Net profit of Saudi companies plunges 37.8% in nine months

Riyadh: Major Saudi companies listed in the Capital Market recorded a total net profit of SR43.3 billion (Dh42.2 billion) during the first nine months of 2009.

This figure is a drop of 37.8 per cent comparing with the same period last year when it stood at SR69.6 billion.

These companies earned a net profit of SR17 billion in the third quarter of the year, 27.2 per cent down from SR23.4 billion in the third quarter of 2008.

At the same time, there has been an increase of 8.3 per cent in the net profit during the period comparing with the previous quarter in which the profit was SR15.7 billion.

According to a report, released by a research firm, some 87 companies among a total of 118 companies listed in the capital market posted a total net profit of SR47.4 billion during the three quarters while the remaining 31 companies recorded net losses amounting to SR4124 million.

In the third quarter, 91 companies earned a total profit of SR18.9 billion while 27 companies posted losses totalling to SR1.8 billion.

There has been a slight decrease of 2.6 per cent in the net profits earned by the banking sector with SR18.868 billion in the three quarters against SR19.373 billion in the same period last year.

However, their third quarter profit rose 1.4 per cent to SR6107.2 million from SR6017.8 million in the third quarter of 2008.

The petrochemical sector was the biggest loser as far as the nine-month net profits are concerned. Their profits plummeted 79.8 percent to SR5.41 billion from SR26.82 billion during the same period last year.

During the third quarter, their profits plunged 60.6 per cent to SR 3686 million from SR 9357 million in the third quarter of 2008.

The third-quarter profit of Saudi Basic Industries Corporation (SABIC), the world's largest petrochemicals giant, dropped 50 per cent as the global recession hurt prices and weakened demand for plastics and fertilizers.

Net income of SABIC fell to SR3.6 billion from SR7.24 billion a year earlier.

Saudi telecom companies also recorded a drop of 24.8 per cent in their net profits in the three quarters, falling to SR7.4 billion from SR9.8 billion during the same period last year.

The cement companies also incurred losses in their net profits.