Aggregate profit of Saudi-listed companies ex-Aramco down to SAR 23.96B in Q4 2023

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Saudi-listed companies reported about SAR 126.83 billion in aggregate net profit for the fourth quarter of 2023, down 17% from nearly SAR 153.32 billion in the year-ago period. The quarterly results were hurt by the 18% drop in Saudi Aramco’s fourth-quarter earnings, coupled with losses logged by the petrochemicals and public utilities sectors, along with the energy sector’s profit drop.

Excluding Aramco's results, the Q4 2023 aggregate net earnings declined 14% year-on-year (YoY) to SAR 23.96 billion, due to the fall in petrochemical companies’ earnings, led by Saudi Basic Industries Corp. (SABIC) that recorded SAR 1.73 billion in losses. This is in addition to the widening of Saudi Electricity Co.'s loss to above SAR 2 billion. Cenomi Retail also logged losses of SAR 1.09 billion, while SABIC Agri-Nutrients (SABIC AN) saw a 55% YoY profit slump.

Meanwhile, 52 companies operating in different sectors incurred losses in Q4 2023, including 18 that turned to loss-making. A total of 153 firms reported earnings in the three-month period, 26 of which swung to profit, while 69 posted profit growth and 58 others reported lower profit YoY.

Sector-wise, energy firms contributed the most (or roughly 80.7%) to the Q4 2023 aggregate net profit of Saudi-listed companies, after the energy sector's profit fell by almost 18% YoY to SAR 102.31 billion, due to the 18% YoY decline in Aramco’s profit.

Banks took the second position, with 13.7% of the overall aggregate profit. The banks sector's Q4 2023 profit rose 8% YoY to SAR 17.37 billion, as seven banks reported profit growth, driven by the rise in net special commission income and lower credit loss provisions.

The telecommunications sector ranked third, accounting for 2.7% of the total, up from fourth place in Q4 2022. The sector's profit fell by about 6% YoY, hurt by the 18% YoY slip in stc’s fourth-quarter earnings.

The basic materials sector fell to 14th place in terms of the most profitable sectors, after its bottom line shrank to about SAR 150 million. Its earnings were primarily affected by losses of the petrochemical companies, mainly SABIC and Saudi Kayan, in addition to the lower SABIC AN’s profits.

SABIC recorded SAR 1.73 billion in losses for the same period, weighed by the collective decline in the performance of operating segments, in addition to non-recurring losses worth SAR 1.91 billion, of which SAR 1.15 billion were restructuring provisions, besides provisions for the value of polymer assets in the US and European petrochemical sectors.

The cement sector’s profit also weakened by around 43% YoY in Q4 2023, as a result of lower sales value and volumes.

The public utilities sector contributed to the decline in sector’s profits after recording losses of more than SAR 1.3 billion, given the SAR 2.03 billion loss logged by Saudi Electricity, paired with the drop in earnings of three companies, most notably ACWA Power which saw its profit plummet by about 12%.

The Saudi market's top 10 profitable companies accounted for about 96% of the aggregate profit in Q4 2023. A total of six companies posted lower profit YoY, while Saudi National Bank (SNB), Saudi Awwal Bank (SAB), Alinma Bank and Arab National Bank (ANB) reported profit growth.

Saudi Electricity recorded the biggest loss of SAR 2.03 billion in Q4 2023, followed by SABIC, Petro Rabigh and Cenomi Retail.

The aggregate profit for 2023 dropped by 24% to reach SAR 574.2 billion, compared to SAR 756.4 billion a year ago.

The current period included SAR 2.93 billion in one-off losses incurred by SABIC from its Saudi Iron & Steel Co. (Hadeed) sale deal. This is in addition to SAR 1.15 billion provisions for write-offs and restructuring, along with the reversal of deferred income tax entries amounting to SAR 1.02 billion and the recording of SAR 770 million in one-off fees related to Cenomi Retail’s store portfolio conversion.

One-off gains worth SAR 5.87 billion were posted in 2022 by Kingdom Holding, stemming from the sale of half of its stake in Four Seasons Holding Co.

Excluding Aramco’s profit and one-off items, the market's aggregate profit decreased by 19% to SAR 124.5 billion in 2023, compared to SAR 153.3 billion in 2022.