gcc corporate earnings – 2011 · • saudi arabia and bahrain topped with almost 100% coverage,...

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

GCC Corporate Earnings – 2011 Earnings grow 26% backed by Saudi & UAE

During 2011, GCC corporates posted a healthy set of numbers with overall

earnings growth of 26% when compared to 2010. Total earnings, came in at

USD 52.3bn; this is versus our expectation of USD54.26bn or a 29% annual

growth. FY2011 earnings were driven by strong performance from Commodity

companies and Banks.

Aggregate Net Profits from the Commodity sector were USD 13.3bn, an

increase of USD 3.8bn over 2010, due to increased petrochemical prices and

higher volumes. Bank earnings rose 17% in 2011 to USD 20bn fuelled by

higher government spending and lower provisions. Telecom continued to drag

overall earnings with a bottom-line drop of 23%. Declining growth in mobile

revenues and foreign exchange losses were the prime reasons for this fall.

Real Estate sector continued its recovery with aggregate net income coming

in at USD 2.4bn.

Figure: 1 – Earnings Trend – GCC – 2011

Source: Reuters Eikon, Markaz Research

2011 Earnings

GCC aggregate earnings growth of 26% is driven primarily by incremental

earnings from Saudi Arabia and UAE. Saudi Arabian companies posted total

profits of USD 24.9bn an increase of 19% over 2010. The increase was mainly

due to higher earnings reported by commodity companies which delivered

USD 2.9bn in incremental earnings. SABIC’s FY11 net income was up 36% to

USD 7.8bn.

UAE reported a twofold increase in profits led by recovery in real estate and

improvement in bank earnings. Real estate improvement was led by Aldar

Properties which swung from a USD 3.4bn loss in 2010 to USD 175mn in 2011

profits due to revenue from sale of assets to the Government.

Net income of Qatari companies increased 19% to USD 9.7bn due to growth

in Commodities and Banks. Industries Qatar reported a bottom-line increase

of 45% in 2011 to USD 2.2bn due to higher petrochemical prices.

Government spending on infrastructure boosted banking profits with Qatar

March 2012

Research Highlights:

Provides a review of corporate

earnings across the GCC

Markaz Research is available

on:

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M.R. Raghu CFA, FRM Head of Research

+965 2224 8280

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Madhu Soothanan

Senior Research Analyst

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[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 March 2012

Kuwait Financial Centre “Markaz”

2

National Bank reporting 32% earnings growth to USD 2.1bn. Real estate

profits more than doubled to USD 1.4bn due to a revaluation gain of USD

837mn booked by United Development Co.

Kuwait lags other countries in terms of visibility, with only 33% of the

companies (representing 81% of total market cap) reporting numbers as of

second week of March. Most Investment and real estate companies are yet to

report numbers. Corporate profits in Kuwait increased 6% in 2011 to USD

5.5bn; however, when compared on a like-to-like basis, earnings declined

21%. If the extraordinary items at Zain (2Q10) and Wataniya (1Q11) are

excluded, Kuwaiti earnings grew 86% on absolute basis and 8% on like-to-

like basis.

Bahrain’s earnings rose 64% in 2011 to USD 1.7bn, boosted by strong

performance from Banks and Commodities. Aluminium Bahrain’s income came

in at USD 562mn (+53%) driven by strong revenues and fair value gain of

derivative instruments. Oman was the only GCC country which recorded

negative growth with a 21% decline in profits to USD 1.4bn.

Source: Reuters Eikon, Markaz Research Source: Reuters Eikon, Markaz Research

4Q11 Earnings

4Q11 was not an encouraging quarter for GCC companies with earnings

decreasing 17% QoQ, primarily due to weak petrochemical prices and dismal

performance by banks on account of last quarter provisioning.

Earnings of Saudi Arabian companies totalled USD 5.3bn, an increase of 4%

YoY but decline of 23% QoQ. SABIC reported an 8% YoY decline in profits to

USD 1.4bn (3Q11: USD 2.2bn), which the management attributed to a lower

pricing environment. Al Rajhi Bank reported 14% YoY growth (-2% QoQ) in

net income to USD 506mn.

During 4Q11, UAE companies posted earnings of USD 1.2bn (3Q11: USD

2.5bn, 4Q10: USD -2.3bn). Banking sector profits grew 6% YoY, but declined

29% over the quarter to USD 957mn. NBAD reported 30% QoQ decrease in

net income to USD 197mn due to higher impairment charges booked in 4Q11.

4Q11 Telecom earnings were hit by a USD 270mn write-down in value of

Indian operations by Etisalat. Real estate continued its recovery with profits of

USD 252mn in 4Q11 (3Q11: USD -112mn, 4Q10: USD -3.87bn).

Qatar largely maintained its earnings momentum with USD 2.6bn in corporate

profits, a growth of 19% over 4Q10 but a 4% decline over the quarter. Qatar

National Bank reported a 10% QoQ increase in income to USD 2.1bn while

Industries Qatar’s earnings saw a decline of 19% over the quarter due to

lower petrochemical prices and decreased contribution from steel segment.

Table 1: Country-wise Earnings Growth (USD mn)

Country 2010 2011 YoY

Saudi Arabia 20,833 24,894 19%

Kuwait 5,186 5,476 6%

UAE 4,486 9,146 104%

Qatar 8,120 9,677 19%

Oman 1,733 1,377 -21%

Bahrain 1,062 1,747 64%

GCC Total 41,420 52,317 26%

Table 2: Sector-wise Earnings Growth (USD mn)

Sector 2010 2011 YoY

Banks 17,024 19,943 17%

Telecommunications 10,614 8,140 -23%

Commodities 9,545 13,352 40%

Financial Services (328) 1,183 N.M.

Real Estate (3,550) 2,441 N.M.

Construction Related 2,333 1,696 -27%

Conglomerates 1,342 1,424 6%

Others 4,439 4,138 -7%

Total 41,420 52,317 26%


Kuwait Financial Centre “Markaz”

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Table 2: Earnings Growth – Sectoral Trend (USD mn)

Sector 4Q10 3Q11 4Q11 YoY QoQ

Banks 3,706 5,086 4,186 13% -18%

Telecommunications 2,131 1,682 1,932 -9% 15%

Commodities 2,662 3,769 2,544 -4% -33%

Financial Services (1,026) (124) 255 N.M. N.M.

Real Estate (4,163) 444 1,020 N.M. 130%

Construction Related 380 487 164 -57% -66%

Conglomerates 294 341 347 18% 2%

Others 430 1,635 556 29% -66%

Total 4,414 13,319 11,003 149% -17%


At 81% market cap visibility, Kuwait corporate earnings grew 23%

sequentially to USD 1bn. Banking profits declined 23% YoY and 29% QoQ to

USD 405mn. Commercial Bank of Kuwait booked a 4Q loss of USD 27mn due

to higher provisions. Telecom companies saw their bottom-line increase to

USD 405mn (+6% YoY, +35% QoQ). Wataniya’s earnings rose 59% YoY to

USD 137mn driven by growth in subscriber base.

Corporate earnings in Oman increased 7% YoY to USD 338mn. However,

earnings showed a decline of 15% on QoQ basis. Bank Muscat delivered a flat

set numbers with net income of USD 79mn (3Q11: USD 78mn, 4Q10: USD

76mn).

Bahrain also delivered lackluster 4Q11 numbers with net income declining

61% QoQ to USD 187mn. Ithmaar Bank & Bahrain Islamic Bank booked large

losses in 4Q11 which dragged banking sector profits to USD 37mn (-81%

QoQ). Aluminium Bahrain’s 4Q net income of USD 76mn was a decline of

32% over the year and 65% sequentially.

GCC Corporate Earnings – 2011

2

GCC Market Cap Coverage at 92%

Country

Total market cap(USD Bn)

% Coverage

in terms of market cap

Total Number of Companies

Coverage based on no. of

companies

Saudi Arabia 339 100% 151 99%

Kuwait 100 81% 205 33%

U.A.E. 102 87% 111 73%

Qatar 125 81% 41 83%

Oman 18 92% 117 83%

Bahrain 17 100% 43 100%

GCC Total 701 92% 668 71%

• Market Capitalization-based coverage stood at an average of 92% for all GCC countries.

• Saudi Arabia and Bahrain topped with almost 100% coverage, followed by Oman at 92%.

• Earnings visibility (based on number of companies) for the GCC region stood at 71% for 2011.

• Bahrain’s coverage stood at 100% and Saudi Arabia at 99%. Kuwait’s coverage was the lowest at 33%.


3

GCC Corporate Earnings grew 26% in 2011….

• GCC corporate earnings increased 26% in 2011, following a 19% increase in 2010.

• GCC companies added USD 10.9bn in incremental earnings with largest contributions coming in from UAE (+USD 4.7bn) and Saudi Arabia (+USD 4.1bn)

• UAE and Bahrain witnessed the highest percentage growth, with earnings rising 104% and 64% respectively.

• Oman saw its 2011 earnings decline 21%

GCC Corporate Earnings (USD Mn)


GCC 19 26

2010 vs. 2009

(%)

N.M.

2011 vs. 2010

(%)

14

-14

-51

N.M.

33

64

-21

19

104

6

19

49,141

64,585

34,749 34,699

41,420

52,317

-10,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2006 2007 2008 2009 2010 2011

Bahrain

Oman

Qatar

UAE

Kuwait

Saudi Arabia

4

Driven by growth in Commodities and Banking

• In 2011, earnings growth was driven by commodity companies and banks. Commodity earnings grew 40% over the year while banking profits rose 17%.

• Real Estate sector staged a recovery from USD 3.6bn loss in 2010 to USD 2.4bn in 2011 profits

• Telecom remained a drag with bottom-line decreasing 23% in 2011 to USD 8.1bn.

Sectoral Earnings Trend (USD Mn)


40

36

2010 vs. 2009

(%)

30

2011 vs. 2010

(%)

84

-8

N.M.

N.M.

110

-7

6

-27

N.M

N.M

-23

11 17

5

After a healthy 9M11, 4Q11 was a bit of dampener

4Q11 - YoY Earnings Growth

4Q11 - QoQ Earnings Growth

�GCC earnings declined 17% QoQ in 4Q11 due to softening of global petrochemical prices and reduced bank earnings.

�On YoY basis, 4Q11 earnings showed an increase of 149% due to USD 3bn loss suffered by Aldar Properties in 4Q10.


Quarterly Earnings Trend (USD Mn)

6

Commodities disappoint in 4Q

� In 4Q11, banking sector earnings increased 13% YoY while declining 18% QoQ to USD 4.2bn.

� Weak demand and lower prices proved to be a drag on Commodity earnings which came in at USD 2.5bn (3Q11: USD 3.8bn, 4Q10: 2.7bn)

Quarterly Earnings Trend (USD Mn)


4Q11 - QoQ Earnings Growth

Sector

Total

Companies

Companies

that have

Reported

%

Coverage

Banks 65 64 98%

Telecommunications 16 13 81%

Commodities 31 28 90%

Financial Services 167 109 65%

Real Estate 70 34 49%

Construction Related 73 51 70%

Conglomerates 42 32 76%

Others 204 141 69%

Aggregate 668 472 71%

Saudi Arabia – Q4 2011 and 2011

8

Commodities and Banks drive Saudi earnings

Yearly Earnings Trend (USD Mn) Yearly Earnings Growth (%)

� Saudi Arabian corporate profits rose 19% YoY in 2011 toUSD 24.9bn lead by growth in commodities sector whichconstitute 42% of Saudi earnings.

� Commodity companies saw their earnings grow by 38%YoY to USD 10.4bn while bank earnings grew 16% to USD6.8bn.


9

Dismal 4Q11 performance on lower commodity prices

�Commodities sector recorded earnings of USD 2.0bn in 4Q11, as against USD 2.9bn in 3Q11, led bySABIC’s dismal numbers. The company reported a net income of USD 1.4bn (3Q11: USD 2.2bn,4Q10: USD 1.5bn), because of lower pricing environment. However, SABIC’s FY11 net income was up36% to USD 7.8bn.

�In 4Q11, Bank earnings were up 15% YoY but down 7% QoQ to USD 1.6bn. Overall, Saudi bankswitnessed a steady 2011 with stable credit growth and lower provisions. Telecom was a bit of adampener in 2011, with earnings decreasing 5% in 2011 to USD 2.8bn. Saudi Telecom’s earningsdeclined 18% in 2011 to USD 2bn due to foreign exchange losses.

Quarterly Sectoral Earnings Trend (USD Mn)


10

Top companies – Sector – Growth Rate – 2011


Top Companies – Saudi Arabia – Commodities

Company Name

Market Cap

(USD mn) 2010 2011 Growth

Saudi Basic Industries Corp 76,996 5,741 7,797 36%

Saudi Arabian Fertilizers Co 11,733 863 1,096 27%

Saudi Kayan Petrochemical Co 6,960 -4 -67 NM

Yanbu National Petrochemical Co 6,600 446 846 90%

Saudi Arabian Mining Co 6,216 -2 110 NM

Saudi Industrial Investment Group 2,280 108 141 31%

Saudi International Petrochemical Co 1,926 101 188 87%

Sahara Petrochemical Co 1,814 88 110 25%

Advanced Petrochemical Co 1,078 88 137 56%

Total 115,601 7,427 10,359 39%

Top Companies – Saudi Arabia – Conglomerates

Company Name

Market Cap


Kingdom Holding Co 8,795 161 171 6%

National Industrialization Co 6,050 393 651 66%

Total 14,844 554 822 48%

Top Companies – Saudi Arabia – Telecom

Company Name

Market Cap


Saudi Telecom Co 18,026 2,516 2,061 -18%

Etihad Etisalat Company 9,799 1,123 1,356 21%

Saudi Mobile Telecommunications Co 2,072 -629 -513 NM

Total 29,897 3,010 2,903 -4%

Top Companies – Saudi Arabia – Banking

Company Name

Market Cap


Al Rajhi Bank 27,799 1,806 1,967 9%

Samba Financial Group 11,183 1,183 1,147 -3%

Riyad Bank 9,340 753 840 11%

Banque Saudi Fransi 8,119 747 776 4%

Saudi British Bank 8,140 502 770 53%

Arab National Bank 6,210 510 579 14%

Alinma Bank 3,740 4 115 2738%

Saudi Investment Bank 2,369 114 189 65%

Saudi Hollandi Bank 2,619 211 275 31%

Total 79,518 5,830 6,659 14%

Top Companies – Saudi Arabia – Others

Company Name

Market Cap


Saudi Electricity Co 15,443 608 590 -3%

Almarai Trading Co Ltd 6,072 343 304 -11%

Kuwait – Q4 2011 and 2011

12

Kuwait Earnings a mixed bag

Yearly Earnings Trend (USD Mn)Yearly Earnings Growth (%)

�At 81% market cap visibility & 33% visibility based on numberof companies, Kuwait corporate earnings grew 6% in 2011 toUSD 5.5bn. However, FY11 earnings declined 21% whencompared on a like-to-like basis.

�Excluding the extraordinary items at Zain (2Q10) and Wataniya(1Q11), Kuwaiti earnings grew 86% when compared onabsolute basis and 8% on like-to-like basis.


13

Banking Sector delivers flat growth in 2011

�In 2011, aggregate earnings of Banking sector was USD 2.03bn (2010: 2.05bn). National Bank ofKuwait reported a flat set of numbers with net income of USD 1.09bn. Higher operating income atthe bank was offset by fourfold increase in provisioning.

�After excluding extraordinary items, Telecom sector posted 9% net income growth in 2011. Zain’searnings was almost flat at USD 1.02bn while Wataniya’s earnings increased 24% to USD 345mn.



14


Note: Companies that have not declared their 2011 results on the date of

this report are marked as NA in the 2011 and 2010 columns.


Top Companies – Kuwait – Banking

Company Name

Market Cap


National Bank of Kuwait 15,924 1,073 1,087 1%

Kuwait Finance House 8,694 377 289 -23%

Gulf Bank 4,594 68 110 62%

Commercial Bank of Kuwait 3,610 144 3 -98%

Boubyan Bank 3,705 22 29 33%

Al Ahli Bank of Kuwait 3,417 189 181 -4%

Burqan Bank 2,511 17 182 998%

Ahli United Bank 3,198 98 113 16%

Kuwait International Bank 950 60 39 -35%

Total 46,603 2,046 2,032 -1%

Top Companies – Kuwait – Financial Services

Company Name

Market Cap


Kuwait Projects Co Holding 1,395 160 108 -33%

National Investments Co 541 NA NA NA

ALAFCO Aviation Lease & Finance Co 882 38 169 346%

Commercial Facilities Co 501 61 51 -16%

International Finance Co 294 NA NA NA

KIPCO Asset Management Co 231 NA NA NA

Kuwait Financial Centre 221 29 -1 NM

Global Investment House 229 NA NA NA

Total 4,295 288 327 13%

Top Companies – Kuwait – Telecom

Company Name

Market Cap


Mobile Telecommunications Co 13,927 3,780 1,024 -73%

National Mobile Telecom 3,513 277 1,301 369%

Total 17,439 4,057 2,325 -43%

Top Companies – Kuwait – Others

Company Name

Market Cap


Kuwait Food Company Americana 2,137 164 173 5%

Mabanee Co 1,717 66 75 12%

Agility Public Warehousing Co 1,410 NA NA NA

National Industries Group Holding 1,210 NA NA NA

Gulf Cable and Electrical Industries 1,071 94 130 39%

Total 7,545 325 378 16%

United Arab Emirates – Q4 2011 and 2011

16

UAE Earnings improve as Real Estate seen bottoming out


� At 87% market cap visibility, aggregate UAE corporateprofits more than doubled in 2011 to USD 9.1bn due torecovery in Real Estate and improvement in Bank earnings.

� Recovery in Real Estate earnings was led by AldarProperties which swung from a USD 3.4bn loss in 2010 toUSD 175mn in 2011 profits. The improvement is primarilydue to revenue from sale of assets to the Government.


17

Telecom & Banking drags UAE’s 4Q11 performance

� UAE’s Banking sector posted steady numbers with earnings increasing 20% in 2011 to USD 5.7bn. AbuDhabi Commercial Bank posted an almost eight fold increase in net income to USD 824mn due to saleof its stake in RHB Capital Berhad which resulted in a gain of USD 358mn. In 4Q11, banking sectorearnings grew 6% YoY while declining 29% QoQ to USD 957mn.

� Telecom sector earnings dropped 22% in 2011 to USD 1.9bn. Etisalat’s net income declined 23% toUSD 1.6bn due to intense competition and a USD 270mn write-down in value of Indian operations.



18



Top Companies – United Arab Emirates – Banking

Company Name

Market Cap


National Bank of Abu Dhabi 8,400 1,003 1,009 1%

First Gulf Bank 6,330 931 1,009 8%

Emirates NBD Bank 4,449 637 689 8%

Mashreqbank 4,673 219 223 2%

Abu Dhabi Commercial Bank 4,220 104 824 694%

Dubai Islamic Bank 2,006 151 275 83%

Union National Bank 1,950 370 410 11%

Commercial Bank of Dubai 1,533 223 224 0%

National Bank of Fujairah 1,363 47 76 64%

United Arab Bank 988 84 90 7%

Total 35,911 3,768 4,831 28%

Top Companies – United Arab Emirates – Real Estate

Company Name

Market Cap


Emaar Properties 4,262 667 488 -27%

Aldar Properties 722 -3,446 175 NM

Sorouh Real Estate Co 615 2 91 4399%

Deyaar Development 335 -781 10 NM

Union Properties 237 -416 -427 NM

Total 6,170 -3,976 338 NM

Top Companies – United Arab Emirates – Telecom

Company Name

Market Cap


Emirates Telecom. Corp 19,567 2,078 1,590 -23%

Emirates Integrated Telecom. 3,597 357 299 -16%

Total 23,164 2,434 1,889 -22%

Top Companies – United Arab Emirates – Construction Related

Company Name

Market Cap


Arkan Building Materials Co 496 NA NA NA

Arabtec Holding 647 NA NA NA

National Marine Dredging 568 NA NA NA

Drake and Scull International 467 42 60 42%

Total 2,178 42 60 42%



Top Companies – United Arab Emirates – Others

Company Name

Market Cap


Dubai Financial Market 1,830 21 -2 NM

Abu Dhabi National Energy 2,034 277 205 -26%

Dana Gas Co 809 43 138 220%

Total 4,672 342 341 0%

Qatar – Q4 2011 and 2011

20

Qatar Banks put up a solid show – Net Income increases 22%


� FY2011 total corporate profits grew 19% YoY to USD 9.7bn,aided by growth in Commodities and Banks. Net Income rose32% YoY (-4% QoQ) in 4Q11 to USD 2.6bn.

� Higher infrastructure spending boosted the earnings ofQatari banks with net income increasing 22% in 2011 to USD4.1bn. Qatar National Bank’s bottom-line was USD 2.1bn, anincrease of 32% over 2010 number.


21

Commodity profits grow but Telecom disappoints in 2011

�Earnings from Commodities sector, represented by Industries Qatar, increased 45% in 2011 to USD 2.2bn due to increase in petrochemical prices for most part of the year. Softening of prices in the last quarter and lower steel revenues lead to a 19% QoQ decline in 4Q11 net profits to USD 463mn.

�Telecom sector disappointed with earnings declining 9% in 2011 to USD 551mn. QTel’s bottom-line declined 10% to USD 716mn due to USD 152mn one-off write back of accrued expense in 2010.

�Profits of Real Estate companies more than doubled in FY11 to USD 1.4bn due to a revaluation gain of USD 837mn booked by United Development Co.



22

Top companies – Sector – Growth Rate –2011


Top Companies – Qatar – Banking

Company Name

Market Cap


Qatar National Bank 26,557 1,567 2,063 32%

Commercial Bank of Qatar 5,709 449 518 15%

Qatar Islamic Bank 5,471 347 375 8%

Masraf Al Rayan 5,736 333 387 16%

Doha Bank 3,639 290 341 18%

Qatar International Islamic Bank 2,245 154 179 17%

Al Khalij Commercial Bank 1,698 117 134 14%

Ahli Bank 1,617 113 121 7%

Total 52,671 3,369 4,118 22%

Top Companies – Qatar – Commodities

Company Name

Market Cap


Industries Qatar 20,091 1,505 2,179 45%

Total 20,091 1,505 2,179 45%

Top Companies – Qatar – Real Estate Operations

Company Name

Market Cap


Ezdan Real Estate Company 16,166 NA NA NA

Barwa Real Estate Company 3,201 386 353 -9%

United Development Company 1,082 164 1,029 528%

Total 20,449 550 1,382 151%

Top Companies – Qatar – Telecom

Company Name

Market Cap


Qatar Telecom(Q Tel) 6,806 793 716 -10%

Vodafone Qatar 1,753 -185 -165 NM

Total 8,559 608 551 -9%

Top Companies – Qatar – Others

Company Name

Market Cap


Qatar Electricity & Water Co 3,834 329 357 8%

Aamal Co 2,162 NA NA NA

Qatar Gas Transport Co Ltd 2,664 NA NA NA

Qatar Fuel 2,798 295 317 7%

Qatar Navigation 2,406 NA NA NA

Total 13,865 624 674 8%



Oman – Q4 2011 and 2011

24

Banking sector profits defies gravity, grows 6%


�At 92% market cap visibility, Oman’s FY2011 corporateearnings declined 21% to USD 1.4bn. After two consecutiveyears of growth, 2011 earnings decline amid political tensionsthat hit the country.

�All the sectors, except Banking, registered negative netincome growth. Banking sector profits increased 6% to USD563mn driven by strong performance from BankMuscat.


25

Financial Services & Construction take the heat in 2011


�Telecom sector saw USD 414mn in earnings, down from USD 421mn reported in 2010. Oman Telecom reported a flat 2011 with net income of USD 290mn while Omani Qatari Telecom’s bottom-line declined 5% to USD 124mn.

�Financial services sector was hit hardest with 2011 earnings declining by USD 123mn (from 2010) to USD 55mn. Net income of Construction companies also declined 24% (on like-to-like basis) to USD 69mn.


26





Top Companies – Oman – Construction Related

Company Name

Market Cap


Raysut Cement Co 395 54 39 -28%

Oman Cement Co 371 NA NA NA

Galfar Engineering & Contracting 319 16 13 -14%

Oman Cables Industry 172 21 18 -16%

Total 1,257 91 70 -23%

Top Companies – Oman – Telecom

Company Name

Market Cap


Oman Telecommunications Company 2,550 291 290 0%

Omani Qatari Telecommunications 1,099 130 124 -5%

Total 3,649 421 414 -2%

Top Companies – Oman – Real Estate Operations

Company Name

Market Cap


Sahara Hospitality Company 36 4 4 2%

Total 36 4 4 2%

Top Companies – Oman – Banking

Company Name

Market Cap


Bank Muscat 3,081 264 306 16%

Bank Dhofar 1,300 86 36 -58%

National Bank of Oman 899 71 89 26%

Oman International Bank 704 46 47 3%

Ahli Bank 552 37 47 29%

Bank Sohar 410 27 38 42%

Total 6,946 530 563 6%

Bahrain – Q4 2011 and 2011

28

Bahrain’s corporate profits grow 64% in 2011

Yearly Earnings Trend (USD Mn)Yearly Earnings Growth (%)

� Bahrain’s corporate profits grew 64% YoY in 2011 to USD1.7bn, boosted by strong performance from Banks andCommodities.

� Aluminium Bahrain’s (ALBA) FY11 net income was USD562mn, an increase of 53% compared to 2010 because ofstrong revenues and fair value gain of derivativeinstruments.


29

Lackluster 4Q11 numbers – Banks & Aluminium Bahrain disappoint

�Aggregate 4Q11 net income decline 61% QoQ to USD 187mn due to dismal 4Q performance from banks and Aluminium Bahrain (YoY: -32%, QoQ: -65%).

�FY11 Banking sector profits were up 52% to USD 729mn due to earnings growth at Ahli United Bank (+17%) & Arab Banking Corp (+43%) coupled with reduction in losses at Ithmaar Bank & Bahrain Islamic Bank.

�Bahrain Telecom’s earnings declined 8% to USD 212mn due to decline in its mobile and fixed line revenues.



30





Top Companies – Bahrain – Banking

Company Name

Market Cap


Ahli United Bank 3,315 265 311 17%

Arab Banking Corporation 1,306 143 204 43%

National Bank of Bahrain 1,305 114 121 6%

Al Baraka Banking Group 948 106 118 12%

BBK 935 104 84 -19%

United Gulf Bank 664 39 1 -96%

Ithmaar Bank 175 -150 -63 NM

Al Salam Bank Bahrain 179 19 1 -96%

Bahrain Islamic Bank 224 -105 -46 NM

Khaleeji Commercial Bank 122 -17 1 NM

TAIB Bank 307 -39 -9 NM

Total 9,479 478 724 51%

Top Companies – Bahrain – Telecom

Company Name

Market Cap


Bahrain Telecommunications Co. 1,497 230 212 -8%

Total 1,497 230 212 -8%

Top Companies – Bahrain – Financial Services

Company Name

Market Cap


Investcorp Bank 638 102 140 37%

Gulf Finance House 151 -349 0 NM

Securities and Investment Co 229 10 1 -87%

Esterad Investment Co 49 -7 -29 NM

Bahrain Middle East Bank 44 6 4 -42%

Total 1,110 -237 117 NM

Top Companies – Bahrain – Others

Company Name

Market Cap


Aluminium Bahrain 2,486 367 562 53%

31

Annual Results Saudi Earnings (USD Mn)

Kuwait Earnings (USD Mn)

GCC Earnings (USD Mn)


32

Annual Results

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

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



Disclaimer

This report has been prepared and issued by Kuwait Financial Centre S.A.K (Markaz), which is regulated by the Capital Markets Authority and 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) may seek 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.

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