Corporate earnings hit new recent high in 4Q23

By Nishel Fernando
The corporate earnings of Sri Lanka’s public quoted companies hit a new recent high of Rs.183.1 billion in 4Q23, nearly doubling from an year ago, according to Capital Alliance (CAL). 
In the March quarter, the corporate earnings of listed entities rose by 90 percent on a year-on-year (YoY) basis and from Rs.137.4 billion recorded in the previous quarter. 
“… a 41 percent YoY reduction in net finance costs, amidst declining interest rates, improved profitability,”  CAL noted. 
The net finance cost (excluding the banking, insurance and financial service sector companies) came down to Rs.47.1 billion in the March quarter, from Rs.91.4 billion in 1Q2023. 
However, revenue dropped by 2.8 percent YoY to Rs.1.5 trillion, amidst a 5.6 percent YoY decline in the industrial segments revenue. 

Meanwhile, CAL Research showed that the March quarter earnings have been mostly driven by higher profitability from financial services and food, beverage and tobacco.
The financial services sector accounted for 26.8 percent (including Rs.47 billion non-recurring income of LOLC and LOFC) of the quarterly earnings, followed by 26.7 percent by the food, beverage and tobacco sector, 16.6 percent by capital goods and 13 percent by the banking sector. 
In terms of top five gainers, LOLC Group and its units: LOLC, Browns Investment PLC, LOLC Finance PLC and Brown and Company PLC occupied the top four spots, followed by CTC. Meanwhile, Expolanka, Hela, Sri Lanka Telecom, Three Acre Farms and Odel were among the top five losers in the quarter.