Sri Lanka company earnings fall in September 2015 quarter

ECONOMYNEXT – Sri Lanka’s listed company earnings contracted in the September 2015 from a year ago after growing almost 11 percent in the previous quarter, according to an analysis done by Capital Alliance Securities Ltd.

Overall earnings fell 6.2 percent in the September 2015 quarter to 47.7 billion rupees from the year before.

Plantations and oil palm firms were the worst hit, suffering heavy losses owing to the commodities slump, the brokerage said in an earnings update.

But overall corporate earnings in the 12 months to September 2015 grew 2.1 percent to 203.2 billion rupees from the previous year.

This was supported by “low interest rates and improving disposable incomes driving consumption,” the report said.

The biggest contributors to earnings in the September 2015 quarter came from banks, finance and insurance companies, which contributed 43 percent.

They were followed by beverage, food and tobacco firms which contributed 19 percent and diversified holdings which contributed 13 percent.

The motor sector had the fastest growth in earnings, up 54 percent in the September 2015 quarter from a year ago, owing to continuing strong growth in vehicle imports.

Earnings of healthcare and services sector firms grew by 50 percent during the quarter while that of the beverage, food and tobacco sector grew by 35 percent.

The CSE was trading on a price-to-earnings ratio of 13.8 times in the previous 12-months and a price-to-book value of 1.3 times

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Manufacturing company earnings grew 20 percent during the September 2015 quarter from a year ago supported by lower energy tariffs and higher consumption.
 
The two listed oil palm, Carson Cumberbatch and The Bukit Darah firms suffered a collective loss of 1.5 b billion rupees during the September 2015 quarter.

Plantations sector companies suffered an overall net loss of 924 million rupees with most firms in the red mainly because of the slump in tea and rubber prices and higher wage costs.

The two telcos, Sri Lanka Telecom and Dialog Axiata saw net profits slump 65 percent to 1.3 billion rupees in the September 2015 quarter from the year before largely owing to higher foreign exchange losses.  (Colombo/December 12, 2015)
 

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