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The first quarter of the year will see a mixed earnings bag across Saudi equities, according to a Riyad Capital research note seen by EnterpriseAM. With financials yet to hit the tape, the firm outlines what to expect this earnings season, drawing on a sample of Tadawul-listed names as companies begin reporting.
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Fat commissions are in the cards for Saudi banks: The banking sector is expected to post a 15% y-o-y increase in net income to SAR 19.1 bn across nine covered banks in 1Q. Al Rajhi Bank is forecast to clock the highest y-o-y gains in 1Q, up 34% to SAR 5.9 bn, while Saib is set to post the highest growth in net advances growth (+22% y-o-y to SAR 103.4 bn).
A gov’t lending sprint is supporting liquidity: Aggregate deposits are projected to grow at a modest y-o-y rate (+4% y-o-y to SAR 2.4 tn) in 1Q, but government liquidity remains supportive, with SAR 55.3 bn inflows in the first two months of the year. Banks also ramped up sukuk issuances and bond allocations ahead of a potential rate downcycle, the firm said.
On telcos: The report’s telecom picks — stc, Zain KSA, and Mobily — are projected to deliver an 8% y-o-y growth in net income to SAR 4.5 bn in 1Q, supported by seasonal tailwinds during Ramadan and an uptick in the number of subscribers. Revenues across the three major players are projected to grow 2% y-o-y to SAR 26.6 bn.
The top performers: Zain KSA is expected to see the highest y–o-y growth in net income buoyed by efficiency gains, logging a 124% increase to SAR 149 mn. Meanwhile, stc is forecast to remain the top earner, with a 5% y-o-y increase to SAR 3.7 bn.
Healthcare players are also in for a solid quarter: The two listed healthcare operators included in Riyad Capital’s analysis — Suleiman Al Habib Medical Group and Mouwassat Medical Services — are expected to report a 13% y-o-y increase in net income to SAR 817 mn in 1Q, driven by continued momentum in new facilities. Meanwhile, Revenues are forecast to rise 25% y-o-y to SAR 4.1 bn, despite a potential dip in patient volumes from Ramadan. Suleiman Al Habib is set to account for the lion’s share of net income, increasing 16% y-o-y to SAR 637 mn.
