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Profits of Sri Lanka’s list firms up 28.5-pct in March

Economy Next – 04.07.2018

By First Capital Research

ECONOMYNEXT – Profits of Sri Lanka’s listed companies rose 28.5 percent in the March 2018 quarter from a year earlier, helped by a recovery in the food and beverage firms, with earnings growing 15.4 percent after discouting one-off gains, a report by First Capital Equities shows.

March 2018 quarter earnings of 282 companies on the Colombo stock exchange went up by 28.5 percent from a year ago to 98.0 billion rupees.

The growth included one-off profit of about 7.0 billion rupees by Janashakthi Insurance from the sale of its general insurance unit and the contract liability due to transfer of one off surplus amounting to 3.4 billion rupees by Union Assurance, another insurer.

Excluding these two one-off gains, overall market earnings grew by 15.4 percent to 87.5 billion rupees from the previous year.

Earnings growth was dominated by strong performances in the Food, Beverage and Tobacco sector, which rose 41 percent, capital goods, which went up 26 percent and Banking which grew 21 percent.

These gains overcame the negative effect of lower profits in other sectors like Diversified, Material and Real Estate.

The Food, Beverage and Tobacco sector saw an “impressive” earnings growth of +41percent to Rs17.0 billion from a year ago, First Capital Equities said in their quarterly results review.

The gains were driven by Lion Brewery, whose profits shot up 256 percent as it reovered from the effects of floods which disrupted production, and a 2273 percent gain by Melstacorp and a 134 percent gain by its subsidiary Distilleries Corporation.

“The Banking Sector continued to remain as the largest contributor to earnings by achieving a profit of 17.3 billion rupees, up 21 percent from a year ago,” First Capital Equities said.

This was led by Sampath Bank whose profits rose 41 percent from the previous year, Hatton National Bank, up 21 percent and Commercial Bank, up 14 percent.  (COLOMBO, June 29, 2018)