Dubai corporates outpace GCC listed peers

DFM-listed companies’ Q2 profit surges 32% to $6.1b

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Published: Thu 29 Aug 2024, 6:02 PM

Net profits for Dubai-listed companies rose 30.9 per cent year-on-year to $6.7 billion in sthe econd quarter of 2024 against $5.1 billion in Q2 2023, marking a growth far outpacing aggregate net profit surge of 5.7 per cent posted by listed corporates across the GCC.

Dubai reported the second-biggest y-o-y growth in profits (after Bahrain) during Q2 2024 mainly related to accounting adjustments and restructuring implemented by DSI.

Earnings growth in Q2 was mainly driven by Dubai-based banks, capital goods and telecom companies, with the three sectors accounting for 83.1 per cent of the total earnings during the quarter.

Junaid Ansari, head of Investment Strategy & Research at Kamco, said out of Dubai Financial Market’s 13 sectors, seven have witnessed a y-o-y increase in profits during Q2 2024 while the remaining six sectors, including the insurance and diversified financial sectors, reported declines.

In terms of first half performance, net profits increased by 20 per cent y-o-y to reach $12.1 billion as compared to $10 billion in the first half of 2023. Total net profits for the banking sector rose by 12 per cent y-o-y in Q2 2024 to reach $3.3 billion, up from $2.9 billion in Q2 2023. The sector’s profits in the first-half increased by 13.9 per cent y-o-y to reach $6.5 billion, up from $5.7 billion in 1H-2023.

The banking sector’s rise in total earnings was primarily driven by Emirates NBD which delivered a record H1 profit of Dh13.8 billion driven by 13.6 per cent y-o-y profits growth during Q2 2024. The bank’s Q2 2024 profits reached $1.9 billion compared with $1.7 million during the corresponding period of 2023, driven by increased lending across the bank’s regional network coupled with substantial impaired loan recoveries during the period. The sector’s total earnings were also supported by Emirates Islamic Bank which reported its highest ever half year profit that reached Dh1.7 billion during 1H-2024.

Aggregate profits for the capital goods sector jumped nearly 11 times during Q2 2024 to reach $1.2 billion as compared to $101.5 million in Q2 2023. The sector’s jump in net earnings was mainly due to profits reported by Drake and Scull, which announced $1.0 billion in Q2 2024 net profits as compared to $11.8 million loss in Q2 2023. The company reported its first positive near profits in over six years after restructuring its debts. On the other hand, National Central Cooling and Dubai Investment Company reported 4.5 per cent and 8.7 per cent y-o-y growth in net earnings that reached $42.7 million and $78.7 million, respectively.

Total net earnings for listed real estate stocks in Dubai increased by 29 per cent y-o-y in Q2 2024 to $1.1 billion as compared to $859.2 million in Q2 2023 after all the constituent companies that comprise the sector reported y-o-y growth in their net profits during the period. First-half net earnings for the sector witnessed 11.9 per cent y-o-y growth to reach $2.4 billion versus $ 2.1 billion in 1H-2023. “Emaar Properties’ robust performance was the primary driver of the sector’s strong performance during the period. Q2 2024 net profits for the company increased by 39 per cent y-o-y to reach $658.7 million as compared to $473.7 million in Q2 2023 while its 1H-2024 net profits edged up 8.0 per cent y-o-y to reach $1.5 billion. Listed companies in Abu Dhabi witnessed a 4.7 per cent y-o-y uptick in total net profits during Q2 2024 to reach $8.3 billion as compared to $7.9 billion during Q2 2023. On the other hand, total net profits declined by 2.2 per cent y-o-y during the first half of 2024 to reach $16.2 billion down from $16.5 in the first half of 2023.

Combined net profits reported companies listed on GCC exchanges witnessed a healthy y-o-y growth of 5.7 per cent during Q2 2024 led by a broad-based growth across most markets in the region, barring Oman. The q-o-q growth came in at 8.1 per cent with total net profits up for the second consecutive quarter to reach $60.7 billion during Q2 2024 as compared to $56.2 billion in Q1-2024 and $57.4 billion in Q2 2023.i