Investment firms’ earnings soar 30.2% to KD 152 million in H1 2024

• The Kuwait Stock Exchange saw a rise in profits during the first six months of 2024 due to higher total operating revenues, driven by increased trading activities.
• Seven firms turned around from KD 6.3 million in losses in early 2023 to KD 14.4 million in profits in the first six months of this year, a 330% growth.
• Profits for eighteen listed investment companies declined, totaling about KD 44 million, including eight companies that incurred losses amounting to KD 5.8 million.

Investment companies listed on the Kuwait Stock Exchange earned KD 152 million in the first half of this year, a 30.2% increase from KD 116.7 million in the same period of 2023, according to a report published in Al Qabas newspaper.

According to statistics prepared by Al-Qabas newspaper, five companies accounted for 62.4% of the total profits in the investment sector, totaling KD 94.8 million. ‘industries’ led with the highest profits of KD 30.2 million, reflecting a 124% increase from the same period last year, when profits were about KD 13.5 million.

As for ‘Holding’ and ‘Noor,’ they reported profits of KD 22.7 million and KD 21.4 million, respectively. ‘Holding’ is the only company among the five whose profits decreased by 14%, falling to KD 26.4 million.

‘Projects’ and the ‘Stock Exchange’ ranked fourth and fifth among the highest profit earners, with profits of approximately KD 11 million and KD 9.4 million, respectively. The increase in ‘Projects’ profits is attributed to positive results from the company’s banking activities, food sector, logistics services, and oil services, which were partially offset by higher financing costs.

The increase in profits is attributed to several factors. The Kuwait Stock Exchange saw a rise in profits due to higher total operating revenues, driven by increased trading activities. ‘Industries’ experienced a significant profit boost due to a rise in overall quarterly results, a higher share of results from affiliated companies, and an increase in the fair value of financial assets measured at fair value through profit or loss.

Profits of listed investment firms plunge

Profits for eighteen listed investment companies declined, totaling about KD 44 million, including eight companies that incurred losses amounting to KD 5.8 million. Some companies increased their losses due to a decrease in net investment income, lower management fees, and negative foreign exchange differences. Others faced losses due to increased impairment losses, higher net provisions, and a decrease in net investment profits.

Significant improvement

Seven companies saw a significant improvement in their performance. After incurring total losses of about KD 6.3 million in the first half of 2023, they managed to achieve profits totaling KD 14.4 million in the first half of this year, representing a growth of 330%.

Al-Oula Company led with the highest change, showing a growth rate of 1,280%. After facing losses of KD 200,000, it achieved a profit of KD 2.3 million.

Change rates ranged from 1,280% to 102%. The ‘Center’ earned profits of KD 1.8 million after incurring losses of KD 1.3 million in the first half of the previous year. The rise is likely due to a rise in the fair value of financial assets measured at fair value through profit or loss.

Seven key reasons you’re losing money

1. Decrease in net investment income.
2. Negative foreign exchange differences.
3. Low operating costs.
4. Reduced employee costs and general administrative expenses.
5. Lower consumption expenses.
6. Decline in revenues and inability to cover expenses.
7. Losses from associate companies and joint ventures.

Nine reasons to improve performance

1. Unrealized gains on investments at fair value through profit or loss.
2. Response to lawsuits.
3. Addressing potential demands that are no longer needed.
4. Increase in net investment profits.
5. Improved performance of financial markets.
6. Greater share in the results of affiliated companies.
7. Decrease in provisions for expected credit losses on assets.
8. Growth in financing revenues.
9. Decline in consumption expenses and general and administrative expenses.