Listed companies combined March quarter earnings posted a whopping 135 percent increase year on year to Rs. 262 billion largely on account of substantial forex gains, First Capital Research revealed yesterday. Quarter on Quarter up 51% to Rs. 173.2 billion.
It said March earnings upsurge were influenced by the remarkable performance in Food, Beverage and Tobacco (303.3% YoY), Capital Goods (210.2% YoY), Diversified Financials (138.8% YoY), Transportation (682.1% YoY) and Consumer Services (173.6% YoY) sectors.
The Telecommunications (-386.6% YoY), Utilities (-111.4% YoY), Materials (-12.0% YoY) and Retailing (-46.0%YoY) sectors contributed negatively towards the earnings.
“However, the earnings boom is partially attributable to the massive devaluation in rupee against dollar which inflated the earnings of dollar earning counters.
Accordingly, identifiable net forex gains for such selective counters have accounted for approximately Rs. 82 billion of the total quarterly earnings,” First Capital said.
During the quarter of March, Food, Beverage and Tobacco, Capital Goods, Diversified Financials and Transportation sectors delivered extraordinary results while the Consumer Services sector exhibited a turnaround of performance.
Food, Beverage and Tobacco sector earnings displayed a tremendous growth of 303.3% YoY predominantly led by BIL which recorded a profit of Rs. 33.6 billion as against a loss of Rs. 0.7 billion in March 2021.
Improved performance is attributable to the gain on bargain purchase of Rs. 14 billion along with a substantial revaluation gain on its investment properties.
First Capital said MELS delivered the next best results within the sector with enhanced performance in the Diversified and Beverage sectors.
Diversified sector is mainly represented by tourism and has aided the earnings growth in the midst of noteworthy contribution from their overseas hotels prospered by the rebound in tourism in Maldives coupled with the rupee devaluation.
MELS’ Beverage sector, which is the largest contributor to both top line and bottom line of the group, produced strong performance owing to the upward price revisions across its entire alcoholic beverage product range, First Capital added.
Capital Goods sector earnings surged by 210.2% YoY with outstanding results in the counters of SPEN, JKH and HAYL whose operations are largely attached to dollar earning income streams as well as outpacing tourism and leisure operations overseas.
First Capital said the Diversified Financial sector delivered an immense earnings growth of 138.8%YoY solely led by the most diversified LOLC group. LOLC recorded a profit growth of 443.8% YoY to Rs. 39.3 billion against Rs. 7.2 billion in the comparative quarter. The historic profit growth of LOLC mainly originated as a result of the major portion of revenue flowing from its global operations.
Its financial arm represented by LOFC also produced impressive results sweetened by the forex gains and reduction in impairment charges.