Real sector companies, that have become quite popular among investors of late, registered a decline in profits in first quarter of current fiscal year.
Profit earned by real sector companies this first quarter has declined by 70 per cent, according to the recently published financials. Since the post-April 2012 rally of the stock index, shares of hydro companies, hotels and Nepal Telecom are in demand for their steady profit growth.
The net profit of seven companies belonging to the real sector that published their first quarter financials, show that their collective profit is down by Rs 8.9 billion. Three hydropower companies, two hotels, one telecommunication company and one manufacturing company that are traded actively at Nepal Stock Exchange have published their first quarter financials for the current fiscal year. Their net profit stands at Rs 3.6 billion, which stood at Rs 11.3 billion a year ago.
“We had expectations from real sector companies, but investors feel disappointed as we were not hoping such a decline in profits,” pointed out president of Nepal Investors’ Forum Raj Kumar Timilsina.
Among real sector companies, Nepal Telecom’s profit has slumped the most as it fell by 78 per cent. The profit of the only listed telecom company, which stood at Rs 11.3 billion a year back, has come down to Rs 2.5 billion. According to NT, the decrease in profit has been brought about by obligatory payments for licence fee and frequency charge. NT has paid Rs 1.2 billion for frequency and licence to the regulator.
Unilever’s profit also declined by 8.4 per cent in comparison to the corresponding period last fiscal. Its profit stands at Rs 627 million, which stood at Rs 723 million a year ago. Unilever — the multinational FMCG company that produces and markets Sunsilk and Fair&Lovely among other brands in Nepal — is the most expensive share at the stock exchange that is traded at around Rs 10,000 per unit and is also the highest dividend payer among listed companies.
This quarter, profits of the three well-functioning listed hydropower companies — Chilime Hydropower, Arun Valley Hydropower and Butwal Power Company — also declined by five per cent.
Butwal Power Company’s profits declined the most as it fell by 67 per cent. It had earned Rs 49.9 million a year ago but in first quarter it was able to register a gain of Rs 16 million only. However, Chilime and Arun Valley registered a profit growth of 22 per cent and two per cent, respectively.
Besides commercial banks and microfinance institutions, these companies are the highest dividend payers. “The contraction in profit in the beginning of the year, however, might not affect dividend payouts at the end of the year. We hope their performance will get better later,” said Timilsina.
Hotels — Oriental Hotel and Soaltee Hotel — also registered a growth of 27 per cent and 44 per cent, respectively, in profit.
Source: The HImalayan Times, 19 Nov 2013
Profit earned by real sector companies this first quarter has declined by 70 per cent, according to the recently published financials. Since the post-April 2012 rally of the stock index, shares of hydro companies, hotels and Nepal Telecom are in demand for their steady profit growth.
The net profit of seven companies belonging to the real sector that published their first quarter financials, show that their collective profit is down by Rs 8.9 billion. Three hydropower companies, two hotels, one telecommunication company and one manufacturing company that are traded actively at Nepal Stock Exchange have published their first quarter financials for the current fiscal year. Their net profit stands at Rs 3.6 billion, which stood at Rs 11.3 billion a year ago.
“We had expectations from real sector companies, but investors feel disappointed as we were not hoping such a decline in profits,” pointed out president of Nepal Investors’ Forum Raj Kumar Timilsina.
Among real sector companies, Nepal Telecom’s profit has slumped the most as it fell by 78 per cent. The profit of the only listed telecom company, which stood at Rs 11.3 billion a year back, has come down to Rs 2.5 billion. According to NT, the decrease in profit has been brought about by obligatory payments for licence fee and frequency charge. NT has paid Rs 1.2 billion for frequency and licence to the regulator.
Unilever’s profit also declined by 8.4 per cent in comparison to the corresponding period last fiscal. Its profit stands at Rs 627 million, which stood at Rs 723 million a year ago. Unilever — the multinational FMCG company that produces and markets Sunsilk and Fair&Lovely among other brands in Nepal — is the most expensive share at the stock exchange that is traded at around Rs 10,000 per unit and is also the highest dividend payer among listed companies.
This quarter, profits of the three well-functioning listed hydropower companies — Chilime Hydropower, Arun Valley Hydropower and Butwal Power Company — also declined by five per cent.
Butwal Power Company’s profits declined the most as it fell by 67 per cent. It had earned Rs 49.9 million a year ago but in first quarter it was able to register a gain of Rs 16 million only. However, Chilime and Arun Valley registered a profit growth of 22 per cent and two per cent, respectively.
Besides commercial banks and microfinance institutions, these companies are the highest dividend payers. “The contraction in profit in the beginning of the year, however, might not affect dividend payouts at the end of the year. We hope their performance will get better later,” said Timilsina.
Hotels — Oriental Hotel and Soaltee Hotel — also registered a growth of 27 per cent and 44 per cent, respectively, in profit.
Source: The HImalayan Times, 19 Nov 2013
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