Expectations, led by Saudi banks, of growth in profits of companies listed on Tadawul, by the end of the first quarter of 2024.
I expected “Al Jazira Capital “Growth.” Profits of Saudi banks It is within its coverage supported by the expansion of net interest margin and asset growth, which compensates for the decline in the profitability of telecommunications companies, as petrochemical companies begin to return to profitability.
As for the results of the first quarter of this year, Aljazira Capital expects an increase of 5.2% on an annual basis in the combined net income of the 51 companies it has under active coverage, expecting Saudi banks to lead this increase.
Saudi banks’ profit expectations in the first quarter
The increase in net income to 16.3 billion Saudi riyals will be driven by the growth in profits of Saudi banks, by 11.8% in the first quarter of this year, while cement producers will see an increase in their net income by approximately 33%.
Healthcare providers will do well thanks to growth in admission rates and improved pricing power, while tourism and transportation players will benefit from higher tourism activity and air traffic.
Expectations of petrochemical companies returning to profits
Aljazira Capital expects that petrochemical companies have begun to return to profitability after incurring losses in the fourth quarter, while telecommunications companies will see their final profits decline by 12% on an annual basis.
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The first quarter results for the petrochemical sector are the first since Aramco raised feedstock prices earlier this year.
While most of the companies listed in “Trade“ It expects that the price rise will reach the cost of production in the first quarter of 2024. Aljazira Capital does not expect the impact of the price rise to be fully achieved in this quarter.”
Aljazira Capital said in its report on Sunday that it expects the ongoing Red Sea crisis to affect the petrochemical industry due to delayed shipments (reducing revenues) and higher shipment costs (impacting margins).
Expectations of the performance of Saudi banks in the first quarter
Aljazira Capital said that net income is expected to grow Saudi banks Al Rajhi Bank, Alinma Bank, and Bank Albilad are witnessing a growth in their combined net income by 11.8% on an annual basis in the first quarter of 2024, on the back of an increase in net interest margin and growth in financial positions.
Al Rajhi Bank – the largest Islamic bank in the world – is expected to achieve a rise in net income by 5.7% year-on-year to 4.4 billion Saudi riyals, while Alinma Bank’s net income is expected to grow by 38.9% year-on-year to 1.3 billion Saudi riyals. Saudi.
Aljazira Capital expected Bank Al Bilad’s net income to rise by 10% on an annual basis to 616 million riyals.
The three banks will see a combined growth in loans of 6.3% on an annual basis during this period, with Alinma Bank leading the group with an expected growth of 16% on an annual basis.
Combined deposits are expected to rise by 7.7% on an annual basis during this period, led by a 20.2% growth in Alinma Bank deposits.
Performance expectations of petrochemical companies
Almost all petrochemical manufacturers covered by Aljazira Capital are expected to see a decline in net income year-on-year in the first quarter of the year despite a return to profitability compared to the last quarter of 2023.
Among these companies is the giant petrochemical company “SABIC”, whose net income is scheduled to decline by 35.4% on an annual basis in the first quarter to 424 million Saudi riyals.
SABIC Agricultural Nutrients’ net income also witnessed a decline of 9.7% on an annual basis during the period to 885 million Saudi riyals, with Sipchem’s net income declining by 67.8% on an annual basis to 151.3 million Saudi riyals.
