March 2018 Quarter earnings were up by 28.5% YoY for 282 companies, according to the Quarterly Results Overview released by First Capital Research.
March 2018 quarter earnings spiked by 28.5% YoY to Rs 98.0 billion, which includes one-off profit, arising from disposal of Janashakthi General (approximately Rs 7.0 billion) by JINS and UAL’s change in the contract liability due to transfer of one-off surplus amounting to Rs 3.4 billion.
Excluding the two one-off gains, overall market earnings grew by 15.4% YoY to Rs 87.5 billion dominated by healthy performances in Food, Beverage and Tobacco (+41% YoY), Capital goods (+26% YoY), and Banking (+21% YoY) overcoming the negative effect of Diversified Financial (-11% YoY), Material (-36% YoY) and Real Estate (-60% YoY).
The Food, Beverage and Tobacco, Bank & Capital Goods sectors boosted earnings performance, the report added.
Food, Beverage and Tobacco sector saw an impressive earnings growth of 41% YoY to Rs 17.0 billion, driven by LION (+256% YoY), MELS (+2273% YoY) and DIST (+134% YoY). The banking sector continued to remain the largest contributor to earnings by achieving a profit Rs 17.3 billion (+21% YoY) led by SAMP (+41% YoY), HNB (+21% YoY) and COMB (+14% YoY). Capital Goods sector earnings saw growth of +26% YoY to Rs 20.1 billion, mainly driven by JKH (+100% YoY) and AEL (+177% YoY). JKH profits were boosted due to UAL’s contractual liability change resulting from the one-off surplus of Rs 3.4 billion while AEL’s profits were up on the back of fair value gains of Rs 2.4 billion on its Investment Property.
Diversified Financial, Material and Real-estate sectors weakened the earnings growth, however. Diversified sector saw earnings dipping by -11% YoY to Rs 15.2 billion due to substantial profit in LOLC (-74% YoY) resulting from large one-off gain in the last comparative quarter (March 2017). Material sector earnings saw a decline of -36% YoY to Rs 2.0 billion, driven by TKYO (-131% YoY) and DIPD (-57% YoY). TKYO’s earnings were affected by higher cost of sales, which eroded gross margin coupled with higher finance cost (+123% YoY), while DIPD earnings were affected by higher taxation in 4QFY18, the release concluded.