Earnings momentum set to continue in Q2
The Peninsula
Doha, Qatar: Qatari companies enjoy robust balance sheets backed by low leverage and decent Return on Equities (RoEs), while Qatari banks stand out wi...
Doha, Qatar: Qatari companies enjoy robust balance sheets backed by low leverage and decent Return on Equities (RoEs), while Qatari banks stand out with their exceptional capital adequacy ratios, strong provision coverage and high profitability.
“We expect second quarter (Q2) 2024 earnings to continue building on the Year-on-Year (YoY) positive momentum seen since Q4 2023 and project stocks under coverage growing the aggregate bottom-line by 6 percent YoY,” QNB Financial Services (QNBFS) said in its latest report.
Overall earnings, however, should decline 4.3 percent QoQ. This follows a positive Q1 2024 for the Qatar Stock Exchange (QSE) where aggregate earnings rose YoY and QoQ 5.8 percent and 30.7 percent respectively.
The report further stated, “We see most of the YoY growth in Q2 2024 coming from banks, which are expected to book lower provisions along with some margin improvement, while Industries Qatar (IQCD) weighs down on earnings sequentially. We remain constructive on Qatari equities, which have seen a recovery in the past few weeks, including a 20-day winning streak (last seen in 2006).”
Overall, the LNG augmented by ramping up of the North Field project and the recently upgraded capacity expansion target – a significant portion of Qatar’s expected annual LNG capacity increase is already signed-off in long-term supply contracts.
