Better results from listed firms in Q1
Colombo’s publicly listed companies are showing improved results in the latest end March 2018 quarter against the 2017 quarter as these firms weren’t affected by floods.
Last year’s consumption spending slowed owing to the floods and as a result the bottomlines were hit badly, analysts said quoting results that have come in. This year fortune has smiled on the listed companies and they’re posting much better results, they noted.
Earnings for the consumer goods companies should come in better this quarter, supported by low inflation that prevailed in 1Q, a stock market analyst said.
Overall, the banks and financial services reported solid numbers, with private banks reporting profits up approximately 20 per cent year-on-year. This was driven largely by loan growth, with Net Interest Margins staying relatively stable.
Increased retail prices by Ceylon Petroleum Corp last week will impact bottomlines of firms in Q2, analysts noted. LIOC also followed suit.
Consumer goods companies will largely have a short-term impact from rising prices of milk powder, gas and fuel, which will feed into higher cost of living, they added.
“However, with a recovery in the agricultural sector (employing nearly 25 per cent of the labour force) we believe the impact on buying power will not take a major hit.
Therefore, we are cautiously optimistic on the sector, but will continue to watch how the underlying consumer spending patterns evolve over the year which is a key driver of profitability for the consumer goods companies,” one analyst said.