Dubai Listed Companies Buck Wider Declining GCC Trend

The strength of Dubai's economic diversification strategy was once again in the forefront as net profits for listed companies in the emirate increased by 16.0 per cent year on year to $25.4 billion in FY-2024 against $21.9 billion in FY-2023.

According to a report by Kamco Invest, this was in stark contrast to the wider GCC, where aggregate profits during the last quarter fell five per cent quarter on quarter to reach $57.3 billion.

In Dubai, earnings growth during the year was heavily concentrated on the banking, real estate and utilities sectors. These sectors alone represented 82.8 per cent of the total net profits reported by the exchange during FY-2024 as compared to 88.1 per cent of the total net profits during FY-2023. In context, 10 out of the 13 sectors of the exchange reported year-on-year net profit growth during FY-2024 while the remaining three sectors reported year-on-year declines during the year.

In terms of quarters, net profits increased by 20.1 per cent year on year to $6.7 billion in Q4-2024 against $5.6 billion in Q4-2023. Earnings growth during the quarter was broad-based and was mainly driven by banks, real estate, and utilities companies with the three sectors accounting for 86.4 per cent of the aggregate earnings in the exchange during the quarter. Aggregate net earnings for the banking sector improved 12.2 per cent year on year to reach $2.9 billion during Q4-2024 while total net profits for the real estate sector improved by 19.7 per cent year on year to $2.4 billion during the similar period.“It is noteworthy that out of Dubai Stock Exchange's 13 sectors, eight witnessed a year on year increase in profits during Q4-2024,” the report, authored by Junaid Ansari, Kamco's head of investment strategy and research, Mohamed Ali Omar, associate and Vineetha K. Yeluri analyst, said.

Total net profits for the banking sector rose by $1.3 billion in FY-2024 to reach $12.6 billion up from $11.3 billion in FY-2023.

In terms of quarter on quarter performance, the sector registered a 1.2 per cent increase in total profits in Q4-2024 which reached $2.9 billion as compared to $2.86 billion in Q3-2024. The sector's growth in total earnings was primarily driven by Emirates NBD's 6.9 per cent year on year profits growth that reached $6.3 billion during FY-2024 as compared to $5.8 billion in FY-2023 as well as Dubai Islamic Bank FY-2024 net profits, which reached $2.2 billion after increasing by 16.7 per cent during the year. In addition, FY-2024 net earnings of Mashreq Bank improved 3.3 per cent year on year to reach $2.4 billion as compared to $2.3 billion in FY-2023. Emirates NBD's robust profits growth was attributed to strategic investment in digital banking and branch network, generating significant new revenue stream. On the other hand, Mashreq Bank's strong net profits growth was mainly due to regional profits growth as well as an increase in operating income and net interest income.

Aggregate net profits for the real estate sector rose 12.2 per cent year on year to reach $6.3 billion, up from $5.6 billion in FY-2023. Emaar Properties posted a net profit of $3.7 billion in FY-2024, resulting in a 16.2 per cent year on year growth up from $3.2 billion net profit in FY-2023. Emaar's financial results for 2024 reflected strong operational performance and

continued growth across its key business segments. The company recorded property sales of approximately Dh70 billion, representing a 72 per cent increase compared to FY-2023. Moreover, the company approved 100 per cent dividend payout which amounted to Dh8.8 billion ($2.4 billion). Furthermore, FY-2024 net profits for Tecom Group witnessed a 13.9 per cent year on year increase to reach $334.5 million, up from $293.6 million during FY-2023. The company credited the remarkable growth of FY-2024 due to record revenue and strong performance across all business segments.

Total net profits for the utilities sector fell 8.6 per cent year on year in FY-2024 to reach $2.2 billion down from $2.4 billion in FY-2024. The two companies that comprise the sector reported profit declines during FY-2024. FY-2024 net earnings for Dubai Electricity & Water company reached $1.9 billion as compared to $2.1 billion in FY-2023. Similarly, FY-2024 for Emirates Central Cooling System Corp (Tabreed) declined by 5.9 per cent to reach $244.2 Mn down from $259.5 Mn during FY-2023.

FY-2024 net profits for Abu Dhabi-listed companies declined by 7.1 per cent to reach $36.2 billion as compared to $38.9 billion in FY-2023. The dip in the aggregate net profits was mainly led by a 42.2 per cent drop in total profits for the food, beverage and tobacco sector that reached $4.4 billion during FY-2024 as compared to $7.6 billion in FY-2023. The capital goods sector followed as the second largest sector in terms of profit slide during the year with a 19.1 per cent year on year decline in total FY-2024 net profits that reached $2.5 billion as compared to $3.1 billion in FY-2023. Comparatively, FY-2024 total net earnings for the banking sector improved 15.1 per cent year on year to reach $10.2 billion as compared to $8.9 billion in FY-2023.

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