• Riyad Bank net rises 13.5% • Saudi Hollandi Bank net soars 20% • Almarai profit up 7.3% JEDDAH – Riyad Bank, Saudi Arabia's third-largest lender by assets, posted a 13.5 percent increase in first-quarter net profit on Sunday, broadly in line with analysts' estimates. The bank made SR1.08 billion ($288 million) in the three months ending March 31, compared with SR951 million in the same period of 2013, it said in a stock market statement. It cited an increase in total operating income – which climbed 12 percent year-on-year to SR1.93 billion – for the profit rise without elaborating. Meanwhile, Saudi Hollandi Bank made a profit of SR417 ($111.19 million)in the three months to March 31, according to a bourse statement. Saudi Hollandi Bank posted a 20 percent increase in first-quarter profit on Sunday, in line with analyst estimates as its operating income also rose. The bank made a profit of SR417 million ($111.19 million) in the three months to March 31, up from 346 million riyals a year earlier, according to a Saudi Arabia bourse filing. The bank attributed its bigger profit to increasing operating income, which rose 30 percent to SR757 million. On the dairy sector, Almarai Co said on Sunday its first-quarter profit rose 7.3 percent, missing analysts' estimates despite higher sales and a one-off gain from an acquisition. Almarai made a net profit of SR273.6 million ($73 million) in the three months to March 31, up from SR255.1 million a year earlier, it said in a bourse statement. Analysts on average forecast Almarai would make a quarterly profit of SR284.9 million. The company had sales worth SR2.72 billion in the first quarter, up 12.3 percent from a year earlier. Almarai fell 0.8 percent after the dairy firm posted a 7.3 percent increase in first-quarter profit that was marginally below analysts' estimates. Saudi Hollandi “will maintain double-digit growth in net profit in 2014 and 2015 and will outperform peers”, NBK Capital wrote in a note, adding however that the stock's sustained surge - it has gained 79 percent since the start of 2013 - meant it had limited upside. However, the Saudi Tadawul All Share Index fell 0.3 percent to 9,531 points on Sunday. NCB Capital expects that for the stocks it covers in the Saudi market (representing around 89 percent of total TASI net income in 2013), to record a YoY increase of 13.7 in Q1 2014 net income percent to reach SR23.7 billion. NCB Capital expects SABIC's net income to grow by 9.4 percent YoY and 16.7 percent QoQ to SR7.2 billion, equivalent to 30 percent of the total expected net income of the Saudi market. NCB Capital said the key reasons behind the expected strong YoY growth in Q1 earnings is 1) the 85 percent YoY increase in net income for STC to SR2.9 billion due to the expectation of the sustainability of the cost cutting initiatives and 2) the 16 percent YoY increase in net income for the Petrochemical sector to SR10.2 billion. The Petrochemicals sector is expected to benefit from higher prices (except fertilizers and EG) and the improvement in operating rates. NCB Capital expects Kayan and Petrochem to report net profits in Q1 2014E compared to net losses in Q1 2013. The investment bank expects a 2.6 percent YoY increase in the Banking sector earnings. This YoY growth is mostly driven by a nine percent increase in NSCI due to a loan growth of 10.1 percent. lbasis, the Banking sector is expected to increase 18.8 percent, mostly due to lower expected provisions. Al Rajhi is expected to report a net income of SR2.0 billion, down 1.5 percent YoY but up 30.7 percent QoQ. Food and Retail sectors are expected to record a YoY increases in net income of 11.8 percent and 17.2 percent, respectively. The food sector growth is led by both Savola and Almarai, where NCB Capital expects YoY net income growth of 12 percent. The expected growth in the Retail sector is led by new store openings, along with the continued high single digit organic growth. The firm notes significant one-offs may as usual distort the results. Other Middle East markets were muted as Saudi Arabia investors showed little reaction to a slew of first-quarter earnings, and Dubai eased from Thursday's five-year peak. Dubai index dropped 0.6 percent to 4,590 points. Abu Dhabi index rose 0.9 percent to 4,966 points. Qatar index climbed 1.0 percent to 12,098 points. Kuwait index too edged up 0.1 percent to 7,583 points. Bahrain index rose 0.5 percent to 1,374 points. Yet Egypt's index fell 2.3 percent to 7,524 points. In Abu Dhabi, Aldar surged 5.1 percent to its highest close since May 2010. The state-run developer said it might float property management unit Khidmah through an initial public offer sometime in coming years. Dubai eased 0.6 percent, its first decline in six sessions. Emaar Properties and Dubai Financial Market were the main drags, sliding 1.7 and 2.0 percent respectively. Egypt's main index dropped 2.3 percent to its lowest close since Feb. 11. The benchmark has fallen 14.7 percent from March 26's five-year closing high. The sell-off came after Abdel Fattah Al-Sisi said he would run for president. Investors, most of whom favor Sisis, had bid up the market ahead of the announcement and took profits afterwards. The market is still up 10.9 percent year-to-date. — SG/Agencies
