Gulf earnings season shows war-driven divide along sector, not border, lines

Earnings season in the Gulf looks very different across markets and industries: Qatar-listed companies posted their weakest 1H in at least three years, with net income down 11.4% y-o-y to QAR 23.6 bn (c. USD 6.5 bn), while UAE-listed firms went the other way, with 161 companies growing combined earnings by 16% to AED 158.3 bn (c. USD 43.1 bn), largely driven by ADX-listed players.

In Qatar, the split ran by sector. Regional lender QNB shrugged off the tensions, growing its bottom line 3.2% to QAR 8.7 bn on steady lending. Industries Qatar wasn’t as lucky, seeing its net income collapse 89% to QAR 216 mn as shipping snarls hit petrochemicals and steel. Qatar Ins. Co. sat in between, with net income down 4.8%, as conflict-linked claims ate into underwriting.

UAE players soared, largely driven by Abu Dhabi-listed firms. The emirate’s state-linked megacaps — International Holding Company (+228%), Alpha Dhabi (+92%), Adnoc L&S (+174%) — did the heavy lifting, with just 20 companies generating 73.3% of all UAE earnings. Meanwhile, Dubai didn’t fare as well, but still held largely steady. Consumer-facing players barely moved, just going up by 0.6% to AED 61.5 bn (USD 16.7 bn) — propped up by Emaar and Emirates NBD but weighed down by tourism and real estate exposure.

Capital flows back it up: July’s USD 415 mn in Gulf equity outflows hit Dubai hardest (USD 174 mn), while Abu Dhabi drew in USD 148 mn — the only Gulf bourse to gain.

Our take: The divergence is less about fundamentals and more about war exposure. Abu Dhabi’s top performers run on domestic energy infrastructure and project contracts, insulating them from shipping lane disruptions. Meanwhile, Qatar’s industrial and ins. players sit right in the conflict’s path, with petrochemicals and steel exports impacted and ins. claims going up. With no ceasefire in sight, exposed sectors, including Qatar’s industrials and Dubai’s tourism, will face continued pressure into 2H.