Sri Lanka’s corporate earnings jump 56% in Q2
The Morning: Sri Lanka’s listed corporate earnings increased by 56% year-on-year (y-o-y) in Q2 to Rs. 152 billion, supported by a significant reduction in finance cost and impairments from the banks, Capital Alliance Limited (CAL) said.
A report by CAL said that the banking sector remained the largest contributor to earnings with Rs. 49.1 billion, and the food, beverages and tobacco sector took the second place with Rs. 35.1 billion.
Apart from the lower finance costs and reduced impairments by the banking sector, the growth in earnings before interest and taxes due to lower operational costs also contributed to the growth in corporate earnings in Q2.
In the second quarter ending in June, the banking sector had impairment reversals of about Rs. 14 billion, with HNB having reversals amounting to Rs. 4.6 billion, while Commercial Bank had reversals of about Rs. 4.1 billion.
The highest profitable companies were the Commercial Bank with Rs. 15.9 billion and HNB with Rs. 11.7 billion, and the highest losses were seen in Browns Investment with Rs. 6.4 billion loss and Brown and Company PLC recorded an Rs. 5.2 billion loss.
Moreover, CAL said that the total market revenue increased by 17% y-o-y to Rs. 1,627 billion in Q2, where revenue growth was primarily driven by the capital goods and food, beverages and tobacco sectors and consumer staples distribution.
OSL take:
The growth in Sri Lanka’s corporate earnings is a clear indication of the ongoing economic activities in the country as well as the overall economic expansion. Sri Lanka’s private sector has shown great resilience and growth even amidst external and internal economic challenges, which also serves to boost the confidence of foreign businesses/investors on the lookout for business/investment opportunities in Sri Lanka. The growth, profits and expansion of businesses in Sri Lanka’s private sector further indicate the increasing business potential in the country. Sri Lanka’s geographical positioning in the Indian Ocean, the many trade agreements as well as trade concessions enjoyed with many foreign countries, the many incentives on offer and the target of becoming a hub in the South Asian region have all helped boost Sri Lanka’s economic activities. In turn, there has been an expansion in business/investment opportunities in all key economic sectors in Sri Lanka. Given the positive developments, foreign businesses/investors could explore the expanding business/investment opportunities in Sri Lanka as well as look at expanding operations through partnerships or joint ventures with local businesses.
| Article Code : | VBS/AT/20250903/Z_5 |