APNGBC NEWS : 15th Mar 2016

2015 Results From Some of Papua New Guinea's Major Companies Indicates Significant Pressure on Earnings

Recently released results of some of Papua New Guinea’s major companies indicate that the economic downturn in 2015 put significant pressure on earnings

— By Business Advantage International

Business Advantage International: Recently released results of some of Papua New Guinea’s major companies indicate that the economic downturn in 2015 put significant pressure on earnings. However, while energy companies suffered most, PNG’s finance sector proved resilient.

  • ‘PNG companies by and large did not fare as well as prior years as a result of a multitude of factors,’ says Raicie Guillermo, Team Leader of Investment Analysis and Research for Kina Funds Management. ‘These included the decline in consumer activity post the LNG construction phase and macro-economic headwinds stemming from a downturn in global commodity prices.’
  • Financial: Profits in the financial sector, according to Guillermo, were affected by ‘foreign exchange pegging’ and ‘competitive pressures from within the market.’ Other head winds were ‘restrained market capacity and a tight interest rate environment (which) bridled loan book growth (restricted the increase in loans) and subsequent earnings.’
  • Resources: Earnings in the energy sector have been affected by the downturn in commodity prices. Oil Search recorded a net loss after tax of AUD$39.4M (K122M), Newcrest reported underlying profit of $63M(K193M), down 65 per cent on 2014. Steamships Trading Company announced a profit in 2015, after tax and minority interest, of K99M, up 11.6 per cent on 2014. However, the company’s pre-tax net income (profit attributable to shareholders) fell 25.9 percent to K80.7M. Revenue from continuing operations also fell by 12 per cent. 
  • Super Funds: PNG’s two biggest superannuation funds also had a mixed performance. Nambawan Super, reported an after-tax profit of K280M for 2015. This was down from K338M in 2014, a drop of 17 per cent. NASFUND reported its cash income in 2015 was K257M, a 24 per cent rise on its 2014 result. But it reported valuation losses of K18M in 2015, compared with valuation gains of K75M in 2014. 

Read the full report here.

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