Friday, 15 February 2019

Sri Lanka rupee ends weaker on importer dollar demand; stocks at near 4-mth low

Reuters: ** Sri Lanka's rupee ended weaker on Friday, as dollar demand from importers weighed on the currency, market sources said. 

** The stock market also closed weaker at a near four-month low, as foreign investors sold the island nation's risky assets. 

** The rupee, ended at 178.65/85, compared with Thursday's close of 178.50/70, market sources said. 

** The local currency posted a weekly loss of 0.42 percent for the week due to high dollar demand from importers and outflows from the stock market. 

** It has risen 2.2 percent so far this year as exporters converted dollars and foreign investors purchased government securities amid stabilising investor confidence in Sri Lanka after the country repaid a $1 billion sovereign bond in mid-January. 

 ** The bond market saw inflows of 11.4 billion rupees ($63.87 million) in the week ended Feb. 6, recording its third straight weekly inflow, the latest central bank data showed. 

** Worries over heavy debt repayment after a 51-day political crisis that resulted in a series of credit rating downgrades dented investor sentiment as the country is struggling to repay its foreign loans. 

** The rupee dropped 16 percent in 2018, and was one of the worst-performing currencies in Asia due to heavy foreign outflows. 

** The Colombo Stock Exchange index ended 0.39 percent weaker at 5,909.30 on Friday, its lowest close since Oct. 26. 

** The benchmark index fell 0.92 percent for the week after it lost 0.3 last week, and declined about 1 percent in January. 

** The turnover was 965.6 million rupees ($5.41 million), more than last year's daily average of 834 million rupees. 

** Foreign investors were net sellers of 590 million rupees worth shares on Friday. They have been net sellers of 5.2 billion rupees worth of stocks so far this year, and 18.6 billion rupees since the political crisis began on Oct. 26, 2018. 

($1 = 178.5000 Sri Lankan rupees) 

 (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Rashmi Aich)

Thursday, 14 February 2019

Sri Lanka rupee ends lower on high dollar demand from importers; stocks steady

Reuters: ** Sri Lanka's rupee ended tad weaker on Thursday led by higher importer dollar demand, market sources said. 

** The stock market closed steady in dull trade, but foreign investors bought into the island nation's risky assets for the second straight session. 

** The rupee, ended at 178.50/70, compared with Wednesday's close of 178.45/55, market sources said. 

** The local currency posted a weekly loss of 0.7 percent last week due to importers' demand in the latter part of the week. 

** It has risen 2.3 percent so far this year as exporters converted dollars and foreign investors purchased government securities amid stabilising investor confidence in Sri Lanka after the country repaid a $1 billion sovereign bond in mid-January. 

 ** The bond market saw inflows of 11.4 billion rupees in the week ended Feb. 6, recording its third straight weekly inflow, the latest central bank data showed. 

** Worries over heavy debt repayment after a 51-day political crisis that resulted in a series of credit rating downgrades dented investor sentiment as the country is struggling to repay its foreign loans. 

** The rupee dropped 16 percent in 2018, and was one of the worst-performing currencies in Asia due to heavy foreign outflows. 

** The Colombo Stock Exchange index ended 0.03 percent firmer at 5,932.45 on Thursday, hovering near its lowest close since Nov. 23 hit in the previous session. 

** The benchmark index fell 0.3 percent last week, and declined about 1 percent in January. 

** The turnover was 160.3 million rupees ($898,542.60), its lowest since Jan. 4 and well below last year's daily average of 834 million rupees. 

** Foreign investors were net buyers of 94 million rupees worth shares on Thursday. But they have been net sellers of 4.6 billion rupees worth of stocks so far this year, and 18.1 billion rupees since the political crisis began on Oct. 26, 2018. 

($1 = 178.4000 Sri Lankan rupees) 

 (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Rashmi Aich)

Tuesday, 12 February 2019

Sri Lanka IOC unit hit by ad hoc price cuts; formula not cost reflective

ECONOMYNEXT - Lanka IOC, a publicly traded unit of Indian Oil Corporation, is expecting better results in the March 2019 quarter after being hit by multiple price cuts during a political crisis, but an existing pricing formula itself is not cost reflective, a top official said.

In the December quarter, Lanka IOC lost 986 million rupees, with gross profits falling to 67 million rupees from 277 million rupees a year earlier.

In addition to petrol and diesel, the firm also sells lubricants, which have positive margins and bunkers tare subject to competition.

Sri Lanka re-started a pricing formula in March 2018, under which the Finance Ministry announces a retail price for fuel every 10th of the month.

But the price formula itself is also not truly cost reflective, Lanka IOC Managing Director Shyam Bohra said.

"The components considered in the pricing formula are required to be suitably updated in line with actual cost," he said.

"The matter is being taken up by the company with the Government."

These include the cost of a terminal and dealer margins. The firm pays a 3 percent margin to dealers.

In addition to a common user terminal managed by Ceylon Petroleum Corporation used by both firms, Lanka IOC has a terminal in a tank farm in Trincomalee.

The government also changes taxes on fuel frequently, which makes it more difficult to manage costs.

During a so-called 'coup' on October 26 where ex-President Mahinda Rajapaksa was unexpectedly appointed Prime Minister, prices were cut several times outside the formula, re-politicising fuel prices.

A steep fall in the rupee against the US dollar also pushed up costs in the last quarter.

In the March quarter, the rupee has stabilised and there is no loss on inventory expected, which will help bring better results, Bohra said.

"We expect better performance in the March quarter," he said. "Positive margins from other product lines will contribute."

The firm now sells petrol at a higher price than state-run Ceylon Petroleum Corporation's 124 rupees under the formula.

Dealers have protested the loss of business, but Bohra says they have been compensated with an extra margin. The stock closed at 20.50 rupees Thursday.

Sri Lanka's Alumex makes Rs 63mn loss in December quarter

ECONOMYNEXT – Alumex, the aluminium extrusions subsidiary of Sri Lanka's Hayleys group, said it lost 63.4 million rupees in the December 2018 quarter compared with a net profit of 102 million rupees the year before.

Sales of the firm, which commissioned Sri Lanka's largest aluminium extrusion plant in 2018, rose 17 percent to 1.3 billion rupees in the period, according to interim accounts filed with the stock exchange.

Costs rose faster than net revenue during the period, the accounts showed, with net finance costs soaring to 147 million rupees from 29 million rupees the previous year.

December quarter’s loss per share was 21 cents. Alumex shares were trading at 13.10 rupees in early trade Tuesday, down 30 cents or two percent.

In the nine months to December 2018, the firm, which has a dominant market share, reported earnings per share of 10 cents with net profit down 87 percent to 29.3 million rupees.

Sri Lanka’s LVL Energy December quarter net profit down 40-pct

ECONOMYNEXT - Sri Lanka’s LVL Energy Fund, which operates hydro, wind, and thermal power plants, said net profit fell 40 percent to 48 million rupees in the December 2018 quarter from a year ago.

Sales of the group, which has diversified into solar power, fell 9.5 percent to 114 million rupees over the same period, according to interim accounts filed with the stock exchange.

Earnings per share for the quarter were eight cents. LVL Energy Fund’s share last traded unchanged Tuesday at 8.00 rupees.

EPS for the nine months to December 2018 was 83 cents with net profit up 21 percent to 483 million rupees from the previous year.

A note to the accounts said LVL Energy Fund, a subsidiary of Lanka Ventures, had invested 117 million rupees on 17 January 2019 in the Makari Gad Hydro Power project in Nepal.

Tax costs shot up to 85 million rupees in the nine-month period from 26 million rupees last year.

LVL Energy Fund has power plants in Sri Lanka, Bangladesh and Nepal.

Its hydro power plants performed the same as the previous year, while its thermal power plants in Bangladesh showed a stronger performance during the period compared to last year.

“The share of profit from the Bambabarapana hydro power plant that commenced commercial operation in the last quarter of the previous financial year also contributed towards a higher group profit for the period,” the statement said.

Power generation of wind power plants during the period was less than in the previous year, mainly due to less favourable weather conditions.

LVL Energy Fund operates seven hydro power projects in Sri Lanka with a total capacity of 19.4 MW and two wind power projects with an installed capacity of 15.3 MW in Kalpitiya.

Sri Lanka's United Motors December net profit down 44-pct

ECONOMYNEXT - Profits at United Motors Plc, agents for Mitsubishi automobiles in Sri Lanka, fell 44 percent to 60 million rupees in the December 2018 quarter as sales slowed after government import controls were implemented to defend the rupee.

Interim accounts filed with the stock exchange showed quarterly sales fell 7.2 percent to 3.2 billion rupees.

The firm reported earnings of 59 cents per share for the quarter.

In the nine months to December, United Motors reported earnings of 1.97 rupees per share on total profits of 198 million rupees, down 56 percent.

Nine month revenues fell 10.6 percent to 10 billion rupees.

The fall in sales and profits at United Motors came after credit restrictions and tax hikes that have slowed car imports.

Sri Lanka’s Haycarb December net profit up 30-pct

ECONOMYNEXT - Sri Lankan coconut shell-based, activated carbon-maker Haycarb said net profit rose 30 percent to 211 million rupees from a year ago.

Quarterly earnings per share were 7.12 rupees, according to interim accounts filed with the stock exchange.

The share was trading at 130 rupees Thursday morning, unchanged.

Quarterly sales rose 39 percent to 5.3 billion rupees.

EPS for the nine months to December 2018 were 17.36 rupees with net profit up 29 percent to 516 million rupees and sales up 31 percent to 14.3 billion rupees

Haycarb Managing Director Rajitha Kariyawasan said the growth in sales was owing to adjustment of activated carbon prices in the first half of the year to compensate for raw material price hikes and growth in sales of value-added products.

“With the availability of charcoal improving in Sri Lanka, Indonesia and India due to improved coconut crop, the company has gradually passed the benefit to its valued customers,” he said.

Haycarb continued to face stiff competition from India and Philippines, the largest coconut carbon-producing countries in the region.

“The company has made significant strides in acquiring and growing new strategic customer accounts and market segments, backed by robust product development initiatives, auguring well for the growth plans of the business,” Kariyawasan said.