KUWAIT CITY, March 17: Aggregate earnings of GCC companies showed a second consecutive year of declines says the new report from Kuwait Financial Centre S.A.K “Markaz”. With 67 percent of companies declaring results so far, aggregate results show a decline of 5 percent for GCC as a whole for 2009 versus an 18 percent expansion in MSCI EM EPS, and a 9 percent contraction in S&P 500 EPS for the year. The visibility remains poor for Kuwait with only 20 percent of companies reporting their full year earnings so far.
Fourth quarter earnings plummeted due to a correction in real estate prices in Qatar, UAE, and Kuwait. Furthermore, the debt crisis in Dubai led to greater provisioning by banks against credit losses and impairment in the value of investments and adversely impacted Banking earnings during 4Q09.
On a YoY basis, the Financial Services and Real estate sectors’ earnings took the largest hit, down 67 percent and 64%, respectively in 2009. GCC banks earnings declined 1 percent YoY in 2009 primarily due to last quarter dip in earnings. Meanwhile, Conglomerates posted a profit of USD 971 Mn in 2009 compared to a loss of USD 8 Bn in 2008. The Telecom sector registered a 7 percent YoY decline in earnings in 2009.

Saudi Arabia performed in line with our expectations and registered a YoY growth of 26 percent in its earnings. UAE’s corporate earnings declined 32 percent due to Dubai’s debt woes. The banking sector, which contributed 45 percent of overall corporate earnings, witnessed a YoY decline of 19 percent in 2009. Furthermore, the Real Estate sector’s earnings declined 86 percent on a YoY basis in 2009. On a like-to-like basis (29 companies), Kuwait registered an earnings growth of 29 percent in 2009. Kuwaiti banks and financial services sector emerged out of the crisis and registered aggregate profits in 2009.
A quantum jump in Ezdan Real Estate Company’s Q4 2009 profits ($2.3 Bn) aided Qatar to record an earnings growth of 14 percent YoY in 2009. On a YoY growth basis, Bahrain was the worst performer for the year.
 2009 in the GCC region, this is particularly due to steep losses ($728 Mn in 2009) reported by Gulf Finance House.
Oman’s Real Estate sector reported an earnings growth of 22 percent YoY in 2009. Nevertheless, 19 percent and 28 percent YoY fall in the Banking and Conglomerates sector’s, respectively led to a 14 percent YoY decline in Oman’s earnings. For more details on corporate earnings review, visit www.markaz.com/research