Last year was one most corporations in the UAE would like to forget, as profits fell almost across the board. All told, UAE's listed companies saw profits drop 25 per cent to Dh31.48 billion thanks to shrinking oil receipts and a tightening of global trade, according to a research report from Global Investment House. Not surprisingly, property firms were the hardest hit as their combined profitability dropped 74 per cent to Dh2.2bn, from Dh8.7bn in 2008. The property market had been one of the main drivers of the country's non-oil economy. However, property prices in several areas have almost halved from their peak in the middle of 2008. In response, developers shelved, scaled back or put on hold projects worth hundreds of billion of dollars.
All but two property companies saw their annual profits decline. Emaar, the biggest property developer by market capitalisation in the region, posted a full-year profit of Dh166 million last year, down almost 50 per cent from 2008. Profit for all three listed developers on the Abu Dhabi Securities Exchange also dropped, with RAK Properties posting the steepest decline at 71 per cent last year. The banking sector was the second-biggest loser as provisioning for bad loans and a credit squeeze affected lenders' balance sheets in the wake of the economic slowdown.
The aggregate profit of the listed lenders dropped 22 per cent down to Dh13.8bn, from Dh17.6bn in 2008. However, all was not gloomy as 10 banks managed an increase in profits last year. Nine out of 10 are listed on the Abu Dhabi bourse, with Commercial Bank of Dubai the exception. "The UAE national banks' mediocre performance during 2009 can be attributed to bad debt triggered by the global financial crises and regional problems that resulted in heavy provisions," the Global research note said.
The telecommunications sector was positive as the combined profit for the telecoms companies Du and Etisalat rose 6.8 per cent. It was the smallest sector - consumer companies - that performed the best, with profit up 56 per cent last year. The group was led by strong results from Abu Dhabi National Hotels and the Dubai Refreshment Company. skhan@thenational.ae
