Results IPSA companies: electric utility in the first quarter disappoints
By contrast, companies from the financial sector highlighted through increased 42.6% in earnings.
Of the 40 companies that make up the IPSA, they are already 18 who have given their results for the first quarter of this year and thereby balances begin to appear. From Octogone asset manager, said the sales of the companies that have reported have risen 8.51%, in line with expectations, while earnings have not met market expectations, advancing 7.9% so far. According to Octogone Research Manager, Milenko Mitrovic, the negative surprise came from the electricity sector companies, whose profits fall 19.9%, “mainly due to higher operating costs”.
Companies that showed the largest decreases were AES Gener, down 62.5% in earnings; followed by CGE (-49.02%), Endesa (-43.32%) and behind Enersis (-8.48%).
Conversely, Mitrovic highlights the financial sector as the only one that has exhibited in profit-driven by banks Santander and Chile, with an average of 42.6% increase in earnings, “largely due to the higher level inflation that occurred in the first half.
Under this scenario, what effect can we expect in the shares of the companies? Apparently the impact would be greater, because as the Octogone Research manager says currently the market focus is on other elements that go beyond corporate results.
“I think today the market is more focused on both the Chilean slowdown and the impact that the tax reform will have on corporate profits. So we believe that the emphasis should be in companies ‘value’ (relatively immune to economic growth and good dividend cycle) and out of shares ‘growth’ (linked to the business cycle)”, he said.
For the 22 companies that have not yet delivered their first year results, Mitrovic projections are not entirely positive. This, he explains that while missing more than half of IPSA companies for reporting, including several corporations are affected by the current economic scenario, as belonging to the commodities and retail sector.
“Among the companies are missing several producers of commodities to be affected adversely by a slowdown of the Chinese economy, we should also expect moderate growth in the retail sector due to the deceleration experienced by the Chilean economy”, he said.
Source: Diario Financiero
