GCC corporates posted a healthy set of numbers with overall earnings growth of 26 percent in 2011 compared to 2010, driven primarily by incremental earnings from Saudi Arabia and UAE. Total earnings, came in at $52.3 billion versus our expectation of $54.26 billion or a 29 percent annual growth, Kuwiat-based Markaz Research said. FY2011 earnings were driven by strong performance from commodity companies and banks. Aggregate net profits from the commodity sector were $13.3 billion, an increase of $3.8 billion over 2010, due to increased petrochemical prices and higher volumes. Bank earnings rose 17 percent in 2011 to $20 billion fuelled by higher government spending and lower provisions. Telecom continued to drag overall earnings with a bottom-line drop of 23 percent. 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 $ 2.4 billion. Saudi Arabian companies posted total profits of $ 24.9 billion, an increase of 19 percent over 2010. The increase was mainly due to higher earnings reported by commodity companies which delivered $ 2.9bn in incremental earnings. Sabic's FY11 net income was up 36 percent to $7.8 billion. 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 $3.4 billion loss in 2010 to $175 million in 2011 profits due to revenue from sale of assets to the Government. Net income of Qatari companies increased 19 percent to $9.7 billion due to growth in commodities and banks. Industries Qatar reported a bottom-line increase of 45 percent in 2011 to $2.2 billion due to higher petrochemical prices. Government spending on infrastructure boosted banking profits with Qatar National Bank reporting 32 percent earnings growth to $2.1 billion. Real estate profits more than doubled to $ 1.4bn due to a revaluation gain of $837 mbillion booked by United Development Co. Kuwait lags other countries in terms of visibility, with only 33 percent of the companies (representing 81 percent 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 percent in 2011 to $ 5.5 billion. However, when compared on a like-to-like basis, earnings declined 21 percent. If the extraordinary items at Zain (2Q10) and Wataniya (1Q11) are excluded, Kuwaiti earnings grew 86 percent on absolute basis and 8 percent on like-to
