UAE market news & discussions for 31 October 2007Huge turnover on ADSM, solid turnover on DFM and both markets with increases of more than 1% today. Emaar stormed into the spotlight with top trading volumes and a big jump in price. The DIFX saw 7 trades in Kingdom Hotel Investments, which rose 2.5%. |
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Third quarter financial results - reports
Another day with a large number of companies releasing Q3 and M9 earnings statements including Aramex, Du Telecom, Dubai Islamic Bank, Shuaa Capital, and Taqa Energy, and many from insurance companies. See the list of third quarter results with latest updates highlighted as further reviews are completed.
Insurance Companies
- Abu Dhabi National Insurance Company (ADNIC) - good growth in gross premiums received but increasing claims and costs, along with a modest increase in investment income for the third quarter but a fall for M9, resulted in a net fall in profits for both Q3 and M9. Share price looks about average for an insurance company with a PE of around 7, but haven't traded since last week.
- Abu Dhabi National Takaful (TKFL) - Takaful revenue was up by 50% for both Q3 and M9 but a big jump pin claims incurred resulted in a small loss for the third quarter, and a slight fall in profits for the nine month period ending 30 September 2007 compared to the previous year. Current share price indicates a 2007 PE of over 20 - quite high compared to other non-Islamic insurance companies, but typical of the Takaful ones.
- Al Ain Ahlia Insurance (AAAIC) - results released, not yet reviewed.
- Al Buhaira Insurance (ABNIC) nine months - a 30% growth in premiums received resulted in only a 10% growth in underwriting profit, while net profit fell 20% to AED 81m dhs after the poor performance of the GCC stockmarkets. Their Al Khan and Al Nahda residential projects are reported to be progressing on schedule.
- Al Khazna Insurance Company (AKIC) - moderate growth in underwriting revenue, not as much growth in costs, no growth in M9 investment income but 50% growth in Q3 investment income. Net Profit up by 15% for M9 and 50% for Q3. Trade and other receivables jumped two and a half times to AED 250m - not something you want to see. At least cash in the bank was up 6 times to AED 135m, more than enough to pay their current bills, even if their debtors have become tardy. Share price is at an expensive looking PE of around 18 (many insurance companies in the UAE currently have single figure PEs).
- Arab Scandinavia Insurance Company (ASCANA) - results released, not reviewed yet.
- Sharjah Insurance Company (SICO) had moderate growth in premium income. The big turnaround in M9 net profits of AED 85m from last years loss was due to turning a negative into a positive - AED 74m losses in 2006 M9 became AED 75m of gains in 2007. Third quarter profit increased sharply from investment gains almost tripling from last year. Share price is at cheap looking PE of 6, similar to many other insurance companies, but haven't traded since August 2007.
- Fujairah Cement Industries (FCI) - As with other cement companies, increasing costs of production are eating into their solid revenue growth, with net profit gains a muted 10% for both the third quarter and the nine month periods. Unlike many other UAE cement companies, most profit comes from cement related activities rather than stock trading. Clinker plant expansion is expected to come online in the first quarter of 2009. Current share price indicates a 2007 PE estimate of about 8, making their shares, along with Sharjah Cement, two cement companies that we consider to be good value.
Other companies
- Abu Dhabi National Energy (TAQA) nine month revenues more than doubled but net profit rose only 50% to AED 380 million.Servicing all that debt Taqa is taking on board appears to be eating into revenue with finance costs doubled from the same time last year. Costs of sales also played a role, three times higher this year compared to last year. Shares currently look expensive based on earnings, PE of 30 is close to double the market average.
- Aramex (ARMX) celebrated 25 years of operations with 25% growth in revenues for the third quarter. Profit growth wasn't so encouraging at 14% for Q3 but nine month profit growth was better at 31% to AED 90 million. Limited information in their press release, although they did say they were optimistic about full year profits being on target. They did not specify what that target was. The market seems to share their optimism, pricing their shares at a PE of 28, almost double the average.
- Dubai Islamic Bank (DIB) profits almost doubled for M9 - helped by the income booked from the Deyaar IPO earlier this year. Profits for Q3 however, came in below forecasts at AED 390m - an increase of 25% compared to last year. Limited information from press release.
- Du Telecom (DU) revenues increased 36% from the second quarter this year as their mobile subscriber numbers increased to 880 thousand. They still lost money in the end but not as much as expected. The market wasn't impressed however, with shares falling slightly today.
- Emirates Driving Company (DRIVE) - excellent growth in revenues and third quarter profit tripled to AED 12m dhs. Net profit for the nine month period of AED 38m was 10 times the profits for the same period last year, due paartly to a big turnaround in investment gains of AED 11m, compared to a AED 6.4m dhs loss the previous year. An estimated 2007 PE of about 6 makes their shares look cheap compared to a market average of close to 3 times that, but investment income introduces an extra risk factor that may explain current prices.
- Emirates NBD (ENBD), the recently merged Emirates Bank and National Bank of Dubai, were apparently going to release results this afternoon but we haven't seen anything yet. The chairman did say they were looking at regional expansion and merger possibilities though yesterday.
- Fujairah Building Industries (FBICO) - directors report released, results not reviewed by ShareWadi.com yet.
- Gulf General Investment Company (GGICO) released limited information yesterday with profits growing just 6% for both M9 (up to AED 357m) and Q3 (up to AED 93m) but they said the outlook for Q4 was very positive.
- Gulf Navigation (GULFNAV) - nine month revenue more than doubled and both Q3 and M9 net profits tripled compared to the same period last year, however, share price still looks expensive based on earnings, at an estimated 2007 PE of around 27. They took delivery of their first Very Large Crude Carrier (VLCC) in August this year.
- International Fish Farming (ASMAK) results released yesterday, showed a small loss for the third quarter which was an improvement on a bigger loss for the same period last year, and for the nine months ending 30 Sep 2007, Asmak had a small profit vs a big loss for the same period last year.
- National Bank of Fujairah (NBF) results released, not yet reviewed.
- National Corporation for Tourism & Hotels (NCTH) results released, not yet reviewed.
- Palestine Telecommunications (PALTEL) profit growth was a modest 13% for M9 and a better looking 27% for Q3. Perhaps admirable given the difficulties under which they must have to operate. Shares have only traded on 2 days this month, and prices are roughly in line with the market average PE of about 15-16.
- Ras Al Khaimah Ceramics (RAKCEC) - results announced, not reviewed yet.
- Shuaa Capital (SHUAA) released limited information indicating a modest 22% growth in net profit to AED 129m for their second quarter (their financial year runs April to March), despite revenues increasing by a much greater 62% - increasing employment costs were apparently a factor. Share price is roughly in line with market average at an estimated PE of 15 for 2007. They appear to have a new Head of Investor Relations.
- Sorouh Real Estate (SOROUH) yesterday released third quarter profit figures of AED 217m, up an encouraging 39% but not so impressive when revenues increased by 165% - the difference explained by no change in fair value of investment properties this quarter, while last year a gain of AED 150m was booked. Current share price is roughly in line with market average based on earnings, with a 2007 PE estimate of 15. That may prove to be cheap if profit growth can be matched to expected revenue growth.
- Sudan Telecommunications (SUDATEL) statements released but put aside for later review - format is unusual. However they do come with appears to be a nice flowery border.
- Umm Al Quwain Cement (QCEM) - little growth in profits and increasing costs of sales resulted in falling gross profits for both Q3 and M9. However, their stock trading saved the day with nine month profits up to AED 90m from a loss AED 12m the same time last year. Third quarter earnings also benefited with net profit rising by 30%.
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Dubai Financial Market
Once again a sterling performance for the DFMGI with an impressive 3.6 billion dhs of turnover and a 1.7% gain to 5279 points. Emaar Properties (EMAAR) led the way, shooting up by 5.3% and over 1 billion dhs of traded value. At the top of both the traded value and the top rises chart (not counting the stocks rising on single small trades).
Other stocks trading heavily were DFM up just 0.4%, DEYAAR closing flat, Dubai Investments (DIC) up just 0.6%, Amlak Finance (AMLAK) up 1.7%, Dubai Islamic Bank (DIB) up 0.9% and AIRARABIA, also closing flat. Good rises for Union Properties (UPP) up 2.3%, and OIC unusually busy with a 2.2% increase.
Only 6 losers today, GGICO down 3.9%, Arabtec (ARTC) down 2.3%, Tamweel (TAMWEEL) down 1.7%, and Du Telecom (DU) and Tabreed (TABREED) less than 1%.
Abu Dhabi Securities Market
ADSM saw turnover of 2.76 billion dhs, a considerable amount for the Abu Dhabi borse in one day. The index moved up an agreeable 1.4% to 4272 with solid gains on big turnover for ARKAN, up 4.7% and 654m dhs trading, Oasis Leasing (OILC) up 3.6% and 567m dhs trading, Aldar Properties (ALDAR) up 6% and 485m dhs trading, and Sorouh Real Estate (SOROUH) up 3.5% and 416m dhs trading.
A couple of other standout gains on decent activity were for ADNH up 3.8%, Abu Dhabi Islamic Bank (ADIB) up 3.5% and AGTHIA up 3%. Etisalat (ETISALAT) rose just 0.9% to 22.50.
Commercial Bank International (CBI) fell 3.2% on highish turnover and Aabar Petroleum (AABAR) fell just 0.5%. Other stocks that fell were on low trading volumes.
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