Price controls reduce Sri Lanka Sept quarter company profits
Dec 18, 2017 07:47 AM GMT+0530 | 0 Comment(s)
ECONOMYNEXT – September quarter earnings of Sri Lanka’s listed companies dipped 2% to Rs60.1 billion from a year ago, dragged down largely by losses at energy firms owing to price controls, an equities research report said.
First Capital Equities said the September quarter earnings dip was driven by the adverse performance of Energy (-108%YoY), Diversified Financials (-18%YoY) and Consumer Services (-54%YoY) Sectors.
“The dip in earnings diminished the effect of positive earnings growth in Food, Beverage and Tobacco (+9%YoY) and Banks (+6%YoY) Sectors and one-off gains in Food, Staples and Retailing (+178%YoY) Sector,” it said.
“The primary source of decline in September earnings was the Energy Sector (-108%YoY) which saw a loss of Rs137 million (Sep 2016 = Rs 1,731 million), driven by LIOC (-112%YoY) and LGL (-85%YoY) attributable to higher oils prices and LP Gas prices that drove costs while selling price remained fixed.”
The report said the Diversified Financials Sector (-18%YoY) also almost equally contributed to the earnings dip where profits declined to Rs 8.3 billion (Sep 2016 = Rs 10.1 billion) driven by LOLC (-23%YoY).
“Most finance companies in the sector saw higher net impairment losses as effects of floods, spilled over to the September quarter,” First Capital Equities said.
(COLOMBO, December 18, 2017)