Sunday 18 October 2015

Lanka Ventures posts best performance in 23-year history

Venture capital investments in SL and Bangladesh paying off, weather favourable

Lanka Ventures PLC (LVP), a long established venture capital company controlled by the DFCC Bank and HNB, has posted its best ever result in its 23-year history in the period ended Mar. 31, 2015, achieving the highest income and profit since inception, the company’s chairman, Mr. Jonathan Alles, has said in its annual report.

The LVP portfolio is focused mainly on the power generation sector with ongoing projects both in Sri Lanka and Bangladesh with investments in hydro, thermal and wind power generation.

"This was the first time in its history that a group profit in excess of Rs. 300 million was achieved," Alles said. The group profit after tax was up to Rs. 335 million, more than double the previous year’s Rs. 150 million.

The numbers published for the year review were impressive – total income was up to Rs. 299 million from the previous year’s Rs. 123 million, power generation income was up to Rs. 239 million from Rs. 46 million and share of profits from associates up to Rs. 264 million from Rs. 222 million.

Interest income was down to Rs. 9 million from Rs. 30 million the previous year which Alles attributed to low interest rates and depleted idle funds invested in fixed income securities.

The main reason for the group’s superior performance was the contribution made by a hydro power plant owned by a subsidiary company which performed extremely well under favourable weather conditions, the chairman said.

LVP’s total investment in the energy sector topped two billion rupees as at Mar. 31, 2015. "Our energy sector investment portfolio is well diversified in terms of energy source and geographical location," Alles explained. "The four hydro power plants that are presently in operation recorded exceptional results during the financial year ended Mar. 31, 2015, aided by favourable weather conditions."

The company is also into healthcare with the chairman saying that this exposure, at Rs. 99 million as at balance sheet date, remained small.

"Our investment portfolio expanded by Rs. 208 million during the year with three new investments of which two were made in hydro power projects and one in a thermal power project in Bangladesh," Alles said.

As at Mar. 31, 2015, total investment in Bangladesh, done in partnership with Lakdhanavi, a Lankan company with extensive experience in setting up and operating thermal power plants both here and abroad, stood at over a billion rupees.

Lanka Ventures has a stated capital of Rs. 631.6 million and group retained earnings of Rs. 775.1 million in its books. The company’s retained earnings were Rs. 98.3 million. Total group assets ran at Rs. 3.58 billion and liabilities at Rs. 1.36 billion. At company level these were Rs. 895.6 million and Rs. 165 million.

The main shareholder of LVP is Acuity Partners (Private) Ltd., a joint venture between the DFCC and HNB, owning 79.58% of the company. The second biggest shareholder, Mr. A.M. Weerasinghe, owns 1.04%.

The LVP share traded at a high of Rs. 48.80 and a low of Rs.34 during the year under review against a trading range of Rs. 50 to Rs. 29.20 a year earlier.

The directors of the company are Messrs. Jonathan Alles, Chairman, Arjun Fernando, Sunil de Silva, Tyronne de Silva, Ananda Munasinghe, Ray Abeywardena and Ms. Ruvini Thenabadu, the majority being nominees of DFCC and HNB.
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