Wednesday, August 24, 2011

Listed companies profits up 30% to Rs. 32.7bn

*Banks continue to shine, while hotels, motors show phenomenal profit growth rates

Corporate financial results for the quarter ended June 30, 2011 showed that total profits of 195 public quoted companies which had submitted interim financial results to the Colombo Stock Exchange topped Rs. 32.7 billion (about 0.5 percent of the estimated GDP for this year).

According to John Keells Stockbrokers, the 195 listed companies had posted a cumulative earnings of Rs. 32,707.96 million, up 30.62 percent from a year earlier.

This growth had been led by the Hotel and Travel sector followed by the Motors sector. The Bank, Insurance and Finance sector, Diversified and Telecommunication sectors had contributed the highest to total profits.

NDB Stockbrokers in research paper published recently (see page 4) of a survey of selected companies to represent the overall market had recorded cumulative profits amounting to Rs. 31,032 million for the June quarter, up 27 percent from a year ago.

The Bank, Insurance and Finance sector had contributed 43 percent to this total profit figure, growing at 58 percent from a year earlier. "We feel (this) sector is one of the most attractive sectors…the profit growth during 2011 is likely to be significantly higher compared to 2010, helped mainly by the tax reductions while the demand for loans and advances are expected to be high as a result of the prevailing low interest rates," NDB Stockbrokers said.

Cumulative profits of the Hotel and Travel sector grew a massive 464 percent while the Motors sector grew 394 percent.

"Growing number of tourists helped the hotels to record phenomenal growth rates while demand for vehicles aided by the tax cuts continued to benefit the motors sector," NDB Stockbrokers said.

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