Real sector firms register profit in Q3

KATHMANDU, MAY 16:

Real sector companies listed at the stock exchange have registered a substantial profit growth in the third quarter, signalling chances of them distributing attractive dividends to investors in the coming year.

The net profit of nine companies belonging to real sector that published their third quarter financials, show that their profit has gone up by 42.6 per cent by mid-April. Three hydropower companies, three hotels, one telecommunication company and two manufacturing companies that are traded actively at Nepal Stock Exchange have published their third quarter financials for the current fiscal year. Their net profit stands at Rs 10.98 billion, which stood at Rs 7.7 billion a year back.

Among real sector companies, Unilever has registered the highest growth in profit of 26.3 per cent by earning a profit of Rs 1.09 billion in the third quarter. The multinational FMCG producer in Nepal has the most expensive share among all the listed companies at Rs 9,865. Back in February, its share had reached Rs 10,400.

The shares of three hydropower companies also registered 8.4 per cent growth in profit last quarter. Their profit has grown to Rs 1.08 billion, which stood at Rs 995 million a year ago. This year, the three well-functioning listed hydropower firms — Chilime Hydropower, Arun Valley Hydropower and Butwal Power Company — have distributed 50 per cent, 15.75 per cent and 25 per cent dividend, respectively.

“The income of the hydropower companies are guaranteed so investors can expect a steady income, making stocks of hydropower companies attractive,” said president of Nepal Investors’ Forum Raj Kumar Timilsina.

However, the income of hydro companies remain stagnant after the power project hits full capacity unless the company readies another plant.

Hotels — Oriental Hotel, Soaltee Hotel and Taragaon Regency Hotel — also registered a growth of 24 per cent in profit. Likewise, profit of Nepal Telecom has also gone up by 52.9 per cent to Rs 8.4 billion. Its profit would have been more if it had not provisioned Rs 3.8 billion for licence renewal.

At the stock exchange, which is dominated by financial intermediaries, real sector stocks do not get to see much action, despite their relatively good performance and dividends. In the last month of third quarter, only 188,500 units of shares belonging to these firms were traded. In the same period more than 4.9 million unit shares of financial intermediaries —commercial banks, development banks, finance companies and insurance companies — were traded.

In last fiscal year, real sector companies such as Unilever, Nepal Telecom, Chilime Hydropower, Soaltee Hotel, Bottlers Nepal Balaju and Bottlers Nepal Terai had distributed handsome dividends exceeding 50 per cent. Unilever had provided Rs 680 per unit share. Among the 28 firms listed under manufacturing, trading, hydropower and others, shares of only these eight companies mentioned were traded in the last 90 days.

Source: THT