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Listed companies’ earnings up 8% in June

Published on Ceylon Today | 2017-09-03

Sri Lanka’s listed companies’ June quarter earnings grew 8% YoY to Rs 54.9 billion dominated by healthy performance in Banks sector (+23%YoY) and Food, Beverage & Tobacco sector (+54%YoY), First Capital said in its research note.

Capital Goods sector (+23%YoY), Insurance sector (+36%YoY) and Health Care Equipment & Services sector (+22%YoY) also contributed to the positive earnings growth during the quarter. However, the earnings growth was partially offset by negative earnings in Consumer Services sector (-707%YoY), Energy Sector (-129%YoY) and narrowed earnings in Materials sector (-30%) with the overall slow growth in the economy, increase in commodity and energy prices and continued impact of the flood influencing consumer spending.

Growth in earnings in Banks and Food, Beverage & Tobacco sector:

Banks sector and Food, Beverage & Tobacco sector were the largest……contributors to earnings by achieving profits of Rs 15.6 billion (+23%YoY) and Rs 12.02 billion
(+57 %YoY) respectively during the quarter.

Commercial Bank (+18%YoY), Sampath Bank (+39%YoY) and Hatton National Bank (+2%YoY) continued to jointly represent 70% of the sector earnings. One off gains in Browns Capital PLC due to disposal of an investment, loss reversal in The Lion Brewery and turnaround in plantation companies’ earnings connected to increase in tea prices led to the growth in Food, Beverage & Tobacco Sector earnings.

Market earnings growth was partially offset by Consumer services and Energy sectors posting losses of Rs 917 million (-707%YoY) and Rs 591 million (-129%YoY) respectively while Materials sector profits slowed to Rs 1,718 million (-30%YoY). Consumer services was impacted with the overall negative performance in leisure segment connected to slow growth in tourist arrivals while Energy sector earnings were influenced by surge in global LPG prices. The drop in earnings in Materials sector was caused by reduced volumes in Chevron Lubricants and increase in commodity prices including industrial metals.(IG)

First Capital is an investment bank offering services as Stock Brokers in Sri Lanka. The Company acts as a conduit between retail and institutional clients and the secondary market of the Colombo Stock Exchange. First Capital’s best-in-class research team provide a series of actionable trade recommendations, daily and periodic market commentaries and publications for Stock Brokers in Sri Lanka.