Exchange companies profit plunges by 56% in Q1 as expenses rise

The profitability of Kuwait’s exchange companies witnessed a significant decline during the first quarter of 2024, with net profits dropping by 56% compared to the same period in 2023. This decline was primarily attributed to a surge in expenses, particularly administrative and financial costs.

Key findings

• Net profit plummets: Exchange companies’ net profit fell to KD 4.64 million in Q1 2024, down from KD 10.5 million in Q1 2023.
• Expenses soar: Total expenses jumped by 33.44% to KD 21.9 million in Q1 2024, compared to KD 16.44 million in Q1 2023.
• Revenue edges down: Total revenue edged lower by 1.4% to KD 26.59 million in Q1 2024, from KD 26.97 million in Q1 2023.

Revenue breakdown

• Currency exchange: Revenue from currency exchange activities increased by 1.01% to KD 19.98 million in Q1 2024, up from KD 19.7 million in Q1 2023.
• Bank interest: Revenue from bank interest rose by 32.9% to KD 339.2 thousand in Q1 2024, compared to KD 255.2 thousand in Q1 2023.
• Other revenue: Other revenue declined by 9.6% to KD 6.26 million in Q1 2024, from KD 6.9 million in Q1 2023.

Expense breakdown

• Administrative and financial costs: These costs surged by 33.75% to KD 17.75 million in Q1 2024, up from KD 13.27 million in Q1 2023.
• Bank interest expenses: Bank interest expenses skyrocketed by 107% to KD 608.6 thousand in Q1 2024, from KD 293.9 thousand in Q1 2023.
• Provisions: Provisions spiked by 54.4% to KD 3.35 million in Q1 2024, compared to KD 2.17 million in Q1 2023.
• Other expenses: Other expenses plunged by 67.65% to KD 227.7 thousand in Q1 2024, from KD 703.8 thousand in Q1 2023.