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June 30, 2011 (LBO) - Sri Lanka's motor sector companies' profitability has
fallen after the reversal of some import tax cuts that caused a profit
surge, although vehicle demand remains strong with rising incomes and
economic growth, a report said.
Motor sector companies reported the highest growth in net profit for the last couple
of quarters after the government slashed import duties last year, Lanka
Securities said in a report on corporate earnings for the January -
March 2011 quarter.
.
Net profit growth in the sector was 132.5 percent in the quarter from a
year ago owing to the tax cuts but profits were down compared with the
previous quarter.
.
"The sector demonstrated a monstrous growth in profitability - by 132.5
percent year-on-year to 1,119.8 million rupees - which can be
attributable to the overwhelming demand for vehicles hyped by the
reduction in vehicle imports duties," it said.
.
Nevertheless, the sector saw a 13.4 percent quarter-on-quarter drop in
earnings - a sign of the fading effects of the tax revision, the report
said, referring to the re-imposition of some import duties by the
government.
.
"Hence, we are not anticipating abnormal profit growth in the
forthcoming periods that was seen in the last quarter," Lanka Securities
said.
.
"But with the prevailing economic conditions in the country and growing
demand along with per capita income we anticipate sustainable growth in
the companies in the sector."
http://www.lbo.lk/fullstory.php?nid=739676602
fallen after the reversal of some import tax cuts that caused a profit
surge, although vehicle demand remains strong with rising incomes and
economic growth, a report said.
Motor sector companies reported the highest growth in net profit for the last couple
of quarters after the government slashed import duties last year, Lanka
Securities said in a report on corporate earnings for the January -
March 2011 quarter.
.
Net profit growth in the sector was 132.5 percent in the quarter from a
year ago owing to the tax cuts but profits were down compared with the
previous quarter.
.
"The sector demonstrated a monstrous growth in profitability - by 132.5
percent year-on-year to 1,119.8 million rupees - which can be
attributable to the overwhelming demand for vehicles hyped by the
reduction in vehicle imports duties," it said.
.
Nevertheless, the sector saw a 13.4 percent quarter-on-quarter drop in
earnings - a sign of the fading effects of the tax revision, the report
said, referring to the re-imposition of some import duties by the
government.
.
"Hence, we are not anticipating abnormal profit growth in the
forthcoming periods that was seen in the last quarter," Lanka Securities
said.
.
"But with the prevailing economic conditions in the country and growing
demand along with per capita income we anticipate sustainable growth in
the companies in the sector."
http://www.lbo.lk/fullstory.php?nid=739676602
