The Colombo stock Exchange (CSE) listed entities saw their overall profits for the quarter ended December 31, 2014 (4Q14) slowing down to 9.3 percent year-on-year (yoy) to Rs.56 billion after growing 52.8 percent yoy in the third quarter, an independent research company said. 

According to the research arm of Capital Alliance Securities (Private) Limited, CAL Research, the largest contribution to this profits have come from the banks, finance and insurance sector with a 42 percent share. 

This is followed by diversified holdings with 16 percent contribution and beverage, food and tobacco with 12 percent contribution.  During the 4Q14, the largest individual contribution has come from the diversified conglomerate John Keells Holdings PLC with a profit share of 7.8 percent or Rs.4.3 billion. 

The second and the third largest individual contributors were Hatton National Bank PLC (6.6 percent) and Commercial Bank of Ceylon PLC (6.1 percent).  Meanwhile, the sectors which had the highest growth in earnings were footwear and textiles with 383 percent, information technology with 78 percent yoy and trading with 71 percent yoy. 

The services, plantation and power and energy saw their sector earnings declining by 50 percent, 44 percent and 30 percent yoy respectively. 

On the banks, finance and insurance sector CAL research said the earnings from the private sector commercial banks grew by 43 percent yoy in 4Q14 mainly due to the gains from their bond portfolios. 

“Net Interest Margin (NIM) of the banking sector remained flat at 5 percent. Financial companies and other financial institutions (NBFI) earnings grew 65 percent yoy amid NBFI sector NIM increasing 82bps to 10.6 percent,” CAL said.   Further, insurance sector earnings fell 9.9 percent yoy in 4Q14 despite the sector Gross Written Premiums increasing 11 percent yoy. 

Hotel and travel sector earnings declined 23 percent yoy to Rs.2 billion as the cost increases during the quarter saw the sector margins (earnings before interest and tax) contracting 170 basis points as most hotels were unable to pass on the increasing costs to customers. 

Healthcare sector earnings dipped 4 percent yoy Rs.683 million in the 4Q14 mainly due to the declines in earnings in Asiri Surgical, Nawaloka Hospitals and Lanka Hospitals Corporation, CAL said. 

Meanwhile, trailing 12-month market earnings grew 16.7 percent yoy to Rs.203 billion due to improved economic conditions in the latter part of the year. 
Earnings declined 13 percent yoy in 2013. 

The largest sector-wise contributions during 2014 came from banking, finance and insurance (35 percent), diversified holdings (17 percent) and beverage, food and tobacco (13 percent).