GCC Earnings Slow as Key Sectors Weigh on Profitability in Late 2025

Corporate earnings across the Gulf markets declined in the fourth quarter of 2025, reaching a three-year low as weaker performance in key sectors weighed on overall profitability.

The drop in earnings was recorded both on a quarterly and annual basis, with most markets reporting lower results. Saudi Arabia accounted for the largest share of the decline, reflecting pressure across core industries, while Abu Dhabi and Dubai were among the few markets to post growth.

The downturn was driven primarily by the performance of energy and materials companies. Lower earnings in these sectors reflected a combination of softer pricing conditions and base effects following stronger results in previous periods. Telecommunications and consumer-related segments also reported weaker outcomes, partly due to the absence of one-off gains that had supported earlier comparisons.

Financial institutions provided partial support to overall results. Banks reported higher profits compared to a year earlier, although performance weakened on a quarterly basis as rising costs and higher provisioning levels affected margins. Real estate companies recorded growth, while utilities returned to profitability.

Despite the decline in earnings, total revenues across listed companies continued to expand, reaching a new high for the region. However, this growth did not translate into higher profits, pointing to margin pressures across several sectors.

The quarterly results were also accompanied by softer investor sentiment. Market data indicates reduced trading activity and net foreign outflows during the period, suggesting a more cautious approach among investors despite ongoing structural reforms and diversification efforts across GCC economies.

On a full-year basis, corporate profits declined for a third consecutive year, underlining the continued influence of commodity cycles and sector-specific dynamics on regional performance.

Overall, the data points to a mixed picture. While underlying economic activity and investment pipelines remain intact, earnings are increasingly shaped by sector-level pressures, cost dynamics and changing investor behaviour.