Sri Lankan shares slip from over 1-yr high on profit-taking

Reuters: Sri Lankan shares ended marginally down on Thursday, slipping from their highest level in more than a year hit in the previous session, as investors booked profits in blue chips including John Keells Holdings Plc and Dialog Axiata Plc.

The Colombo stock index ended 0.30 percent weaker at 6,697.90, slipping from its highest close since Jan. 8, 2016 hit on Wednesday. The benchmark index has risen nearly 11 percent through Wednesday since March 31.

Turnover stood at 629.2 million rupees ($4.13 million), less than this year's daily average of 896.5 million rupees.

"We have seen a sizable selling pressure on blue chips today after some time," said Dimantha Mathew, head of research, First Capital Holdings PLC.

"The market is taking a breather after the index passed 6,700 levels and we feel profit-taking will continue for couple of days."

Foreign investors net bought shares worth 28.9 million rupees, extending the year-to-date net foreign inflows to 18.02 billion rupees.

Shares in John Keells Holdings Plc fell 0.60 percent while Carson Cumberbatch Plc fell 4.23 percent and Dialog Axiata Plc ended 0.83 percent weaker. 

($1 = 152.5000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez)

AIA SL reports revenue growth in 1Q

AIA Insurance Lanka PLC consolidated revenue of the life insurance business increased 24% to Rs 3,968 million compared to the same period in the previous year, driven by the increase in conventional life business Gross Written Premium (GWP) as well as growth in investment and other income.

The GWP of its life insurance business grew by 11% to Rs 2,631 million. The growth was supported by a further improvement in premium persistency. Conventional Life Business GWP has shown a growth of 15% compared to the same period in the previous year, to reach Rs 2,426 million.

Investment income increased 15%to Rs 1,273 million due to an increase in interest rates and attractive yield lock-ins.

Pankaj Banerjee Chief Executive Officer of AIA Sri Lanka said, “AIA Sri Lanka had a good start in 2017 by achieving a solid growth in GWP in the first quarter. We continued to stay focused on meeting customer needs through improving our product propositions, as well as expanding distribution reach and productivity of both our Agency and Bancassurance channels, providing a strong platform for growth.”

William Lisle, Chairman of AIA Sri Lanka, said, “I am pleased with the Company’s progress in our journey towards becoming the pre-eminent life insurer in the country throughthe execution of our strategies in expanding and strengthening our distribution and bancassurance channels.”

www.dailynews.lk

Dipped Products posts Rs. 24 b turnover and Rs. 1 b pre-tax profit

The Dipped Products Group has posted Rs. 24 billion turnover during the financial 2016-17 year, an 11 % increase from a year ago.

Group Profit Before Tax (PBT) for the year was Rs. 1.06 billion, a 53 % increase from the Rs. 691 million recorded for the previous year.

The Hand Protection segment contributed Rs. 14 billion to revenue, 12 % higher than the previous year. Contribution to PBT from the segment was at Rs. 785 million, a 32 % increase from a year ago. The Hand Protection sector profit was impacted by the higher latex prices that prevailed in the fourth quarter.

The Plantation segment reported Rs. 10 billion in revenue, a 7 % increase from the previous year and a PBT of Rs. 272 million compared to Rs. 152 million posted for the previous year. Plantation segment performance was affected by lower crop, mainly arising from adverse weather conditions and restrictions on weedicides.

Established in 1976, Dipped Products is one of the leading non-medical rubber glove manufacturers in the world and accounts for a 5 % share of the global market. The company’s products now reach 68 countries.

The Board of Directors of Dipped Products Plc comprises Chairman Mohan Pandithage, Managing Director Dr. K. I. M. Ranasoma, F. Mohideen, S. C. Ganegoda, Dhammika Perera, M. Bottino, S. Rajapakse, N.A.R.R.S. Nanayakkara, S.P. Peiris, K.D.G. Gunaratne, H.S.R. Kariyawasan and S.M. Shaikh.

www.ft.lk

Haycarb records Rs. 13.5 b turnover; Rs. 1.19 b pre-tax profit in FY17

Sri Lankan multinational Haycarb Plc reported revenue of Rs. 13.5 billion, profit before tax of Rs. 1.19 billion and profit after tax of Rs. 939 million for the financial year 2016/17. The earnings per share of equity holders of the company increased to Rs. 27.07 for the year.

The Chairman of Haycarb Plc and its parent company Hayleys Plc Mohan Pandithage said that the company posted a profit before tax of over Rs. 1 billion for the fifth consecutive year, signalling the success of diversification and the resulting stability of the businesses driven by its long-term strategies.

Haycarb Plc Managing Director Rajitha Kariyawasan explained that the company was able to show both top and bottom line growth amidst key challenges in the supply chain for raw materials and volatility in some of its key global markets.

He added that successful development and commercialisation of a number of value-added high margin products, expansion of its strategic customer base and growth shown in key geographic markets, together with the significant growth shown in the environmental engineering segment of the business (Puritas), helped to retain the overall performance of the group. He also said that cross functional teams delivered significant improvements in efficiencies and cost savings that added to the bottom line through lean projects that increased yields of specific equipment and product lines and reduced re-work.

The biggest challenge faced by the group in the 2016/17 fiscal year was the significant shortages in charcoal supplies and resultant high prices in its Indonesian operations as a result of significant coconut crop reduction which impacted the results negatively. This was compounded by the oversupply of activated carbon from low-cost manufacturers from India and the Philippines resulting in the company not being able to pass on the cost increases to the end customer.

Kariyawasan noted that a significant portion of raw material sourced in Sri Lanka and Thailand was procured through environmentally friendly charcoaling initiatives that have been developed and promoted amongst suppliers by providing technology and financial assistance. The company continued to promote ‘Haritha Angara’, the environment friendly charcoaling pits in Sri Lanka, as a strategic initiative, while Carbokarn supported the operation of the vertical charcoaling kiln facility.

The performance of Sri Lankan entities significantly improved due to higher production throughput, increase in the value added portfolio and stability in raw material prices achieved through its ‘Haritha Angara’ program. He added that a notable performance was reported by the Thailand operations, which included satisfactory growth in the regeneration business.

Kariyawasan said the environmental engineering arm Puritas Ltd. has shown creditable growth in its performance by expanding its share in waste water and water purification solutions in Sri Lanka and in the region. The significant growth shown by this segment in the last couple of years and its potential to further diversify and grow will strengthen the overall group he added.

“Haycarb plays a leading role in the flagship CSR initiative of our parent company Hayleys Plc. ‘Puritas Sath Diyawara’ leverages on the technical knowhow of the environmental engineering business to provide purified drinking water to persons affected by the chronic kidney disease (CKD) in the Central and North Central provinces of Sri Lanka. We are pleased to note that four more projects were commissioned during the year. The initiative now provides 130,000 litres of purified drinking water per day to nearly 25,500 persons spread across 16 villages,” he said.

Kariyawasan stated that the company remained confident of its position of strength and stability in the activated carbon industry, regeneration services and the environmental engineering segment to continue the growth platform in the background of continued emphasis placed on environmental sustainability, standards and regulations globally.

Haycarb is the pioneer manufacturer of coconut shell activated carbon in any coconut producing country with manufacturing facilities in Sri Lanka, Thailand and Indonesia supported by marketing offices in the US, UK and Australia. The company contributes net foreign exchange revenues with its value adding processes and is a leading and technologically superior manufacturer in its chosen segment.

The Board of Directors of Haycarb Plc comprises Chairman Mohan Pandithage, Managing Director Rajitha Kariyawasan, Dhammika Perera, Arjun Senaratna, Sarath Ganegoda, Jeevani Abeyratne, Dr. Sarath Abayawardana, Sujeewa Rajapakse, M.S.P. Udaya Kumara, Brahman Balaratnarajah, Sharmila Ragunathan, Ali Caderbhoy, James Naylor and M.H. Jamaldeen.

www.ft.lk

Sri Lanka's Hemas expands Bangladesh presence

ECONOMYNEXT - Sri Lanka's Hemas Holdings says it is expanding its marketing activities in Bangladesh and has launched feminine hygiene products.

"Investments were made in increased marketing activities in Bangladesh in order to extend the reach attained through our own distribution channels and to counter competition," Chief Executive Steven Enderby told shareholders.

"Further, we entered the feminine hygiene category during January in Bangladesh."

Hemas said last year that over 12 percent of its consumer goods sales came from Bangladesh and it Kumarika brand had reached the number two slot in valued added hair oil segment in the country.

Hemas is one of the few Sri Lankan firms that has tapped markets in South Asia.

Sri Lanka's Teejay Lanka net down 40-pct on cotton spike; GSP+ to help growth

ECONOMYNEXT - Sri Lanka-based Teejay Lanka Plc, an export fabric maker reported profits of 493 million rupees for the March 2017 quarter, down 40 percent from a year earlier on spiking cotton prices, but said restored free trade access to Europe will help future growth.

The firm reported earnings of 71 cents per share. For the year to March, it reported earnings of 2.80 rupees on total profits of 1.95 billion rupees, which fell 10 percent.

Revenues grew 6 percent to 5.79 billion rupees in March quarter and cost of sales grew at a faster 17 percent to 5.1 billion rupees, shrinking gross profits 40 percent to 656 million rupees.

Cotton yarn prices soared 20 percent over the past 12 months the firm said, with margins squeezed 39 percent in the last quarter. The firm is expecting prices to stabilize in the short term.

Chief Executive Sriyan de Silva Wijeyeratne said the firm is investing 15 million dollars in capacity expansion in India which will come on stream during the second quarter.

Future growth was also expected from GSP+ free trade benefits to the EU.

"Cotton price volatility is expected to ease out by around the end of Q2, and at this point we welcome the latest news currently coming in on the GSP," de Silva Wijeyeratne

"The company is cautiously optimistic on its expansions in India and its new ventures into Synthetics, which has so far met with good customer response."

Sri Lanka's Hemas Holdings net up 54-pct in March

ECONOMYNEXT - Profits at Sri Lanka's Hemas Holdings Plc, which has interests in consumer goods, healthcare, logistics and leisure rose 45 percent in the March 2017 quarter from a year earlier, helped by gain in its unspecified 'other' sector.

The group reported earnings of 1.89 rupees per quarter. In the year to March it reported earnings of 6.19 rupees on total profits of 3.4 billion rupees which grew 31 percent.

Revenues grew 18.4 percent to 11.4 billion rupees and cost of sales grew 15.7 percent to 6.7 billion rupees, with gross profits up 22 percent to 4.6 billion rupees.

"Overall, the Group has grown strongly over last year; however, a multitude of factors such as increasing VAT rates, the introduction of VAT at hospitals, new pharmaceutical pricing regulation, and increasing inflation have impacted profitability during the second half of the year," Chief Executive Steven Enderby told shareholders.

"Despite this, we have seen limited signs of recovery during Q4."

After tax profits in the fast moving consumer goods segment fell to 301 million rupees from 385 million rupees a year earlier.

Healthcare profits rose to 437 million from 344 million. Enderby said pharma margins were down after price controls but volumes were up. Hospitals were also making 'standalone profits' by the fourth quarter.

Leisure fell to 157 million from 234 million amid the closure of airports and a loss at Anantara Peace Haven resorts in Tangalle in its first full year of operations.

Logistics doubled revenues after getting the agency for Evergreen.

"The acquisition of this agency gives us a stronger position in the logistics and maritime space," Enderby said.

"During the year, the logistics arm of Hemas showed improved results, mainly driven by the 3PL operations.

"Hemas is further strengthening its presence in the logistics space by constructing a new state-of-the-art Logistics Park to consolidate warehousing, improve capacity and provide a range of new services to clients."

The group will invest 5.2 million dollars through a joint venture with GAC.

Profits were boosted by a 196 million profit in the unspecified 'other' sector which showed a loss of 130 million rupees last year.

Sri Lanka Treasury Bill yields edge down

ECONOMYNEXT – Yields on Sri Lankan Treasury Bills edged down at Wednesday’s auction with the 03-month bill yield at 9.62 percent, compared with 9.73 percent when last sold in April, data from the Central Bank showed:

The yield on the 06-month bill edged down to 10.42 percent from 10.43 percent last week while that on the 01-year bill remained steady at 10.73 percent, the public debt department of the central bank said.

It said it got bids worth Rs80.9 billion and accepted bids worth Rs24.7 billion.

Sri Lanka's Colombo Dockyard returns to profit

ECONOMYNEXT – Sri Lanka’s Colombo Dockyard returned to profit in the March 2017 quarter, with earnings of 141 million rupees compared to a loss of 77 million rupees a year ago.

Sales of the firm, a unit of Japan’s Onomichi Dockyard, rose 51 percent to 3 billion rupees from a year ago, according to interim results filed with the stock exchange. Colombo Dockyard reported earnings per share of 1.97 rupees in the March quarter, compared with a loss of 1.07 rupees per share the year before. Net finance income rose 38 percent to 36 million rupees, while administrative and distribution expenses were maintained at previous levels, the accounts showed.

Profits came from ship repair as ship building earnings fell, as did profits from heavy engineering.

The yard had been hit hard by the prolonged slump in shipping, with clients cancelling new building orders or negotiating pries down.

It had managed to reduce loses to 432 million rupees in 2016 from 708 million rupees the year before.

Sri Lanka Kelani Valley Plantations March net doubles to Rs277mn

ECONOMYNEXT – Sri Lanka’s Kelani Valley Plantations said net profit for the March 2017 quarter more than doubled to 277 million rupees from a year ago as tea prices and production recovered.

Group sales of the firm, part of Hayleys conglomerate, rose 44 percent to 2.1 billion rupees from the year before, according to interim accounts filed with the stock exchange. Earnings per share for the quarter were 8.15 rupees.

But, the firm reported a loss per share of 55 cents for the financial year ending March 2017, down from a loss of 82 cents the previous year, with sales up 13 percent to 6.9 billion rupees.

The accounts showed higher sales and gross profits in tea and rubber at the firm from a prolonged drought and the commodities slump.

Sri Lanka's Ceylon Cold Stores net down 15-pct

ECONOMYNEXT - Sri Lanka's Ceylon Cold Stores Plc, a consumer goods and retail group, said profits fell 15 percent from a year earlier to 823 million rupees in the March 2017 quarter amid a value-added tax hike and higher inflation from currency depreciation.

The firm reported earnings of 8.67 rupees per share for the quarter in interim accounts filed with the Colombo Stock Exchange. In the year to March, Ceylon Cold Stores reported earnings of 37.38 rupees on total profits of 3.5 billion rupees, which grew 24 percent.

"This was achieved despite seeing a rise in input costs as a result of the depreciation of the Sri Lankan Rupee against the US Dollar and the VAT rate increase during the year," Chairman Susantha Ratnayake told shareholders in the annual report.

CCS produces Elephant House-branded soft drinks and ice cream, and operates the Keells supermarkets chain.

In the March quarter, revenues rose 15 percent to 11.0 billion rupees, but cost of sales rose at a faster 21 percent to 9.4 billion rupees, shrinking gross profits 10 percent to 1.6 billion rupees.

Part of the quarterly profit came from a 92 million rupee fair value gain, up from 16.9 million rupees a year earlier.