DUBAI // A flurry of companies across the Gulf have filed second quarter results. First Gulf Bank, Abu Dhabi's second-largest bank by market value, topped forecasts with a 70 per cent surge in second-quarter profit driven by a more than doubling of its lending and Islamic businesses. The bank made Dh808 million (US$220m) in the three months to June 30 compared with Dh474.39m a year earlier, it said, with earnings per share in the first half at Dh1.08 compared with Dh0.7 a year earlier.
The earnings beat all five forecasts in a Reuters net profit survey that ranged from Dh368.75m to Dh785.87m. First Gulf Bank has "witnessed strong growth in our core banking operations and our subsidiaries and associate companies," said Andre Sayegh, the chief executive of the bank. Second-quarter earnings were driven by a 112 per cent jump in net interest income and income from Islamic financing to Dh622m, First Gulf said.
Banks across the UAE, the world's fifth-largest oil exporter, have been buoyed by an economic boom spurred by a near seven-fold rise in oil prices since 2002. First Gulf's total loan book almost doubled to Dh66 billion at the end of June. Non-interest income jumped 65 per cent to Dh591m while total revenues stood at Dh1.21bn, the bank said. Total assets were Dh94bn at the end of June, up 65 per cent from a year earlier, it said.
First Gulf's quarterly profit grew almost 20 per cent from the first quarter, the bank said. The bank's shares have surged about 33 per cent this year - the fourth-best performing banking stock in the Gulf. The stock fell 0.37 per cent to Dh27.95 yesterday before the results were released. ING this week raised its fair value target price for First Gulf to Dh37.80. Qatar National Bank, the country's largest bank by market value, posted a profit of 942.72m Qatari riyals (Dh950m) in the second quarter, a surge of 70.6 per cent from the year-earlier period that beat forecasts.
The earnings topped all forecasts in a Reuters net profit survey last month ranging from 682.70m riyals to 865.70m riyals. Qatar National made profit of 552.61m riyals in the second quarter of last year and 917.28m riyals in the first quarter of this year. Meanwhile, Almarai from Saudi Arabia, the largest dairy company in the Gulf by market value, posted a 42.3 per cent rise in second-quarter net profit on higher sales as it expands its business regionally.
The company made a net profit of 235.2m Saudi riyals (Dh230m) in the three months to June 30, up from 165.3m riyals in the year-earlier period, topping two forecasts in a Reuters net profit survey last month. The forecasts were for quarterly profit of 164.3m riyals and 210m riyals. "These positive results are due to the success of the company's investment plans to achieve continuing growth in sales and net profit, and at diversifying its sources of revenue," Almarai said.
Almarai, which has been diversifying its revenue sources through acquisitions, said it would raise its investment budget to six billion riyals for the five years to 2013. It gave no further details. The firm previously said it would spend 4.7bn riyals during the five years to the end of 2011 to develop its foodstuff business across the Gulf Arab region. Last year, Almarai began consolidating the earnings of two 2006 acquisitions, Western Bakeries and International Bakery Services. It paid 709m riyals in stock for the companies.
The dairy firm is part of a group led by Mobile Telecommunications Company of Kuwait, also known as Zain, that paid $6.1bn last year for a licence to start Saudi Arabia's third mobile telephone firm, Zain Saudi Arabia. For the six months to June 30, Almarai's turnover rose 38.2 per cent to 2.37bn riyals and operating profit advanced 39.3 per cent to 467.7m riyals. It did not give second-quarter figures for these two indicators.
Based on Reuters data and calculations, second-quarter turnover rose by about 38 per cent to 1.25bn riyals and operating profit 43 per cent to 273.2m riyals. That compared with turnover growth of 38.7 per cent and operating profit rises of 34.5 per cent in the first quarter of this year. "We believe this reflects the company's market share gains in the dairy ... and fruit juice businesses, as well as the successful progressive roll out of its bakery products outside of Saudi Arabia," said Laurent Gally, of Shuaa Capital.
After beating Shuaa's earnings estimates by seven per cent in the second-quarter, Shuaa may revise its full-year estimates "modestly upwards", Mr Gally said. "Our current fair value on the company stands at 164.5 riyals," he added. Almari's stock rose by up to 5.5 per cent to 173 riyals after the earnings announcement, to reduce gains later amid a decline in the Saudi benchmark index. Almarai's shares are up more than 37 per cent since the start of the year against a near 15 per cent drop in the TASI.