The Group Securities: Weekly Report on QSE Performance, 29 April - 3 May 2018

General Index Retreats Due to Some Statements Showing Negative Results

The performance of the stock market was strongly affected last week by the disclosure of the first quarter results of 17 companies. Many of these results were surprising, some in a positive way, others in a negative. On the positive side of things, Industries Qatar, Woqod, and Mesaieed recorded significant gains in profits, and Vodafone Qatar escaped loss and made its first quarterly profit. On the other hand, Qatar First Bank’s losses deepened, Mazaya became unprofitable, and the profits of Ezdan, Barwa, Gulf International, UDC, Khaleej Takaful, and Qatar-Oman declined. Amidst these developments, and with the distribution of profits to holders of indices units, prices fell after the first day, and the index fell below 9000 points to reach the level of 8806 points. Total capitalization shed about QR17.7 billion, and P/E ratio retreated to a multiple of 12.58, in hopes performance will pick up once again in the second quarter.

In depth, the general index decreased by about 282.3 points or 3.11%, to the level of 8806 points, and Al Rayan Islamic Index dropped by 3.85%. All sectoral indices declined, especially Real Estate, Telecommunication, Insurance, and Transportation. The share price of 36 companies declined, but the shares of 6 companies only rose, while 3 companies maintained a stable share price. It has been noticed that the share price of Ezdan was the biggest loser, down by 17.3%; followed by Ooredoo by 11.9%, Milaha by 9.8%, Barwa by 8%, Mazaya by 7.3%, and Qatar Insurance by 6.95%. In contrast, the share price of General Insurance was the top gainer, up by 3.16%; followed by Qatari German Medical Devices by 3%, Doha Insurance by 5.5%, then Industries Qatar 2.8%.

Total trading volume decreased by 7.4% to QR1233 million in a week, and the average daily trading declined to QR246.6 million. Mesaieed led the traded shares with a volume of QR239.8 million, followed by the share of Woqod with QR126.6 million, QNB with QR109.4 million, Industries Qatar with QR99.3 million, Vodafone with QR78.3 million, and Nakilat with QR77.4 million. It was noticed that Qatari individual investors made net purchases of QR27.9 million, while non-Qatari individuals made total net purchases of QR1.12 million. Qatari portfolios on the other hand made net sales of QR4.7 million, whereas non-Qatari portfolios made net sales of QR24.3 million. As a result, QSE’s total capitalization decreased by QR17.7 billion to reach QR488.5 billion, and P/E ratio decreased to a multiple of 12.53 from 13.03 recorded in the previous week.

Corporate News:

1.      Industries Qatar’s net profit amounted to QR1.2 billion in the first quarter of 2018, compared to QR928 million for the same period last year. The company’s earnings per share recorded QR2.1, versus QR1.53 for the corresponding period of 2017. IQ’s gross profit for the first quarter of 2018 increased by 29.2% to QR329.2 million, while general and administrative expenses decreased by 55% to QR38.8 million. The selling expenses rose to QR14.4 million, and the company's share in the results of joint ventures and associates achieved a 33.6% hike to QR879.7 million. As a result, the net profit increased by 36.6% to QR1267 million.

2.      The net profit of Al Khaleej Takaful amounted to QR5.83 million in the first quarter of 2018, compared to QR13.87 million for the same period last year. The company’s earnings per share recorded QR0.23 in this first quarter, versus QR0.54 for the corresponding period of 2017. This quarter’s net surplus increased to QR24.8 million. After deducting other expenses, the income surplus is multiplied to settle at QR16.8 million, compared to QR3.1 million for the corresponding period of 2017. The gross income from investments declined by 37.2% to QR14.5 million, and expenses dropped slightly to QR8.7 million, and the net income decreased by 58.3% to QR5.8 million.

3.      Woqod’s net profit amounted to QR317.8 million in the first quarter of 2018, compared to QR204.7 million for the same period of the previous year. The company’s earnings per share recorded QR3.03 in this quarter, versus QR1.77 in the previous year. The gross profit from Woqod’s activity increased by 16.4% to QR310.5 million, and general and administrative expenses dropped by 24.8% to QR100.2 million. As a result, the net profit increased by 55.1% to QR317.8 million, of which QR301.2 million was attributable to shareholders. The company incurred a loss resulting from a negative change in the fair value of some investments worth QR30.6 million. The comprehensive income reached QR271.6 million.

4.      Mannai net profit amounted to QR91.4 million in the first quarter of 2018, compared to QR90.1 million for the same period last year. The corporation’s earnings per share recorded QR1.99 in this quarter, versus QR1.97 in the previous year. Mannai’s gross operating profit multiplied to QR580.9 million. The company generated QR26.5 million from other income and from its share in the profits of associates. Expenses shot up to more than the double, amounting to QR392.5 million, financing costs increased as well to QR57.8 million, and the cost of amortization rose to QR48.7 million. After deducting QR17.1 million in taxes, the net profit increased slightly to QR90.7 million attributable to shareholders.

5.      Qatari German Medical Devices net loss amounted to QR2.23 million in the first quarter of 2018, compared to a net loss of QR2.21 million for the same period last year. QGMD’s loss per share stood at QR0.19 unchanged from last year. QGMD’s gross profit recorded a slight increase to QR275 thousand in the first quarter of 2018, while other revenues decreased slightly to QR645 thousand. In contrast, total expenses rose slightly to QR2.5 million, while financing expenses dropped to less than QR900 thousand. As a result, the loss in this first quarter stood at QR2.2 million.

6.      QFB's net loss amounted to QR28.6 million in the first quarter of 2018, compared to a net loss of QR9.56 million. QFB’s loss per share reached QR0.14, compared to a loss of QR0.5 per share in 2017. The total income decreased by 24% to QR92.4 million in the first quarter of 2018, of which QR83.7 million were generated from non-banking activities. Total expenses decreased by 4% to QR123.9 million. As a result, the company's loss in the first quarter tripled to about QR28.6 million.

7.      The net profit of United Development Company (UDC) amounted to QR215 million in the first quarter, compared to QR231 million for the same period last year. UDC’s earnings per share recorded QR0.61, versus QR0.65 for the corresponding period of 2017. UDC’s gross profit stood at QR289.5 million in the first quarter with a slight increase. General and administrative, as well as sales and marketing expenses increased by 7.4% to QR89.4 million. Net financing cost stood at QR44.4 million. After adding other income, the net profit attributable to equity holders decreased by 7% to QR214.5 million in this quarter.

8.      The net loss of Mazaya Qatar amounted to QR6.32 million in the first quarter of 2018, compared to QR5.02 million for the same period last year. The company’s loss per share reached QR5.5, versus earnings per share of QR4.3 in 2017. Mazaya conducted no construction activities in the first quarter. Its income amounted to QR7.2 million and was limited to rent and properties. After subtracting the operating cost, operations revenues fell more than half to QR6.3 million. The company estimated a gain from the fair value of investment property of QR4.75 million. It was noticed that public and administrative expenses increased by 47.2% to QR5.3 million, and the cost of financing increased by 44.6% to QR12.1 million. As a result, the company recorded a loss of QR6.32 million, versus a profit of QR5 million in the corresponding period of 2017.

9.      The net profit of Qatar-Oman Investment Company (QOIC) amounted to QR5.40 million in first quarter of 2018, compared to QR9.57 million in the previous year. QOIC’s earnings per share recorded QR17.2 in this quarter, versus QR30.4 in 2017. The company’s net investment and interest income decreased in the first quarter by 42.4% to QR7 million, while the total expenses rose by 18% to QR1.65 million. As a result, the net profit decreased by 43.5% to QR5.40 million. It should be noted that the company incurred a loss resulting from a negative change in the fair value of some investments amounting to QR3.2 million, which resulted in the decrease of the comprehensive income to QR2.22 million, compared to a comprehensive loss of QR401 thousand in 2017.

10.  Al Meera Consumer Goods’ net profit amounted to QR43.33 million, compared to QR40.51 achieved during the same period of the previous year. Al Meera’s earnings per share amounted to QR2.17 in this quarter, versus QR2.03 in 2017. Al Meera total profit from core business increased by 10% to QR115.7 million, and its revenues from shop rentals and other sources increased by 3% to QR 26 million. Total expenses increased by 7.5% to QR 98 million. As result, net profit posted in this quarter increased by 7% to QR43.33 million. The fair value of some investments knew a positive change worth QR5.1 million, thus pushing the comprehensive income up to QR48.5 million.

11.  Gulf International Services' net profit reached QR9.5 million in the first quarter of 2018, compared to QR15.1 million in 2017. The company’s earnings per share stood at QR0.05, versus QR0.08 in the previous year. GIS gross profit increased by 7.5% in the first quarter to QR94.4 million, and other revenues climbed to QR17.8 million. In contrast, general and administrative expenses decreased by 4.5% to QR58.8 million, and net financing cost increased by 51% to QR43.8 million. As a result, the net profit decreased by 37.1% to QR9.5 million, and the comprehensive income retreated to QR7.1 million.

12.  Barwa net profit amounted to QR405 million in the first quarter of 2018, compared to QR479 million for the same period last year. The company’s earnings per share recorded QR1.04, versus to QR1.23 in 2017. The company’s net rental and leasing income increased by QR5 million to QR255.1 million in the first quarter of 2018, while the net revenues generated from advisory services rose slightly to QR25.6 million. The fair value gains from real estate investments declined by 12.3% to QR211 million, and general and administrative expenses dropped by half to reach QR25.9 million. After deducting depreciation and other expenses, the net profit fell by 15.5% to QR404.9 million, and comprehensive income reached QR407 million.

13.  Milaha’s net profit reached QR260 million for the first quarter of 2018, compared to QR236 million for the same period of the previous year. The company’s earnings per share amounted to QR2.29, versus QR2.08 for the same period of 2017. Milaha’s gross operating profit in the first quarter of 2018 increased by 7.7% to QR697.8 million. The total expenses also increased, this time by 9.7% to QR202.8 million. On another hand, the net profit rose by 10% to QR259.8 million. It should be noted that the company had a net profit of QR147.5 million, which all resulted in the increase of the comprehensive income to QR407.3 million.

14.  The net profit of Mesaieed Petrochemical Holding amounted to about QR357 million in the first quarter of 2018, an increase of 68% compared to QR212 million achieved in the same period of the previous year. The holding’s earnings per share reached QR0.28 versus QR0.17 for the corresponding period of 2017. Mesaieed’s first quarter revenue increased by 65.7% to QR329.7 million. Expenditures rose by 47.7%, or QR6.5 million, and tax rebates increased by 88.8% to QR34 million. As a result, the net profit rose 68% to QR356.6 million.

15.  Vodafone Qatar's net profit amounted to QR17.5 million compared to a net loss of QR74.2 million for the same period last year. The company’s earnings per share reached QR0.02 in Q1 2018, versus a loss per share of QR0.09 for the corresponding period in 2017. The revenues of Vodafone Qatar rose slightly in the first quarter of 2018 to QR531.9 million. The company’s connectivity and network expenses decreased marginally to QR336.9 million, and personnel costs rose to QR60.4 million. As a result, the company recorded its first net profit of QR18.9 million, versus a loss of QR74.2 million in the corresponding period of 2017.

16.  The net profit of Aamal amounted to QR115.8 million for the first quarter of 2018, compared to QR114.5 million for the same period last year. Aamal’s earnings per share recorded QR0.18, unchanged compared to the corresponding period in 2017. The gross profit of Aamal retreated by 46.4% to QR117.1 million in the first quarter of 2018, and expenses dropped by 13.7% to QR28.9 million. The company's share of profits from investments in other companies amounted to QR31.2 million in this quarter, compared to QR2.2 million recorded at the same period in 2017. As a result, the company's profit decreased by 16.9% to QR116.1 million.

17.  Ezdan’s net profit amounted to QR103 million, compared to QR946 million for the same period of the previous year. The company’s earnings per share recorded QR0.04 versus QR0.36 for the corresponding period in 2017.

Economic Developments:

1.      OPEC oil price in Qatar stabilized during the previous week until Thursday 2^nd May over US $70 per barrel, a decrease of US $0.53 to US $70.47 per barrel, compared to the previous month’s price tag of US $71 per barrel.

2.      Qatar‘s trade balance achieved a surplus of QR13.4 billion during the month of March, an increase of 45.3% and about QR4.2 billion, compared to the same month of the previous year.

3.      Dow Jones index lost about 392 points to drop to the level of 23930 points until closing on Thursday. US dollar increased to $1.20 against the euro, but decreased against the yen at ¥109.06 per dollar. Gold decreased by about US $8 to the level of $1318.5 per ounce.