Colombo Stock Exchange listed company profits grew 20% in the two years ending in the December quarter of 2015, with banks and finance company profits increasing 58% and manufacturing stock profits up 31%, while listed energy, hotels and telecom firms saw their earnings share decline as they posted lower-than market earnings growth. Investment trusts and plantations made losses in the same period. The financial services sector, including banks, insurance and finance companies, share of the total Rs207 billion market-wide 2015 profit grew from 31% in 2013 to 41% in 2015. The manufacturing sector’s share of market earnings increased from 7% in 2013 to 10% in 2015, beefed up by Royal Ceramics, which saw earnings grow 228%.
Commercial Bank recorded 34% earnings growth, but its share of total market earnings was unchanged at 6%. Lanka Orix Leasing, a finance company that is also a diversified holding company, saw profits increase 241% over the two years. Its share to total market earnings was 2%.
Forty eight (48) smaller financial services firms saw their collective earnings grow 85% in terms of profits during the period, boosting their share from 11% to 17%. The food and motor trading sectors also had similarly robust growth.
For some sectors like construction, energy and investment trusts, a single company disproportionately affected sector performance.
The construction sector, which had a 2% share of market earnings, fell to 1% in 2015, with earnings falling 40% during this period. Access Engineering saw profits drop 2% during the period, but two other listed firms saw combined earnings decrease 540%. Energy firms saw earnings decline 65% and the contribution to total earnings fall from 5% in 2013 to 1% in 2015 on a loss reported by Lanka Indian Oil Company. Lanka Century Investments saw
a Rs34 million loss in 2013 deepen to Rs1.8 billion by 2015, offsetting combined earnings of eight other companies in the investment trusts sector.
Some sectors made impressive earnings growth, but profits were significantly small. The chemical and pharmaceuticals sector saw the highest earnings growth by a sector at 152%, but made up 1% of total market earnings.
A majority of companies in the hotels and plantations sectors made losses in 2015. The hotels sector earnings share fell from 5% in 2013 to 3% in 2015, and the plantation sector saw earnings drop from 2% to zero.