gcc corporate earnings - 1q11

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

GCC Corporate Earnings-Q1-2011 Earnings surge by 19% backed by Kuwait &

Saudi As of third week of May 2011, we have 96% visibility in terms of market cap and 78% visibility in terms of number of companies to measure the performance of GCC corporate earnings. Qatar enjoys nearly 100% market capitalization visibility, closely followed by Saudi Arabia with 99% visibility. Bahrain’s visibility at 70% is the lowest in GCC region.

During 1Q11, GCC corporates posted a good set of numbers with earnings growth of 19% when compared to 1Q10. Total earnings, which came in at USD 13.8bn, were more than double the profits posted during the previous quarter (4Q10). The highest growth was in Kuwait which saw a sharp rebound in earnings, coming in at USD 2.1 bn, a near doubling from 1Q10. Saudi earnings held strong, with a 23% growth while UAE was flat. Corporate earnings were driven by strong performances from Commodity companies and Banks. The region’s continued dominance as a petrochemical hub, global recovery, low cost advantages and spikes in commodity prices augured well for companies across the region. Aggregate Net Profits from the Commodity sector were USD 3.3bn (+51% YoY, +28% QoQ). Amongst other sectors, Banking continued to deliver the highest profits, at USD 5.2bn. Robust demand and access to low cost funds improved spreads in this quarter. Telecom sector registered 50% YoY growth in net income due to Wataniya’s one time fair value gain of USD 962mn, following revaluation of interest in Tunisiana. Excluding Wataniya’s one-time gain, the sector’s earnings fell 5% YoY. Real Estate sector recovered from the slump experienced over the last few quarters.

Figure: 1 – Earnings trend – GCC

May 2011 Research Highlights: Provides a review of corporateearnings across the GCC. Markaz Research is available on: Bloomberg - Type “MRKZ” <Go> Thomson Research, Reuters Knowledge Nooz Zawya Investor ISI Emerging markets 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. 4203 [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

Source: Reuters Eikon, Markaz Research

R E S E A R C H May 2011

Kuwait Financial Centre “Markaz”

2

Earnings of Saudi Arabian companies totaled USD 5.8bn, an increase of 23% YoY and 9% QoQ. SABIC, which reported USD 2bn in 1Q profits, led the growth which was driven by higher volumes and prices. Al Rajhi Bank reported flat numbers with net income of USD 453mn. Saudi Telecom’s net profit declined 11% YoY to USD 419mn. The drop in net profit is mainly on account of higher other non-operating expenses in this quarter. Kuwait recorded strong earnings growth this quarter on the back of sluggish last quarter performance. Corporate earnings grew 98% YoY, supported by recovery in the financials, commodities and telecom. Telecom sector growth was driven by one time gain of USD 962mn at Wataniya in addition to support from Zain’s 42% YoY net income growth. However, Zain’s bottom line was 19% lower than 4Q10 number due to foreign exchange losses. Although Kuwait’s Banking sector profits were almost flat over the quarter, YOY growth was at a healthy 41%. National Bank of Kuwait registered net income growth of 11% YoY to USD 291mn. During 1Q11, UAE posted earnings of USD 2.8bn as against a loss of USD 1.7bn in 4Q10. Real Estate recovery and profits from Banks led earnings recovery in UAE. Bank earnings, at USD 1.7bn, were higher by 11% on YoY basis and 68% on QoQ basis. Abu Dhabi Commercial Bank and Emirates NBD led the growth in 1Q11 with their earnings growing by 163% and 27% over 1Q10. NBAD’s profits were down 10% YoY due to higher provisions booked by the bank. Real Estate recovery in UAE was led by profits of USD 51mn at Aldar properties after its loss of USD 3.5bn in 2010. Emaar Properties’ bottom line came in at USD 115mn, down 45% YoY due to lower deliveries. Qatar maintained its earnings momentum with USD 2.4bn in corporate profits, a growth of 13% over 1Q10. Here again, the growth was led by commodities (+72% YoY, +38% QoQ) and banks. Industries Qatar delivered a strong set of numbers with net income of USD 575mn. Higher volumes and improved demand proved beneficial for the company. Bank earnings grew 24% YoY to USD 977mn. Qatar National Bank grew its earnings by 35% YoY and 10% over the quarter. QNB’s net income of USD 469mn was driven by lower cost of funds and higher NIMs.

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

Sector 1Q10 4Q10 1Q11 YoY QoQ

Banks 4,532 3,856 5,163 14% 34%

Telecommunications 1,747 2,087 2,627 50% 26%

Commodities 2,199 2,588 3,314 51% 28%

Financial Services 557 -48 380 -32% N.M.

Real Estate 422 -3,672 579 37% N.M.

Construction Related 667 371 561 -16% 51%

Conglomerates 304 341 327 8% -4%

Others 1,141 983 834 -27% -15%

Total 11,569 6,506 13,786 19% 112%



Kuwait Financial Centre “Markaz”

3

Oman’s corporate earnings declined 26% YoY basis and 34% on QoQ basis to USD 338mn as political turmoil has rattled the Sultanate. Banking sector’s earnings were stable at USD 147mn (+10% YoY, +6% QoQ). Bank Muscat’s net income of USD 72mn was 14% higher on YoY basis but a decline of 5% over 4Q10. Oman Telecom’s earnings also proved to be a drag with profits down 20% YoY and 7% QoQ. Bahrain’s corporates came back from red to register USD 315mn of profits in 1Q11 (Market Cap visibility at 70%). However, profits were 10% lower when compared on YoY basis. The recovery is led by increase in bank profits over the quarter. On like-to-like basis, bank earnings more than tripled over last quarter. Ahli United Bank grew its earnings over the year by 18% to USD 77mn. Net income of Bahrain Telecom suffered, declining 28% YoY and 16% over the quarter.

GCC Statistics – 1Q11

2

GCC Market Cap Coverage at 96%

Country

Total market cap(USD Bn)

% Coveragein terms of market

capTotal Number of Companies

Coverage based on no. of

companies

Saudi Arabia 350 99% 143 87%

Kuwait 110 96% 194 71%

U.A.E. 111 88% 110 80%

Qatar 116 100% 45 84%

Oman 17 93% 127 74%

Bahrain 23 70% 44 86%

GCC Total 726 96% 663 78%

• Market Capitalization-based coverage stood at 96% for all GCC countries.• Qatar topped with 99.7% coverage, followed by Saudi Arabia at 99%, and Kuwait at 96%.• Earnings visibility (by number of companies) for the GCC region stood at 78% for 1Q11. • Saudi Arabia’s coverage stood at 87% and Bahrain at 86%. Kuwait’s coverage, was the lowest at

71%.


YoY

(%)

-10

QoQ

(%)

-26

13

-1

98

23

N.M.

-34

-3

N.M.

N.M.

9

3

GCC Corporate Earnings grow 19% YoY in 1Q11

• GCC corporate earnings were up 19% YoY in 1Q11 and more than doubled on a QoQ basis. • Saudi Arabia, Kuwait and Qatar contributed to the earnings growth in GCC, mainly due to rising

petrochemical/commodity prices. • Bahrain and Oman saw their 1Q11 earnings decline 10% and 26% YoY, respectively.

GCC Corporate Earnings (USD Mn)

GCC 19 112


4,520

11,569

13,668

11,451

6,506

13,786

-6,000

-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

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

Bahrain

Oman

Qatar

UAE

Kuwait

Saudi Arabia

4

Commodities Drive GCC Earnings

• In 1Q11, earnings growth was driven by commodity companies. Commodity earnings grew 51% over the year and 28% over the quarter to reach USD 5.2bn as oil prices spiked during the quarter.

• The Telecom sector registered 50% YoY growth due to Wataniya’s one time fair value gain of USD 962mn following revaluation of interest in Tunisiana. Excluding Wataniya’s one time gain, the sector’s earnings fell 5% YoY.

• Banks, however, posted a steady set of numbers with earnings growing 34% YoY and 14% over 1Q10.

Sectoral earnings trend (USD Mn) YoY

(%)-27

QoQ

(%)

8

-16

37

-32

51

-15

-4

51

N.M.

N.M.

2650

14

28

34


1,505

4,532 4,223 4,388 3,856 5,163 1,663

1,747 4,445

2,150 2,087

2,627

1,810

2,199

2,225

2,176 2,588

3,314

4,520

11,569

13,668

11,451

6,506

13,786

(3,500)

(1,500)

500

2,500

4,500

6,500

8,500

10,500

12,500

14,500

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

Others

Conglomerates

Construction Related

Real Estate

Financial Services

Commodities

Telecommunications

Banks

Saudi Arabia – 1Q11

6

Saudi Earnings Get a Commodities Boost Yet Again..Quarterly Earnings Trend (USD Mn) Earnings Growth –YoY (%)

Corporate profits rose 23% YoY in 1Q11 to USD 5.8bn.

Commodity companies saw their earnings grow by 45%YoY and 24% QoQ, led by SABIC which registered a 42%earnings growth over 1Q10. Bank earnings grew 8% andTelecom earnings saw 5% growth over 1Q10.


N.M.

68%

24%

19%

34%

23%

0% 20% 40% 60% 80%

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

3,941

4,694

5,420 5,609 5,297

5,757

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

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

7

Higher Petchem Prices Drive SABIC’s Earnings

Commodities sector recorded earnings of USD 2.7bn in 1Q11, as against USD 1.8bn in 1Q10, led bySABIC’s strong performance. The company reported a net income of USD 2bn (1Q09: USD 1.5bn), ashigher petrochemical prices boosted company’s performance.

Bank earnings grew a modest 8% YoY to USD 1.7bn. Al Rajhi Bank reported a flat set of numberswith a net income of USD 453mn. Telecom sector’s earnings fell 34% QoQ to USD 501mn, but wereup 5% on a YoY basis. Saudi Telecom’s earnings fell 31% QoQ and 11% YoY to USD 419mn.

Quarterly Sectoral Earnings Trend (USD Mn)


8

Top companies – Sector – Growth Rate – 1Q11


Top Companies – Saudi Arabia – Banking

Company NameMarket Cap(USD mn) 1Q10 1Q11 Growth

Al Rajhi Bank 31,100 449 453 1%Samba Financial Group 13,620 323 299 -7%Riyad Bank 10,560 183 198 8%Banque Saudi Fransi 9,296 190 191 0%The Saudi British Bank 9,000 166 200 21%Arab National Bank 7,888 169 157 -7%Alinma Bank 3,940 -20 19 NMThe Saudi Investment Bank 2,963 6 55 896%Saudi Hollandi Bank 2,611 61 63 3%Bank Albilad 1,568 14 15 5%Bank Aljazira 1,488 3 17 394%Industry Total 94,033 1,543 1,668 8%

Top Companies – Saudi Arabia – Commodities


Saudi Basic Industries Corporation 84,200 1,449 2,050 42%Saudi Arabia Fertilizers Co. 12,500 186 222 19%Saudi Kayan Petrochemical Company 7,440 -1 -2 NMYanbu National Petrochemicals Company 7,230 69 191 177%

Saudi Arabian Mining Company (Ma'aden) 6,068 6 12 112%Saudi Industrial Investment Group 2,784 38 62 64%Saudi International Petrochemichal Co. 2,176 22 32 49%Sahara Petrochemical Company 1,791 31 27 -14%Advanced Polypropylene Company 1,165 14 35 149%Saudi Chemical Company 762 20 23 15%Industry Total 126,115 1,833 2,652 45%

Top Companies – Saudi Arabia – Conglomerates


Kingdom Holding Company 8,993 20 24 21%National Industrialization Company 5,000 89 155 74%Industry Total 13,993 109 179 64%

Top Companies – Saudi Arabia – Telecom


Saudi Telecom Company 20,533 473 419 -11%Etihad Etisalat Company 9,613 190 266 40%Saudi Mobile Telecommunications Company 2,576 -177 -142 NMIndustry Total 32,723 486 544 12%

Kuwait – 1Q11

10

Kuwaiti Companies Register Healthy ProfitsQuarterly Earnings Trend (USD Mn) Earnings Growth –YoY (%)

Corporate profits grew 98% YoY in 1Q11, supported byrecovery in the banking, commodities and telecom.

In 1Q11, National Mobile Telecom Co (Wataniya) booked aone time fair value gain of USD 962mn, due to revaluation ofinterest in Tunisiana following increase in shareholding to75%, which boosted earnings. Excluding these gains,Telecom sector earnings recorded a decline of 19% QoQ.

-3,326

1,078

3,302

1,023

6

2,137

-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

N.M.

585%

110%

101%

N.M.

98%

0% 200% 400% 600% 800%

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011


11

Financial Services and Real Estate - Back to Profits

In 1Q11, Financial Services sector registered profits of USD 83mn, versus a loss of USD 263mn in4Q10. Real Estate also recovered from a USD 348mn loss in 4Q10 to USD 40mn profits in 1Q11.

Banking sector earnings were at USD 489mn, a growth of 41% YoY but a decline of 2% QoQ.National Bank of Kuwait’s earnings came in at USD 291mn, a 11% growth YoY.



12


Note: Companies that have not declared their 1Q11 results on the date of this report are marked as NA in the 1Q11 and 1Q10 columns.


Top Companies – Kuwait – Banking


National Bank of Kuwait 16,278 263 291 11%

Kuwait Finance House KSC 10,309 106 82 -23%Gulf Bank KSC 4,625 2 35 NM

Commercial Bank of Kuwait SAK 4,324 -5 5 NM

Boubyan Bank KSC 3,541 6 8 37%Al Ahli Bank of Kuwait 3,172 53 59 12%

Burgan Bank 2,528 4 43 NMBank of Kuwait & the Middle East KSC 2,934 21 31 43%

Kuwait International Bank 1,163 1 11 NMIndustry Total 48,874 450 564 25%

Top Companies – Kuwait – Financial Services


Kuwait Projects Company Holding 1,630 7 29 314%National Investments Company 869 12 -4 NMBoubyan Petrochemical Company 875 17 6 -66%Aviation Lease & Finance Company 987 8 78 NMCommercial Facilities Co 726 18 12 -34%International Finance Company 428 -3 -7 NMSecurities House 319 NA NA NAKipco Asset Management Co 271 4 1 -78%Kuwait Financial Centre 242 13 -3 NMGlobal Investment House 195 -49 -79 NMIndustry Total 6,543 15 32 111%

Top Companies – Kuwait – Telecom


Mobile Telecommunications Company KSC 20,564 177 252 42%National Mobile Telecom Co KSS 3,208 56 1,028 NMIndustry Total 23,772 233 1,280 NM

United Arab Emirates – 1Q11

14

Earnings positive after a poor showing in 4Q10Quarterly Earnings Trend (USD Mn) Earnings Growth – YoY (%)

UAE corporate profits were almost flat YoY but increasedto USD 2.8bn, against a loss of USD 1.7bn in 4Q10.

Real Estate recovered from 2010 losses to register profitsof USD 223mn for the quarter. Real Estate earnings grew44% YoY, led by recovery in Aldar Properties’ earnings.


574

2,844

2,209 2,129

-1,683

2,816

-2,000

-1,500

-1,000

-500

-

500

1,000

1,500

2,000

2,500

3,000

3,500

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

201%

-1%

-40%

-20%

N.M.

-1%

-100% 0% 100% 200% 300%

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

15

Banking and Real Estate Lead the Growth

In 1Q11, Banking profits grew 11% YoY to USD 1.7bn. On QoQ basis, Bank profits were up 68%. AbuDhabi Commercial Bank and Emirates NBD led the growth in 1Q11 with their earnings growing by163% and 27% over 1Q10.

Telecoms were a drag on earnings, declining 6% on YoY basis and 27% on QoQ basis. EmiratesTelecom’s (Etisalat) net profit this quarter was USD 495mn (4Q10:USD 551mn, 1Q10:USD 543mn).

Construction sector also showed a slow down with earnings of USD 82mn, a 49% YoY decline.Arabtec’s 1Q11 earnings (USD 7mn) was 80% lower than its 1Q10 earnings.



16



Top Companies – United Arab Emirates – Banking


National Bank of Abu Dhabi 7,581 281 252 -10%First Gulf Bank PJSC 6,535 250 238 -5%Emirates NBD PJSC 5,009 302 385 27%Mashreqbank psc 3,439 68 72 6%Abu Dhabi Commercial Bank PJSC 3,248 60 156 163%Dubai Islamic Bank PJSC 2,295 54 60 11%Union National Bank PJSC 1,971 103 124 20%Commercial Bank of Dubai P.S.C. 1,586 70 72 2%National Bank of Fujairah PSC 1,078 10 14 33%United Arab Bank PJSC 1,533 18 17 -7%Industry Total 34,277 1,217 1,391 14%

Top Companies – United Arab Emirates – Real Estate


Emaar Properties PJSC 5,358 207 115 -45%Aldar Properties PJSC 1,201 -86 51 NMSorouh Real Estate PJSC 972 35 18 -50%Deyaar Development PJSC 378 -27 7 NMUnion Properties PJSC 279 14 22 64%Ras Al Khaimah Properties PJSC 212 12 10 -17%Industry Total 8,399 155 223 44%

Top Companies – United Arab Emirates – Telecom


Emirates Telecommunications Corporation 22,283 543 495 -9%Emirates Integrated Telecomm. Co. PJSC 3,934 26 56 112%Industry Total 26,216 569 551 -3%

Top Companies – United Arab Emirates – Construction Related


Arkan Building Materials Company 782 5 3 -52%Arabtec Holding PJSC 550 37 7 -80%National Marine Dredging Company 590 31 26 -16%Drake & Scull International LLC 640 11 12 9%Gulf Cement Company P.S.C. 295 16 -5 NMNational Cement Company PSC 305 6 4 -27%Union Cement Company P.S.C. 237 -3 -3 NMFujairah Cement Industries PSC 100 0 -1 NMTamweel PJSC 270 1 7 431%Industry Total 3,769 105 52 -51%

Qatar – 1Q11

18

Qatar – Steady EarningsQuarterly Earnings Trend (USD Mn) Earnings Growth –YoY (%)

Total profits grew 13% YoY to USD 2.4bn, fueled bystrong growth in Commodities.

Net profit of Industries Qatar grew 72% over the yearand 38% over the quarter to USD 575mn.


3,743

2,148 1,957

2,141 2,488 2,423

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

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

195%

17%

5%

30%

-34%

13%

-100% 0% 100% 200% 300%

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

19

Commodities, Banks Drive Earnings in 1Q11

Banking sector profits grew 24% YoY to USD 977mn as all major Qatari banks saw earnings growth. Qatar National Bank led the way with a 35% growth over 1Q10 and 10% over 4Q10.

Profits of Real Estate companies grew 84% YoY but declined 20% when compared on QoQ basis. Telecom sector results were also mixed with 42% decline on YoY basis due to decline in Qatar Telecom’s profits by 37%.



20

Top companies – Sector – Growth Rate –1Q11


Top Companies – Qatar – Banking

Company Name

Market Cap

(USD mn) 1Q10 1Q11 GrowthQatar National Bank SAQ 19,177 348 469 35%The Commercial Bank of Qatar Q.S.C. 5,233 113 123 9%Qatar Islamic Bank (S.A.Q.) 5,257 82 88 7%Masraf Al Rayan (Q.S.C.) 4,593 83 90 9%Doha Bank (Q.S.C) 3,333 87 100 15%Qatar International Islamic Bank QSC 1,715 39 44 13%Al Khalij Commercial Bank QSC 1,869 16 33 105%Ahli Bank Q.S.C. 1,245 21 32 49%Industry Total 42,423 788 977 24%

Top Companies – Qatar – Commodities


Industries Qatar Q.S.C. 20,725 334 575 72%Industry Total 20,725 334 575 72%

Top Companies – Qatar – Telecom


Qatar Telecom (QTel) Q.S.C. 6,560 333 209 -37%Industry Total 6,560 333 209 -37%

Top Companies – Qatar – Real Estate Operations


Ezdan Real Estate Company QSC 17,121 20 10 -49%Barwa Real Estate Company QSC 3,832 58 151 162%United Development Company P.S.C. 992 31 39 25%Industry Total 21,944 108 200 84%

Oman – 1Q11

22

1Q11 Earnings Decline as unrest rattles countryQuarterly Earnings Trend (USD Mn) Earnings Growth –YoY (%)

Oman’s corporate earnings declined 26% YoY to USD338mn. Earnings declined 34% on QoQ basis. Themarket lost 9% for the quarter as political unrestswept the Sultanate

Financial services sector dampen earnings, declining66% YoY and 85% on QoQ basis.


221

455

526

388

516

338

-

100

200

300

400

500

600

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

736%

-49%

7%

14%

133%

-26%

-200% 0% 200% 400% 600% 800%

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

23

Banking Profits Steadied Oman’s earnings in 1Q11Quarterly Sectoral Earnings Trend (USD Mn)

Bank earnings were steady at USD 147mn, a growth of 10% over the year and 6% over the quarter. Although Bank Muscat’s earnings grew 14% YoY to USD 72mn, it was a decline of 5% on QoQ basis.

Decline in Net Income of Oman Telecommunications dragged Telecom sector earnings, down 20% YoY and 7% QoQ. Constructed-related sectors also posted negative growth of 24% on YoY basis. Profits of Raysut Cement and Oman cement declined 27% and 42% respectively.


24




Top Companies – Oman – Construction Related


Raysut Cement Company SAOG 566 18 13 -27%Oman Cement Company SAOG 490 18 11 -42%Galfar Engineering & Contracting Co. 267 -2 4 NMOman Cables Industry 245 NA NA NAIndustry Total 1,568 38 27 -29%

Top Companies – Oman – Telecom


Oman Telecommunications Company 2,143 84 68 -20%Industry Total 2,143 84 68 -20%

Top Companies – Oman – Real Estate Operations


Sahara Hospitality Company SAOG 36 1 1 8%Industry Total 36 1 1 8%

Top Companies – Oman – Banking


BankMuscat (SAOG) 2,763 64 72 14%Bank Dhofar 1,579 23 24 6%National Bank of Oman 899 17 20 18%Oman International Bank SAOG 648 15 12 -22%Ahli Bank 604 8 10 28%Bank Sohar SAOG 395 7 8 8%Muscat Finance Company Limited 86 2 2 17%Industry Total 4,209 72 77 6%

Bahrain – 1Q11

26

Bahrain’s Corporate Earnings Recover in 1Q11Quarterly Earnings Trend (USD Mn) Earnings Growth –YoY (%)

After a bad 4Q10, Bahrain’s corporate earnings cameback to profits in 1Q11. Corporate earnings were at USD694mn, a decline of 10% YoY.

Banking sector registered profits of USD 233mncompared to a loss of USD 96mn in 4Q10. The sector’searnings were flat when compared on YoY basis.


N.M.

-1%

32%

-27%

N.M.

-10%

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

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

-633

350 253

161

-119

315

-800

-600

-400

-200

-

200

400

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

27

Banking Recovers, Telecom Still a Drag

Telecom sector, represented mainly by Bahrain Telecommunications, continue to drag Bahrain’s earnings. The company’s net income was USD 46mn in 1Q11, a drop of 28% YoY.

On a like-to-like basis, Financial services sector earnings were down 72% YoY and 88% QoQ.



28




Top Companies – Bahrain – Banking


Ahli United Bank B.S.C 3,564 66 77 18%Arab Banking Corporation (B.S.C.) 1,773 41 48 17%National Bank of Bahrain BSC 1,486 35 36 3%Al Baraka Banking Group BSC 1,104 28 31 11%United Gulf Bank B.S.C. 928 8 5 -36%BBK B.S.C. 1,016 33 31 -6%Ithmaar Bank B.S.C. 322 NA NA NAAl Salam Bank BSC 274 11 -2 NMBahrain Islamic Bank B.S.C. 396 3 4 25%Khaleeji Commercial Bank B.S.C. 153 1 2 26%The Bahraini Saudi Bank BSC 86 1 1 52%Industry Total 11,102 230 233 1%

Top Companies – Bahrain – Telecom


Bahrain Telecommunications Company 1,856 65 46 -28%Industry Total 1,856 65 46 -28%

Top Companies – Bahrain – Financial Services


TAIB Bank B.S.C. 307 -10 -3 NM

Gulf Finance House BSC 237 NA NA NA

Securities and Investment Co. BSC 229 3 -2 NM

Esterad Investment Company BSC 90 -3 -4 NM

BMB Investment Bank BSC 44 2 1 -48%

Industry Total 1,817 -16 -8 NM

29

Annual Results Saudi Earnings (USD Mn)

Kuwait Earnings (USD Mn)

GCC Earnings (USD Mn)

11,731

9,258

16,529

-2,031 -489

5,808

-5,000

-

5,000

10,000

15,000

20,000

2005 2006 2007 2008 2009 2010


47,239 50,157

64,736

33,044 34,361

41,990

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2005 2006 2007 2008 2009 2010

30

Annual Results

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

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

10,746 11,677

15,228

12,940

9,152

5,030

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2005 2006 2007 2008 2009 2010

3,773 4,725

5,682

7,487

9,434

8,113

- 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

10,000

2005 2006 2007 2008 2009 2010

945 1,107

1,645

1,270 1,380

1,607

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2005 2006 2007 2008 2009 2010

1,617 1,947

2,618

987

-647

694

-1,000

-500

-

500

1,000

1,500

2,000

2,500

3,000

2005 2006 2007 2008 2009 2010



Economics Kuwait Development Plan (Apr-11) MENA Unrest (Apr-11) Kuwait Investment Sector (Sept-10) The New Regulations on Kuwait Investment Sector (Jun-10) Kuwait Capital Market Law (Mar-10) The “Vicious Square” Monetary Policy options for Kuwait (Feb-08) A Gulf Emerging Portfolio: And Why Not? (Jun-07) To Leap or To Lag: Choices before GCC Regulators (Apr-07) GCC for Fundamentalists (Dec-06) GCC Leverage Risk (Nov-06)

Sectors

Infrastructure GCC Power (Jul-09) GCC Ports (Aug-09) GCC Water (Nov-09) GCC Airports (Nov-09) GCC Roads & Railways (Dec-09) GCC ICT (Feb-10)

Real Estate Abu Dhabi Algeria Dubai Egypt Jordan KSA Kuwait Lebanon Qatar Syria U.S.A.

Banking Stress testing Kuwait Banks (May-11) GCC Banks - Done with Provisions? (Jan-10) Shelter in a Storm (Mar-09) Banking Sweet spots (Apr-08)

Oil & Gas Diworsification: The GCC Oil Stranglehold (Jan-09)

Periodic Research Monthly Regional Petroleum Projects Commentary Weekly Real Estate Market Commentary Daily Oil & Gas Bulletin

Strategic Research What to expect in 2011 (Jan-11) The Golden Portfolio (Sept-10) Persistence in Performance (Jun-10) What to expect in 2010 (Jan-10) What is left for 2009? (Sept-09) Missing the Rally (Jun-09) This Too Shall Pass (Jan-09) Fishing in Troubled Waters (Dec-08) Down and Out: Saudi Stock Outlook (Oct-08) Mr. GCC Market-Manic Depressive (Sept-08) Global Investment Themes (June-08) To Yield or Not To Yield (May-08) China and India: Too Much Too Fast (Oct-07) A Potential USD 140b Industry: Review of Asset Management Industry in Kuwait (Sep-07) A Gulf Emerging Portfolio: And Why Not? (Jun-07) Derivatives Market in GCC (Mar-07) Managing GCC Volatility (Feb-07)

Periodic Research Annual GCC Market Outlook Quarterly GCC Equity Funds GCC Corporate Earnings GCC Equity Research Statistics Monthly Market Review Weekly MENA Market Intelligence KSE Market Review International Market Update Daily Markaz Daily Morning Brief Markaz Kuwait Watch Daily Fixed Income Update

Company Research (See the list attached)

Capital Markets

Markaz Research Offerings


Bahrain Batelco (Aug-10) Al Salam Bank (Aug-10) Gulf Finance House (Oct-08) Esterad Inv. Company (Aug-08) Bahrain Islamic Bank (Aug-08) Ithmaar Bank (July-08) Tameer (July-08)

Qatar Qatar National Bank (Oct-10) Qatar Gas Transport Co. (Sept-10) QISB (Sept-10) Masraf Al-Rayan (Jun-10) Commercial Bank of Qatar (Mar-10) Qatar Telecom (Jun-09) Industries Qatar (Apr-09) United Development Co. (Feb-09) Qatar Fuel Co. (Dec-08) Qatar Shipping Co (Dec-08) Barwa Real Estate Co. (Nov-08) Qatar Int’l Islamic bank (Nov-08) Qatar Insurance Co. (Nov-08) Doha Bank (Aug-08) QEWC (July-08)

UAE NBAD (Mar-11) Union National Bank (Sept-10) FGB (Aug-10) Etisalat (Aug-10) Dubai Financial Market (Sept-09) ADCB (Jun-09) DP World (Jun-09) NBAD (Feb-09) Sorouh Real Estate (Feb-09) Aldar Properties (Feb-09) Gulf Cement Company (Jan-09) Abu Dhabi National Hotels (Dec-08) Dubai Investments (Dec-08) Arabtec Holding (Dec-08) Air Arabia ( Nov-08) Union Properties (Nov-08) Dubai Islamic bank (Oct-08) Emaar Properties (July-08)

Dana Gas (July 08)

Oman Bank Muscat (Mar-11) Raysut Cement Company (Sept-10) Shell Oman Marketing (Apr-10) Galfar Engineering & Cont. (Nov-08) Oman Telecommunications (Sept-08) Bank Muscat(Sept-08) Oman cement (Sept-08) National Bank of Oman (Aug-08) OIB (July-08)

Egypt Sidi Kerir Petrochemicals (Jul-10) Egypt Kuwait Holding (Mar-10) Commercial Int’l Bank (Oct-08) Orascom Telecom (Sep-08) Mobinil (Sep-08) Telecom Egypt (Aug-08) EFG-Hermes (Jun-08)

Jordan Arab Bank (Sept-08) Cairo Amman Bank (Oct-08) Morocco Maroc Telecom (Mar-10)

Saudi Arabia Al Rajhi Bank (Mar-11) Saudi Telecom Co. (Feb-11) Samba Financial Group (Aug-10) Jabal Omar Development (Jul-10) Arabian Cement Co (Jul-10) Yanbu Cement Co. (Jun-10) Emaar Economic City (Jun-10) Qassim Cement Company (Jun-10) Savola Group (May-10) Alinma Bank (May-10) Jarir Marketing (May-10) Bank Al Bilad (May-10) Bank Al Jazira (Apr-10) Makkah Construction (Apr-10) Saudi Cement Company(Apr-10) Southern Province Cement Co(Mar-10) Saudi Electricity Company(Feb-10) Saudi Arabian Mining Co(Feb-10) Yamama Saudi Cement (Feb-10) Etihad Etisalat (Feb-10) Al Marai Company (Dec-09) Arab National Bank (Oct-09) SAFCO (Oct-09) Riyad Bank (Jul-09) Sabic (Mar-09) Saudi Investment Bank (Jan-09) Kingdom Holding Co (Dec-08) Saudi Kayan Petro Co. (Aug-08) Banque Saudi Fransi (Jun-08

Company Research

Markaz Research is available on: Bloomberg Type “MRKZ” <GO>, Thomson Financial, Reuters Knowledge, Zawya Investor & Noozz. To obtain a print copy, kindly contact: Kuwait Financial Centre “Markaz” Media and Communications Department Tel: +965 2224 8000 Ext. 1814 Fax: +965 2249 8740 Postal Address: P.O. Box 23444, Safat, 13095, State of Kuwait Email: [email protected] markaz.com/research

Kuwait (For Internal Use Only)

Qurain Petrochem. Ind. (Aug-10) Wataniya (Jul-10) Boubyan Bank (June-10) Agility (June-10) Gulf Bank of Kuwait (May -10) National Bank of Kuwait (Mar-10) Al Deera Holding (Aug-09) Kuwait Finance House (Apr-09) Kuwait Financial Centre (Dec-08) Commercial Bank of Kuwait (Oct-08) National Industries Group (Sept-08) Zain (Sept-08) Global Investment House (Sept-08) Kipco (Sept-08) The Investment Dar (Sept-08) Burgan Bank (Sept-08) Automated Systems Co (Aug-08) Al Safat Investment Co (July-08)

Markaz Company Research Coverage

MSCI Arabian Markets

Conventional MSCI Arabian Markets

Islamic Local Index Saudi Arabia 60% 64% 78% Kuwait 83% 92% 56% Qatar 92% 90% 95% UAE 79% 25% 58% Bahrain 79% 100% 21% Oman 63% 100% 50% Egypt 62% 100% 45% Jordan 39% 0% 32% Morocco 50% 70% 24% MENA 79% 93% 63%

Markaz Research Offerings


Disclaimer

This report has been prepared and issued by Kuwait Financial Centre S.A.K (Markaz), which is regulated by the Central Bank of Kuwait. The report is owned by Markaz and is privileged and proprietary and is subject to copyrights. Sale of any copies of this report is strictly prohibited. This report cannot be quoted without the prior written consent of Markaz. Any user after obtaining Markaz permission to use this report must clearly mention the source as “Markaz “. The report is intended to be circulated for general information only and should not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy in any jurisdiction. The information and statistical data herein have been obtained from sources we believe to be reliable but no representation or warranty, expressed or implied, is made that such information and data is accurate or complete, and therefore should not be relied upon as such. Opinions, estimates and projections in this report constitute the current judgment of the author as of the date of this report. They do not necessarily reflect the opinion of Markaz and are subject to change without notice. Markaz has no obligation to update, modify or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate, or if research on the subject company is withdrawn. This report may not consider the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors are urged to seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and to understand that statements regarding future prospects may not be realized. Investors should note that income from such securities, if any, may fluctuate and that each security’s price or value may rise or fall. Investors should be able and willing to accept a total or partial loss of their investment. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily indicative of future performance. Kuwait Financial Centre S.A.K (Markaz) does and seeks to do business, including investment banking deals, with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. This report may provide the addresses of, or contain hyperlinks to, websites. Except to the extent to which the report refers to website material of Markaz, Markaz has not reviewed the linked site and takes no responsibility for the content contained therein. Such address or hyperlink (including addresses or hyperlinks to Markaz’s own website material) is provided solely for your convenience and information and the content of the linked site does not in any way form part of this document. Accessing such website or following such link through this report or Markaz’s website shall be at your own risk. For further information, please contact ‘Markaz’ at P.O. Box 23444, Safat 13095, Kuwait; Email: [email protected] ; Tel: 00965 1804800; Fax: 00965 22450647.

gcc corporate earnings - 1q11

Documents