December 2020 quarterly earnings surged by 33% to Rs. 88.6bn

Consumer services, banks and real estate showed dull performance

December quarter earnings surged by 33%YoY to LKR 88.6bn led by Diversified Financials (144%YoY), Food, Beverage and Tobacco (73%YoY), Capital Goods (68%YoY) Transportation (1930%) and Materials (153%). However, sluggish quarterly performance was witnessed in Consumer Services (-177%YoY), Banks (-19%YoY) and Real Estate (70%YoY), according to a Review by First Capital Research.

The review further stated: “Diversified Financials, Food, Beverage & Tobacco, Capital Goods, Transportation and Materials sectors perform robustly: Strong performance in Diversified Financials, Food, Beverage & Tobacco, Capital Goods, Transportation and Materials sectors were witnessed on the back of recommencement of economic activities. BUKI earnings were up by 7005%YoY and CARS earnings spiked by 306%YoY supported by the gain from oil palm plantations, fair value gain through financial asset and gain from currency movements. DIST earnings were up by 37%YoY owing to the reduction in cost of sale during the quarter amidst marginal growth in revenue. Diversified Financials witnessed a growth of 144%YoY primarily driven by growth in LOFC (13658%YoY) boosted by net other income. Capital Goods sector witnessed a growth of 68%YoY benefited from remarkable performance in HAYL (301%YoY) amidst strong performance in Hand Protection, Purification Products, Agriculture and Plantation sectors, while RCL (100%YoY) and LWL (287%YoY) benefited through import restrictions. Materials sector witnessed a growth of 153%YoY largely benefited from the exceptional performance in CIC (119%YoY) and TKYO (409%YoY). Transportation sector witnessed a growth of 1930%YoY driven by back-to-back exceptional profit in EXPO (1406%YoY).”

“Consumer Services, Banks and Real Estate illustrated dull performance: However, the Tourism industry continues to be adversely influenced, hence, Consumer Services sector earnings recorded a dip of 177%YoY. Banking sector witnessed a decline of 19%YoY largely driven by SAMP (-34%YoY) and HNB (-28%YoY) impacted by the increase in impairment. Real Estate sector earnings (-70%YoY) have slowed down due to the ongoing pandemic, out of which OSEA witnessed a decline in earnings by 55%YoY.” First Capital Research Review said.