Banking sector drives profits for Kuwaiti listed companies

• Net profits of 134 listed companies in Kuwait grew by 0.3% to KD 727.6 million in Q1 2024 compared to Q1 2023.

• The banking sector contributed 57% to the total net profit of listed companies in Q1 2024, while the financial services sector contributed 15%.

Listed companies on the Kuwait Stock Exchange have demonstrated resilience in the face of global economic and geopolitical challenges. This is evident in their net profits for the first quarter of 2024, which increased slightly to KD 727.6 million compared to KD 725 million in the first quarter of 2023.

This growth reflects the strength of Kuwaiti economic sectors, which are able to adapt to changing circumstances. While rising financing costs and a slowdown in operating revenue growth present hurdles, there are still opportunities for many companies to expand their net profits throughout 2024.

Strong financial results

The positive performance is attributed to a combination of factors. The total operating revenues of the 134 listed companies that reported their financials for the first quarter of 2024 grew by 8% to KD 3.95 billion, compared to KD 3.66 billion in the same period of 2023. Additionally, operating profits saw a 7% increase, reaching KD 1.1 billion in the first quarter of 2024.

Banking sector leads the way

The banking sector emerged as the strongest performer, contributing 57% of the net profit for all Kuwait Stock Exchange sectors in the first quarter.

These banks generated a net profit of approximately KD 411 million, representing 25.3% of the total operating revenues during the same period.

The financial services sector followed closely behind, contributing 15% of the net profit (KD 102 million) and 16% of the operating revenues (KD 623 million) for all sectors.

The industry and telecommunications sectors also played a significant role, contributing 7% and 6.9% of the net profits,respectively. This translates to net profits of KD 50.6 million for the industry sector and KD 49.95 million for the telecommunications sector.

Profitability on the rise

The overall net profit margin improved to 18.4% in the first quarter, reflecting a positive trend. This aligns with the growth in operating revenues, as the aggregate operating profits of the companies increased by 7%. The operating profit margin for all companies reached 28%.

Top performers drive growth

The top 40 companies in terms of net profit significantly influenced the overall results. These companies generated a combined net profit of approximately KD 677 million, which is equivalent to 93% of the total net profit for all listed companies.

Kuwait Finance House (KFH) secured the top spot with a net profit of KD 162.85 million, representing 24% of the aggregate net profit for the top 40 companies. National Bank of Kuwait (NBK) followed closely behind with a net profit of KD 146.6 million and a contribution rate of 21.7%.

The top 40 companies also played a major role in driving operating revenue, contributing approximately 75% of the total for all listed companies. Additionally, they were responsible for 91% of the net operating profit generated by listed companies.

Losses remain limited

While the overall trend is positive, there were some companies that experienced losses in the first quarter of 2024. Approximately 27 companies reported a total loss value of KD 14.4 million.

However, this is overshadowed by the 107 companies that achieved net profits, reaching a combined total of KD 742 million.

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