Sri Lanka’s listed companies’ earnings rise 19% in 4Q24
The Morning: Sri Lanka’s listed companies’ corporate earnings grew by 19% year-on-year (y-o-y) in the fourth quarter of 2024, driven by reduced finance cost and improved economic activities.
According to Capital Alliance Limited (CAL), corporate earnings of listed companies grew by 19% y-o-y to Rs. 218 billion in the fourth quarter.
The earnings growth was primarily driven by benefits through reductions in net finance costs, increased economic activities and performance in the banking sector.
“Earnings were mostly driven by higher profitability from the banking sector, food, beverage and tobacco sector, financial services sector and capital goods sector,” CAL said.
However, corporate earnings reduced by 7% when compared to the third quarter, which recorded total earnings of Rs. 236 billion.
CAL said that the banking sector posted the highest earnings, with a 160% y-o-y increase in profitability primarily due to impairment reversals taken after the finalisation of the external debt restructure.
The banking sector recorded Rs. 61.9 billion of total earnings in the fourth quarter.
Moreover, CAL said that the total revenue of the listed companies jumped by 35% y-o-y in the fourth quarter to Rs. 2.08 trillion.
Top gainers for the quarter were Commercial Bank which gained a total of Rs. 24 billion and HNB with Rs. 20.5 billion in gains.
OSL take:
The increased corporate earnings recorded by listed companies in Sri Lanka are a clear indication of the steady growth being recorded by the country while the overall economy is on a growth path. The latest recordings also support Sri Lanka’s bid to become a hub in the South Asian region. The strength and growth of Sri Lanka’s listed companies sent out a clear message to foreign businesses/investors on the lookout for business/investment opportunities in the South Asian region that the country was ready for business. Sri Lanka’s geographical positioning in the Indian Ocean, the strong trade ties enjoyed with other countries and the target of becoming a regional hub have all added to the country’s attraction as an emerging business destination in the South Asian region for foreign businesses/investors. With Sri Lanka’s overall economy on an expansion path presenting many business/investment opportunities related to key economic sectors and an increasing business potential, foreign businesses/investors could confidently explore the growing opportunities in the island nation. Given the strong performance of local businesses, foreign businesses could also look at expanding operations through collaborations with local businesses while also looking at setting up bases in Sri Lanka to engage with other countries in the region.
| Article Code : | VBS/AT/20250312/Z_3 |