The combined first half profit of companies listed on the Cyprus Stock Exchange more than doubled to EUR 880.91 mln in January-June 2007 compared to EUR 420.76 mln reported in the same period a year ago. This is further confirmation that the corporate earnings growth is solid and the 27% increase in the CSE General Index since the beginning of the year is fully supported by fundamentals.
While the profitability outlook on the major stocks is considered as very good, the only issue of concern to investors should be that the 1H07 results include many exceptional events leading to massive profit increases, which will not be repeated in the second half or next year.
The CSE’s Main Market stocks delivered the best return, reporting combined profits of EUR 686.7 mln, up 109.5% from the EUR 327.84 mln profits reported in the first half of 2006 and representing 78% of total CSE profits.
The three largest CSE listed companies, Bank of Cyprus, Marfin Popular Bank and Hellenic Bank reported combined first half profits of EUR 643.4 mln, which represents 73% of the total profits reported and is in line with the 76% share of the Big 3 in the total market cap of the CSE.
The Parallel Market stocks reported EUR 22.04 mln in first half profit compared to EUR 37.7 mln losses reported in the first half of 2006. The results include the loss of Cyprus Airways amounting to EUR 11.7 mln.
The CSE’s Alternative Market stocks reported a combined first half profit of EUR 70.4 mln, up 143.7% from the EUR 28.88 mln profit reported in the first half of 2006. The Investment Companies sector reported EUR 130.33 mln in profit in the first half, up 28% compared to EUR 101.59 mln in the same period a year ago while the lone company in the Shipping sector reported EUR 919.000 in first half profit.
The Special Category, which houses problematic stocks, had the worst performance reporting combined losses of EUR 29.5 mln compared to negligible profits in 2006.
The combined market capitalization of the CSE amounted to EUR 21.2 bln by the end of August according to Financial Mirror calculations with a gross p/e ratio of 21 times 2006 earnings.
