An Echelon Media Company
Monday May 10th, 2021
Markets

Sri Lanka’s corporate earnings fall 9.6-pct in Sept

ECONOMYNEXT- Sri Lanka’s corporate earnings among 264 listed firms fell 9.6 percent from a year earlier in the September 2019 quarter to 45.8 billion rupees, an equities report said.

“Lackluster performance in insurance, consumer services and food, beverage and tobacco weakened the quarterly earnings mainly owing to the lower consumer spending stemmed from subdued economic activities,” First Capital Research said in its report.

Low consumer spending was a result of a currency collapse leading to a credit contraction and bad loans coupled with Easter Sunday attacks targeting tourism.

Consumer services sector contributed 495 percent to earnings dip followed by a 365 percent fall in transport sector earnings and a 48 percent decline in the insurance sector.

“Consumer services sector earnings declined and posted a loss of 1.67 billion rupees as a result of drop in tourist arrival subsequent to the Easter Sunday attacks,” First Capital Research said.

“The insurance sector earnings recorded a substantial drop mainly due to earnings decline in Softlogic Life Insurance 85 percent from a deferred tax adjustment and Union Assurance 91 percent due to the increased transfer of insurance contract liabilities to the life fund,” First Capital Research said.

Beverage, Food and Tobacco earnings fell 7.8 billion rupees from 8.9 billion rupees in the 2018 quarter, dragged down by Browns Investment, Melstacorp and losses witnessed across the tea plantation industry.

Browns Investment reported a loss of 1.19 billion rupees compared to loss of 0.6 billion rupees in the 2018 quarter due to higher finance and administration cost.

Melstacorp earnings dropped by 58 percent or 0.624 billion rupees due to hefty taxes while the cost of sales increase compared to last year of the same period.

However, positive earnings were witnessed in material sector, consumer, durable and apparel sector and energy sector.

Profits grew in the material sector to 108 percent or 2.79 billion rupees from 1.34 billion rupees in the 2018 quarter.

Growth was driven by Tokyo Cement earnings growth of 573 percent or 0.805 billion rupees from 0.120 billion rupees in the previous quarter as a result of operational efficiencies and increase in maximum retail price.

Consumer, durable and apparel sector’s earnings grew 13,600 percent or 1.14 billion rupees in the current quarter compared to 0.08 billion rupees in the previous quarter driven by Teejay Lanka, Hayleys Fabrics and Ambeon Holdings.

Teejay Lanka reported a growth in its earnings of 84 percent or 0.783 billion rupees from 0.426 billion rupees in the previous quarter and Hayleys Fabrics earnings grew 84 percent or 0.138 billion rupees due to export growth.

Ambeon Holdings earnings were up 184 percent or 0.156 billion rupees compared to a loss reported in previous quarter, as a result of efficiency gains, strong order book and stable cotton prices.

Energy sector posted a strong earnings growth of 646 percent in profits as a result of Laugfs Gas earnings.

Laugfs Gas reported a growth in earnings of 106 percent or 0.017 billion rupees compared to a loss in the September 2018 quarter of 0.305 billion rupees due to a higher focus on bunkering, lubricant operations and export market. (Colombo/Dec19/2019)

Tags:

Leave a Comment

Your email address will not be published. Required fields are marked *

Your email address will not be published. Required fields are marked *

Comments

Leave a Comment

Your email address will not be published. Required fields are marked *

Your email address will not be published. Required fields are marked *