Strong performance in multiple sectors support to boost all-time high quarter earnings
View(s):March 2021 quarter earnings surged by 207 percent YoY for 253 companies, according to First Capital Research. It said March quarter earnings surged by 207 percent YoY to Rs. 110.8 billion led by Diversified Financials (988 percent YoY), Capital Goods (214 percent YoY), Food, Beverage and Tobacco (669 percent YoY), Banks (70 percent YoY) and Materials (267 percent YoY).
“However, sluggish quarterly performance was witnessed in Consumer Services (-643 percent YoY) and Real Estate (-19 percent YoY), Consumer Durable and Apparel (-170 percent YoY) and Insurance (-4 percent YoY),” the research unit said in a media release.
Multiple sectors performed energetically, it said adding that Diversified Financials, Food, Beverage and Tobacco, Capital Goods, Banks and Materials sectors witnessed exceptional results.
Diversified Financials recorded a growth of 988 percent YoY primarily driven by the growth in LOLC (7,781 percent YoY) boosted by net other income and PLC (People’s Leasing – 2,936 percent) owing to the reduction in impairment.
Food, Beverage and Tobacco sector earnings grew 669 percent YoY to Rs.16.7 billion led by MELS (Melstacorp), NEST (Nestle), BUKI (Bukit Darah) and CARS (Carsons). MELS earnings spiked by 255 percent YoY due to an increase in other income and lower taxation rate. Capital goods sector witnessed a growth of 214 percent YoY benefited from remarkable performance in HAYL (Hayleys-1,417 percent) due to the strong performance in Hand Protection and Consumer and Retail segments while also benefiting from currency depreciation.
Further the sector was benefited by TILE (Lanka Floortiles – 962 percent YoY), LWL (Lanka Walltiles- 1,753 percent) and RCL (Royal Ceramic – 330 percent YoY) supported by the import restrictions. Banks witnessed a 70 percent YoY growth in earnings to record at Rs.24.8 billion primarily driven by COMB (Commercial -79 percent YoY), SAMP (Sampath -91 percent) and HNB (55 percent). Profits were boosted due to financial investment gains (forex and market to market gains) coupled with reduction in impairment provisioning. The material sector witnessed a 267 percent YoY largely benefited by DIPD (Dipped Products -1448 percent YoY), LLUB (Lanka Lubricants -198 percent YoY) and TKYO (Tokyo Cement – 92 percent YoY).
Consumer Services and Real Estate illustrated a dull performance while the tourism industry continued to be adversely influenced.
Consumer Services sector earnings recorded a dip of 643 percent YoY. Real Estate sector earnings (-19 percent YoY) have slowed down due to the ongoing pandemic, out of which RIL (RIL Property and SHAW (Shaw Wallace) witnessed a decline in earnings by 65 percent YoY and 89 percent YoY, respectively.