The impact of the global financial crisis showed on the profitability of the GCC (Gulf Cooperation Council) listed companies in 2008. According to the Kuwait-based Global Investment House (Global) report released yesterday, the total net income of GCC companies dropped by 19.8 percent to $45.6 billion in 2008 compared to $56.9 billion in 2007.
The study covers 466 locally listed companies, of which 153 are from Kuwait, 96 from Saudi Arabia, 88 from UAE, 52 from Oman, 39 from Qatar and 38 from Bahrain.
Out of the total companies, 283 companies suffered a decline in their annual earnings, while 109 firms incurred losses.
Saudi Arabia’s corporate profits fell by 8 percent to $20.4 billion in 2008, as compared to $22.2 billion in 2007. Out of 96 companies, 13 companies incurred losses, while 45 companies suffered a fall in their profits.
Saudi Basic Industries Corp. (SABIC) registered the highest profits in 2008 at $5.9 billion, a drop of 18.6 percent from 2007 level of $7.2 billion. The drop was driven by a combination of decline in commodities prices led by oil and slowing global demand on petrochemical products.
Oil has fallen nearly $100 a barrel from its record high of over $147 last July, but has flattened out to trade around $50 for most of this month in part due to supply cuts by the Organization of the Petroleum Exporting Countries (OPEC).