First half profits reported by companies listed on the Cyprus Stock Exchange tumbled by 47% year-on-year to EUR 465.55 mln from EUR 879.38 mln in the same period a year ago in one of the worst ever performances in terms of profits on the local exchange.
While revenue growth in many sectors and for many companies was comparatively higher in the first half of 2008, higher costs associated with rising fuel costs and labour, coupled by massive losses from the sharp decline in value of investments led to the deterioration in profitability, according to a Financial Mirror survey.
Main Market stocks, which account for 78% of market capitalization, saw first half profits decline by 19% to EUR 560.24 mln as the sector was hurt by lower profits among the two banking stocks, but which was cushioned by the satisfactory performance of Bank of Cyprus.
The Parallel Market, accounting for 3.6% of total market cap, lifted profits by 4% to EUR 31.6 mln in the first half of 2008, mostly because of a stellar performance by Woolworth Properties (Cyprus) Ltd.
The Alternative Market stocks, accounting for 15% of total market cap, saw overall profitability decline by 36% to EUR 34 mln from EUR 53 mln a year ago, despite a good performance by KEO and CTC.
As was expected, the Investment Companies sector was awash with losses, hurt by a major swing from a first half 2007 profit of EUR 125 mln to a loss of EUR 157 mln because of the massive decline in equity prices. The largest investment company, Demetra, was hurt the most because of its large portfolio, reporting losses of EUR 45 mln, followed by Interfund with losses of EUR 34 mln.
The Shipping sector with only one stock, Ocean Tankers, saw profits rise to EUR 4.4 mln from EUR 843,000 a year ago, while the Special Category reported a 62% improvement in performance, slashing losses to EUR 7.6 mln compared to first half losses of EUR 20 mln a year ago.
Most profitable
Bank of Cyprus was the most profitable company in the first half as it reported a net profit of EUR 243.6 mln compared to EUR 229 mln a year ago and is on track to report EUR 540 mln in total profits for the whole year.
Marfin Popular Bank was the second most profitable on the CSE with EUR 220.4 mln in profits and analysts confident that the bank will meet its profit target of EUR 530 mln for the whole year.
Hellenic Bank reported EUR 50.8 mln in first half profits, but slashed its full year target to EUR 107 mln (adjusted for after tax). However, the bank reinstated its targets for 2009 and 2010.
A massive boost from the sale of land helped KEO report EUR 29.5 mln in net profits, but the company clarified that this was an exceptional performance, while Woolworth Properties (Cyprus) Ltd., a member of the Shacolas Group, became the first most profitable company on the CSE with net profit of EUR 28 mln, which in turn also helped the profits of its holding company, the Cyprus Trading Corporation.
