The financial results of Kuwaiti listed companies reveal a steady albeit uneven recovery of the corporate sector in Kuwait, a recent economic report showed here on Wednesday.
The rise in 2013 corporate earnings was primarily driven by improvement in the real estate and non-bank financial services sectors. The two sectors had fared the worst during the financial crisis and have seen some notable recoveries in the past two years, said the report, released by the National Bank of Kuwait (NBK).
The reported earnings of 153 Kuwaiti companies out of a total of 191 listed on the Kuwait Stock Exchange (KSE) was KD 1.35 billion in 2013 (USD 4.8 billion), it added.
Profits were up a notable 11 percent from the year before, on a same-company-basis. If the NBK''''s one-time gain is excluded from the consolidation of Boubyan in 2012, growth would be still stronger at 19 percent, it indicated.
The number of companies reporting losses and their aggregate losses continued to shrink. Only 26 companies reported negative earnings in 2013 compared to 40 the previous year. Losses in 2013 totaled KD 124 million compared to KD 220 million in 2012, the NBK report said.
Companies in the financial services sector reported total profits of KD 83 million. These companies saw significant growth from 2012. Results reveal that a number of companies in this sector have made a solid recovery, though it should be noted that about a fifth of the sector''''s companies have yet to announce results for 2013.
Meanwhile, real estate companies reported profits of KD 148 million, more than double what was reported last year. The pickup in company profits mirrors the recovery we have seen in Kuwait''''s real estate sector in general, particularly in residential and investment property.
Companies in the consumer goods and consumer services sectors also saw decent increases in profits thanks to a healthy consumer sector. Still, these two sectors remain relatively small and have little noticeable impact on the aggregates.
Equity prices have reacted positively to profit announcements thus far in 1Q14. The value-weighted index is up 6.7 percent thus far in 2014. The Kuwait Stock Exchange (KSE) also seems to be benefitting for a more positive economic outlook for Kuwait. With relative stability on the political front and some progress in the government''''s development projects, investors are showing more interest in the local bourse, the report concluded