In 3Q11, YoY earnings growth was driven by commodity companies. Commodity earnings grew 61% over the year but were flat over the quarter to reach USD 3.5bn as Oil prices have remained high through the year.

• Telecom sector dragged earnings with bottom-line drop of 23% YoY and 12% sequentially.

• Banks posted a mixed set of numbers with earnings growing 13% YoY but declining 9% over 2Q11.

Sectoral Earnings Trend (USD Mn)

-23

0


YoY

(%)

-6

QoQ

(%)

42

-2

N.M.

-29

61

8

9

-32

83

35

-12

13 -9

4,282 4,480 3,789 5,241 5,529 5,044

4,447 2,150

2,087

2,627 1,866 1,648

2,288

2,176 2,535

3,315 3,498 3,494

13,591

11,558

4,748

13,729 14,058 13,670

(6,000)

(1,000)

4,000

9,000

14,000

Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011

Others

Conglomerates

Construction Related

Real Estate

Financial Services

Commodities

Telecommunications

Banks

5

GCC 9M11 earnings grow 13%

• On YTD basis, GCC corporate earnings grew 13% to USD 41.5bn. Saudi and Qatar companies led with profits growing 24% and 19% respectively.

• The drop in Kuwait earnings is mainly on account of one time gain booked at Zain. Excluding the extraordinary items at Zain (2Q10) and Wataniya (1Q11), Kuwaiti earnings grew 24% YTD.

• Commodities and Banks boosted 9M11 earnings. Bank earnings grew 18% while commodity earnings grew 55%.

• Real estate sector recovered with earnings increasing almost 2.5 times in the nine month period.


YTD Country-wise Earnings Growth (USD mn)

Country 9M10 9M11 YoY

Saudi Arabia 15,865 19,671 24%

Kuwait 5,296 4,184 -21%

UAE 7,032 7,953 13%

Qatar 6,482 7,702 19%

Oman 1,370 1,011 -26%

Bahrain 778 936 20%

Total 36,823 41,457 13%

YTD Sector-wise Earnings Growth (USD mn)

Sector 9M10 9M11 YoY

Banks 13,399 15,814 18%

Telecommunications 8,374 6,142 -27%

Commodities 6,664 10,307 55%

Financial Services 572 509 -11%

Real Estate 506 1,723 241%

Construction Related 1,945 1,749 -10%

Conglomerates 870 1,122 29%

Others 4,493 4,091 -9%

Total 36,823 41,457 13%

Saudi Arabia – 3Q11

7

Commodity companies boost Saudi earnings

Quarterly Earnings Trend (USD Mn) Earnings Growth –YoY (%)

� Corporate profits rose 20% YoY in 3Q11 to USD 6.9bn.

� Commodity companies saw their earnings grow by 63%YoY while QoQ growth was flat. Bank earnings grew 29%YoY but recorded a 5% decline on QoQ basis.


5,376 5,726

5,072

5,779

7,020 6,871

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011

21%

20%

27%

21%

31%

20%

0% 10% 20% 30% 40%

Q2 2010

Q3 2010

Q4 2010

Q1 2011

Q2 2011

Q3 2011

8

Higher output drives SABIC’s bottom-line

�Commodities sector recorded earnings of USD 2.9bn in 3Q11, as against USD 1.8bn in 3Q10, led bySABIC’s strong performance. The company reported a record net income of USD 2.18bn (3Q10: USD1.42bn, 2Q11: USD 2.16bn), because of increased production and sales.

�Bank earnings grew 29% YoY to USD 1.7bn. Al Rajhi Bank reported an 18% growth in net income toUSD 516mn. However, overall Bank earnings declined 5% over 2Q11. Telecom sector’s earnings fell44% YoY to USD 576mn as Saudi Telecom’s earnings fell 53% to USD 417mn due to heavy foreignexchange losses.

Quarterly Sectoral Earnings Trend (USD Mn)


894 1,543 1,560 1,339 1,399 1,668 1,819 1,731

901 477 609 1,025 759 501

754 576

1,497 1,836 1,882 1,778 2,103

2,660

2,886 2,895

4,008

4,763

5,376 5,726

5,072

5,779

7,020 6,871

-500

500

1,500

2,500

3,500

4,500

5,500

6,500

7,500

Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011

Others

Conglomerates

Construction

RelatedReal Estate

Financial Services

Commodities

Telecommunication

s

9

Top companies – Sector – Growth Rate – 3Q11


Top Companies – Saudi Arabia – Commodities

Company Name

Market Cap

(USD mn) 3Q10 3Q11 Growth

Saudi Basic Industries Corporation 77,200 1,420 2,183 54%

Saudi Arabia Fertilizers Co. 12,433 161 323 100%

Saudi Kayan Petrochemical Company 7,180 -1 -9 NM

Yanbu National Petrochemicals Company 6,690 95 221 132%

Saudi Arabian Mining Co. (Ma'aden) 6,438 -0 7 NM

Saudi Industrial Investment Group 2,322 12 38 211%

Saudi International Petrochemichal Co. 1,960 22 56 148%

Sahara Petrochemical Company 1,552 18 26 42%

Advanced Polypropylene Company 1,041 32 36 12%

Total 1,16,817 1,760 2,880 64%

Top Companies – Saudi Arabia – Conglomerates

Company Name

Market Cap


Kingdom Holding Company 7,165 43 53 24%

National Industrialization Company 5,946 99 193 94%

Total 13,111 142 246 73%

Top Companies – Saudi Arabia – Telecom

Company Name

Market Cap


Saudi Telecom Company 17,920 884 417 -53%

Etihad Etisalat Company 9,613 303 326 8%

Saudi Mobile Telecommunications Co. 2,109 -145 -129 NM

Total 29,643 1,043 614 -41%

Top Companies – Saudi Arabia – Banking

Company Name

Market Cap

(USD mn)3Q10 3Q11 Growth

Al Rajhi Bank 27,600 437 516 18%

Samba Financial Group 11,520 294 303 3%

Riyad Bank 9,520 163 212 30%

Banque Saudi Fransi 7,926 166 203 22%

The Saudi British Bank 8,039 112 168 50%

Arab National Bank 6,188 92 138 50%

Alinma Bank 3,720 5 33 505%

The Saudi Investment Bank 2,361 40 38 -3%

Saudi Hollandi Bank 2,425 23 80 251%

Total 82,080 1,339 1,731 29%

Top Companies – Saudi Arabia – Others

Company Name

Market Cap


Saudi Electricity Company 14,944 618 580 -6%

Almarai Company 5,520 226 115 -49%

Kuwait – 3Q11

11

Earnings grow 3% YoY but drop 7% sequentiallyQuarterly Earnings Trend (USD Mn) Earnings Growth –YoY (%)

�At 96% market cap visibility, corporate earnings grew 3% YoYin 3Q11. However, there is a drop of 7% on sequential basis.

�Banks delivered a mixed set of numbers with overall earningsdeclining 13% over the year but growing 5% over the quarterto USD 527mn.


3,169

1,019

-784

2,008

1,128 1,048

-1,000

-500

-

500

1,000

1,500

2,000

2,500

3,000

3,500

Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011

104%

99%

N.M.

81%

-64%

3%

-100%-50% 0% 50% 100% 150%

Q2 2010

Q3 2010

Q4 2010

Q1 2011

Q2 2011

Q3 2011

12

Banking and Telecom deliver lackluster numbers

�In 3Q11, Telecom companies saw their bottom-line decline to USD 309mn (-11% YoY, -9% QoQ).Zain’s earnings declined 10% YoY to USD 253mn and Wataniya’s earnings decreased 11% to USD56mn.

�On a like-to-like basis, Financial services sector’s net income declined 76% YoY and 59% QoQ toUSD 34mn. Kuwait Projects Co Holding’s net income came in at USD 25mn (3Q10: USD 93mn,2Q11: USD 31mn)



50 454 431 605 528 571 503 527

-3,112

1,108

3,169

1,019 -784

2,008

1,128 1,048

-4,000

-3,000

-2,000

-1,000

-

1,000

2,000

3,000

4,000

Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011

Others Conglomerates Construction Related

Real Estate Financial Services Commodities

Telecommunications Banks

13


Note: Companies that have not declared their 3Q11 results on the date of

this report are marked as NA in the 3Q11 and 3Q10 columns.


Top Companies – Kuwait – Banking

Company Name

Market Cap


National Bank of Kuwait 16,506 278 285 2%

Kuwait Finance House KSC 8,657 93 91 -2%

Gulf Bank KSC 4,837 29 33 12%

Commercial Bank of Kuwait SAK 3,444 69 25 -64%

Boubyan Bank KSC 3,901 5 9 71%

Al Ahli Bank of Kuwait 3,514 54 41 -23%

Burgan Bank 2,570 13 58 355%

Bank of Kuwait & the Middle East KSC 3,422 24 18 -24%

Kuwait International Bank 1,044 28 10 -66%

Total 47,894 594 570 -4%

Top Companies – Kuwait – Financial Services

Company Name

Market Cap


Kuwait Projects Company Holding 1,621 93 25 -73%

National Investments Company 641 0 -10 NM

Aviation Lease & Finance Company 970 9 12 31%

Commercial Facilities Co 537 17 10 -40%

International Finance Company 298 NA NA NM

Kipco Asset Management Co 231 1 -9 NM

Kuwait Financial Centre 249 19 -6 NM

Global Investment House 229 NA NA NM

Total 4,777 140 23 -84%

Top Companies – Kuwait – Telecom

Company Name

Market Cap


Mobile Telecommunications Company KSC 14,655 282 253 -10%

National Mobile Telecom Co KSS 3,651 63 56 -11%

Total 18,306 345 309 -10%

Top Companies – Kuwait – Others

Company Name

Market Cap


Kuwait Food Company Americana KSC 2,194 28 31 13%

Mabanee Co SAKC 1,779 18 18 -3%

Agility 1,486 49 29 -40%

National Industries Group Holding SAK 1,256 26 20 -25%

Gulf Cable & Elect Industries Co KSC 1,152 7 7 9%

Total 7,867 128 106 -18%

United Arab Emirates – 3Q11

15

UAE Earnings fail to keep up the momentum

Quarterly Earnings Trend (USD Mn) Earnings Growth – YoY (%)

�At 88% market cap visibility, UAE corporate profitsincreased 9% YoY while dropping 16% over the quarter toUSD 2.3bn.

�Banking continued to dominate UAE earnings with ~58% ofthe country’s profit coming from that sector. While Bankingsector profits grew 4% YoY, it declined 25% sequentially toUSD 1.4bn.


2,048 2,135

-2,030

2,835 2,783 2,335

-3,000

-2,000

-1,000

-

1,000

2,000

3,000

4,000

Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011

-43%

-19%

NM

0%

36%

9%

-50% 0% 50%

Q2 2010

Q3 2010

Q4 2010

Q1 2011

Q2 2011

Q3 2011

16

UAE companies deliver mixed 3Q performance

�Emirates NBD reported a 59% YoY (QoQ: -77%) drop in net profit to USD 48mn due to restructuringsat Dubai Holding. NBAD and First Gulf Bank delivered 12% and 8% growth in their earnings on YoYbasis to USD 281mn and USD 251mn, respectively.

�Telecom companies delivered mixed performance. ETISALAT made a net profit of USD 469mn which isa fall of 1% on YoY basis while Emirates Integrated Telecom (Du) posted a 50% rise in net profit toUSD 67mn.

�Real Estate returned to positive earnings with USD 168mn in 3Q net profits.



76

1,487 1,116 1,303 972 1,639 1,800

1,354 498

596 556 528 772

563 500 528

564

2,849

2,048 2,135 -2,030

2,835 2,783 2,335

-4,000

-3,000

-2,000

-1,000

-

1,000

2,000

3,000

4,000

Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011

Others Conglomerates

Construction Related Real Estate

Financial Services Commodities


17



Top Companies – United Arab Emirates – Banking

Company Name

Market Cap


National Bank of Abu Dhabi 8,362 250 281 12%

First Gulf Bank PJSC 6,413 231 251 8%

Emirates NBD PJSC 5,176 115 48 -59%

Mashreqbank psc 3,439 53 56 6%

Abu Dhabi Commercial Bank PJSC 4,495 87 165 91%

Dubai Islamic Bank PJSC 2,068 73 81 11%

Union National Bank PJSC 2,039 125 134 7%

Commercial Bank of Dubai P.S.C. 1,565 70 69 -1%

National Bank of Fujairah PSC 1,243 13 21 58%

United Arab Bank PJSC 1,099 21 25 21%

Total 35,898 1,038 1,130 9%

Top Companies – United Arab Emirates – Real Estate

Company Name

Market Cap


Emaar Properties PJSC 4,611 167 111 -34%

Aldar Properties PJSC 824 -199 39 NM

Sorouh Real Estate PJSC 722 16 18 14%

Deyaar Development PJSC 381 -40 0 NM

Union Properties PJSC 290 NA NA NM

Total 6,827 -56 168 NM

Top Companies – United Arab Emirates – Telecom

Company Name

Market Cap


Emirates Telecom. Corp. 21,507 474 469 -1%

Emirates Integrated Telecom. Co. 3,672 44 67 50%

Total 25,179 518 536 3%

Top Companies – United Arab Emirates – Construction Related

Company Name

Market Cap


Arkan Building Materials Company 615 4 1 -83%

Arabtec Holding PJSC 562 2 11 475%

National Marine Dredging Company 537 15 32 107%

Drake & Scull International LLC 495 9 16 69%

Total 2,208 31 59 91%



Top Companies – United Arab Emirates – Others

Company Name

Market Cap


Dubai Financial Market PJSC 2,244 -1 -3 NM

Abu Dhabi National Energy Co. 1,983 59 146 146%

Dana Gas PJSC 953 9 39 333%

Total 5,179 68 183 170%

Qatar – 3Q11

19

Qatar – Steady Earnings


�Total profits grew 31% YoY to USD 2.8bn, aided bygrowth in Commodities and Banks. Net Income increased12% on a QoQ basis.

�Industries Qatar’s earnings grew 46% over the year toUSD 570mn and Qatar National Bank’s earnings grew 31%to USD 522mn.


2,206 2,128 2,183

2,427 2,490

2,786

-

500

1,000

1,500

2,000

2,500

3,000

Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011

18%

28%

-42%

13%

13%

31%

-60% -40% -20% 0% 20% 40%

Q2 2010

Q3 2010

Q4 2010

Q1 2011

Q2 2011

Q3 2011

20

Banking profits grow but Telecom disappoints in 3Q11

�Banking sector profits grew 17% YoY to USD 1.1bn as major Qatari banks delivered positive earnings growth. Telecom sector disappointed with earnings declining 16% YoY and 17% over the quarter to USD 116mn. QTel’s bottom-line declined 13% to USD 156mn due to forex losses.

�Profits of Real Estate companies more than doubled to USD 463mn due to a one time revaluation gain of USD 305mn booked by United Development Co. (UDC). UDC reported a net income of USD 406mn in 3Q11.



21

Top companies – Sector – Growth Rate –3Q11


Top Companies – Qatar – Banking

Company Name

Market

Cap


Qatar National Bank 25,612 398 522 31%

The Commercial Bank of Qatar Q.S.C. 5,675 140 152 9%

Qatar Islamic Bank (S.A.Q.) 5,250 84 112 33%

Masraf Al Rayan (Q.S.C.) 5,232 84 88 5%

Doha Bank (Q.S.C) 3,667 77 85 10%

Qatar International Islamic Bank QSC 2,257 40 50 23%

Al Khalij Commercial Bank QSC 1,682 60 30 -49%

Ahli Bank Q.S.C. 1,386 34 31 -9%

Total 50,761 917 1,069 17%

Top Companies – Qatar – Commodities

Company Name

Market Cap


Industries Qatar Q.S.C. 19,985 391 570 46%

Total 19,985 391 570 46%

Top Companies – Qatar – Real Estate Operations

Company Name

Market Cap


Ezdan Real Estate Company QSC 16,464 15 27 78%

Barwa Real Estate Company QSC 3,196 74 30 -59%

United Development Company P.S.C. 911 28 406 1338%

Total 20,570 117 463 295%

Top Companies – Qatar – Telecom

Company Name

Market Cap


Qatar Telecom (QTel) Q.S.C. 7,106 179 156 -13%

Vodafone Qatar QSC 1,732 -40 -40 NM

Total 8,838 139 116 -16%

Top Companies – Qatar – Others

Company Name

Market Cap


Qatar Electricity & Water Co. 3,875 100 103 3%

Aamal Company Q.S.C. 2,175 15 19 30%

Qatar Gas Transport Co. (NAKILAT) 2,639 47 67 42%

Qatar Fuel (WOQOD) Q.S.C. 2,765 84 79 -6%

Qatar Navigation Q.S.C. 2,444 50 46 -8%

Total 8,689 162 189 17%

Oman – 3Q11

23

Earnings recover on QoQ basis

Quarterly Earnings Trend (USD Mn)Earnings Growth –YoY (%)

�Oman’s corporate earnings declined 6% YoY to USD364mn. However, earnings showed a healthy growthof 23% on QoQ basis.

�Banking profits increased 27% over the year and74% over the quarter to USD 163mn.


526

389

455

350

297

364

-

100

200

300

400

500

600

Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011

7%

14%

106%

-23%

-44%

-6%

-100% -50% 0% 50% 100% 150%

Q2 2010

Q3 2010

Q4 2010

Q1 2011

Q2 2011

Q3 2011

24

Banking drives Oman’s earnings in 3Q11


�Almost all banks showed positive earnings growth in 3Q11. Bank Muscat’s net profit was up 16% YoY in 3Q to USD 78mn while Bank Dhofar’s third quarter earnings came in at USD 27mn, a growth of 34%

�Oman Telecommunications reported a net income of USD 71mn (+19% YoY, - 5% QoQ). Earnings of Financial services companies halved on YoY basis but more than doubled on QoQ basis to USD 32mn.


41

134 130 129 138 150 94

163 50

84 159

60 73 68

75

73

5

62

29

63

107

19

15

33

39

45

66

43

34

37

33

25

221

455

526

389

455

350

297

364

-

100

200

300

400

500

600

Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011

Others Conglomerates

Construction Related Real Estate

Financial Services Commodities


25





Top Companies – Oman – Construction Related

Company Name

Market Cap


Raysut Cement Company SAOG 463 14 7 -48%

Oman Cement Company SAOG 391 12 6 -48%

Galfar Engineering & Contracting Co. 337 5 2 -65%

Oman Cables Industry 163 5 3 -34%

Total 1,354 35 18 -48%

Top Companies – Oman – Telecom

Company Name

Market Cap


Oman Telecommunications Company 2,320 60 71 19%

Total 2,320 60 71 19%

Top Companies – Oman – Real Estate Operations

Company Name

Market Cap


Sahara Hospitality Company SAOG 36 1 1 3%

Total 36 1 1 3%

Top Companies – Oman – Banking

Company Name

Market Cap


BankMuscat (SAOG) 2,884 65 78 19%

Bank Dhofar 1,239 20 27 34%

National Bank of Oman 884 18 26 44%

Oman International Bank SAOG 702 10 10 2%

Ahli Bank 529 9 12 30%

Bank Sohar SAOG 397 6 10 80%

Total 6,634 129 163 27%

Bahrain – 3Q11

27

Bahrain’s corporate profits grow 65% YoY


�Bahrain’s corporate profits grew 65% YoY in 3Q11 toUSD 265mn. However, it declined 22% on sequentialbasis.

�Banking sector registered profits of USD 200mncompared to USD 187mn in 3Q10 and USD 264mn in2Q11.


266

161

-149

331 339

265

-200

-100

-

100

200

300

400

Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011

39%

-27%

N.M.

-6%

28%

65%

-50% 0% 50% 100%

Q2 2010

Q3 2010

Q4 2010

Q1 2011

Q2 2011

Q3 2011

28

Banking and Telecom disappoint in 3Q

�Bank profits were up 7% over the year but down 24% sequentially to USD 200mn.

�Telecom sector, represented by Bahrain Telecommunications, continue to drag Bahrain’s earnings. The company’s net income was USD 47mn in 3Q11, a drop of 8% YoY & 17% over the quarter.



-131

230 209 187

-96

236 264 200

68

65 59 51

55

46 56

47

-654

351 266

161

-149

331 339

265

-800

-600

-400

-200

-

200

400

Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011

Others Conglomerates Construction Related

Real Estate Financial Services Commodities


29





Top Companies – Bahrain – Banking

Company Name

Market Cap


Ahli United Bank B.S.C 3,639 65 79 21%

Arab Banking Corporation (B.S.C.) 1,306 37 41 11%

National Bank of Bahrain BSC 1,327 29 31 10%

Al Baraka Banking Group BSC 1,009 29 33 14%

United Gulf Bank B.S.C. 660 10 1 -93%

BBK B.S.C. 903 21 11 -49%

Ithmaar Bank B.S.C. 188 7 -2 NM

Al Salam Bank BSC 179 3 3 5%

Bahrain Islamic Bank B.S.C. 224 -11 1 NM

Khaleeji Commercial Bank B.S.C. 132 -2 1 NM

The Bahraini Saudi Bank BSC 86 0 1 172%

Total 9,653 187 200 7%

Top Companies – Bahrain – Telecom

Company Name

Market Cap


Bahrain Telecommunications Company 1,505 51 47 -8%

Total 1,505 51 47 -8%

Top Companies – Bahrain – Financial Services

Company Name

Market Cap


TAIB Bank B.S.C. 307 -8 -3 NM

Gulf Finance House BSC 140 -115 3 NM

Securities and Investment Co. BSC 229 2 -2 NM

Esterad Investment Company BSC 49 2 -3 NM

BMB Investment Bank BSC 44 2 -1 NM

Total 769 -117 -5 NM

30

Annual Results Saudi Earnings (USD Mn)

Kuwait Earnings (USD Mn)

GCC Earnings (USD Mn)


31

Annual Results

Oman Earnings (USD Mn) Bahrain Earnings (USD Mn)

UAE Earnings (USD Mn)Qatar Earnings (USD Mn)





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Documents

GCC Corporate Earnings - 3Q11