Al-Jazira Capital expects that the profits of 44 companies listed on the Saudi stock market will increase by 109.3% in the third quarter of 2021, bringing net profits to 22.2 billion riyals, compared to 10.6 billion riyals in the third quarter of 2020.
According to Arab Net, the company stated in a report that the rise is supported by the growth of the petrochemical sector during the same period by 450.3%, and the contribution of the petrochemical sector is expected to be 10.4 percent. One billion riyals, compared to 1.9 billion riyals in the third quarter of 2020.
AlJazira Capital expected an increase in the net profits of Shariah-compliant banks in the Kingdom, for the banks under coverage compared to the same quarter of the previous year, by 30.7%, supported by the increase in profits of the Bank Al-Rajhi increased by 38.5% as a result of the improvement in lending activity despite the decrease in the net interest margin.
AlJazira Capital expected that the net profit of the telecom sector would increase during the same period by 5.7% due to the good performance of STC and Mobily.
And it stated that the net profit of the cement sector is likely to decrease from the same quarter of the previous year by 14.2% due to the expected decrease in sales volume and selling price.
On a quarterly basis, AlJazira Capital expected a decrease in the total net profit of the companies under coverage from the previous quarter by 2.8% due to a decrease in the net profit of the petrochemical sector during the same period by 12.8% decrease in average product prices and gross profit margins.
Al-Jazira Capital indicated that the good performance for the third quarter of 2021 was as a result of easing the ban imposed due to the emerging corona virus, Covid-19, and the Kingdom also resumed performing the Umrah rituals for foreigners and locals in August with a limited capacity, and it is expected to gradually increase. In addition, travel bans were lifted for some countries during this quarter, and as of early September, domestic flights were allowed to operate at 100%. Furthermore, some students of a certain age group have been allowed to return to school, and these factors are expected to positively support the net profit growth of most companies.
AlJazira Capital expected that the performance of the economy in various sectors will improve during the third quarter of 2021, and that the rise in production and a good recovery in oil prices during September enhances the performance of the oil sector in This quarter, and that the non-oil sector will also benefit from the easing of restrictions imposed due to the emerging corona virus, and the consequent increase in economic activities, as the increase in vaccination rates and the decrease in the number of new cases will accelerate the recovery.
