Sri Lanka cigarette maker says sales up 11-pct in March quarter

ECONOMYNEXT - Sri Lanka's Ceylon Tobacco Company said cigarette sales have grown 11 percent in the March 2018 quarter from a year earlier, with net profits up 16.8 percent to 3.73 billion rupees.

The company reported earnings of 19.95 rupees per share for the quarter. The stock closed at 1,048 rupees.

Gross revenues with taxes grew 15.2 percent to 35.57 billion rupees and government turnover taxes rose 15.54 percent to 27.5 billion rupees.

Net revenue grew 16.8 percent to 3.73 billion rupees.

Raw material costs rose to 675 million rupees from 666 million rupees a year earlier.

The company said there was a spike in smuggling after taxes were raised, but authorities were combatting it.

Sri Lanka's Commercial Bank net up 13.64-pct in March 2018

ECONOMYNEXT - Profits at Sri Lanka's Commercial Bank of Ceylon Plc rose 13.6 percent to 4,340 million rupees, helped by an expanding loan book, despite a higher loan loss charges, interim accounts showed.

The group reported earnings of 4.32 rupees per share for the quarter. The stock closed at 133.50 rupees, up 40 cents, on Tuesday.

Group net interest income rose 33 percent to 11.72 billion rupees in the quarter, with interest income up 20.5 percent to 28.8 billion rupees and interest expense rising at a slower 12.9 percent to 17.1 billion rupees.

Loans grew 5.73 percent to 784 billion rupees from December to March and financial instruments available for fell 9 percent to 140 billion rupees.

Loan loss provisions rose to 1.62 billion rupees from 251 million rupees with general provisions rising to 1.19 billion rupees from 203 million rupees.

Group capital adequacy fell to 11.32 percent (bank 11.31 percent) from 12.12 percent (bank 11.1 percent).

Commercial Bank said it was following an option under Sri Lanka Financial Reporting Standard 39 to declare the effect of the new SLFRS 9 had it been followed would increase loan loss provisions by 25 to 35 percent.

The bank's net assets would be 4 to 5 percent lower and the total capital adequacy ratio would be down by 50 to 70 basis points.

The bank said it was "is in the process of validating the impact of migration to SLFRS 9 as at Mach 31, 2018."

Fee income grew 18.7 percent to 2.44 billion rupees.

Unspecified other income grew 440 percent to 459 million rupees from 84.5 million a year earlier.

Gross assets grew 6.4 percent to 1,230 million rupees and net assets grew 1.2 percent to 110.26 billion rupees.

Singer Sri Lanka net down 4-pct in March quarter, plans e-commerce foray

ECONOMYNEXT - Profits at Singer Sri Lanka Plc, a large consumer durables seller fell 4 percent to 153 million rupees, though turnover grew and the firm said it was expecting a pick-up with rains driving a revival in the agriculture sector.

The group reported earnings of 41 cents per share. In intra-day trading Wednesday the stock was quoted at 38 rupees, flat.

"The Consumer Durables industry, where Singer is present is more susceptible to market conditions than other industries," Group Chief Executive Officer Ashoka Pieris told shareholders.

"When customer income and sentiments decrease, the demand for consumer durables is well
below that of the general market.

"At the same time when customer income and sentiments increase, the demand for consumer durables is above that of general market demand. We have seen this oscillation over many years."

Sri Lanka hit a balance of payments crisis in 2015/2016, barely after the 2011/2012. Though the BOP crisis ended the rupee continued to fall in 2017, under the inflationist-devaluationism followed by the current administration, killing purchasing power of the people, on top of a drought.

Singer has changed its financial year to March from December a take-over by publicly traded Hayleys group. Singer reported earnings of 2.62 rupees per share in the 15 months to December on total profits of 982 rupees down from 2.1 billion a year earlier.

"During this period the continuous drought resulted in a sharp drop in harvest," Pieris said.

"Since almost 30 percent of households are dependent on Agriculture, the drop in harvest eroded the purchasing power of a large market segment.

"This is in addition to customer purchasing power been affected by increased value added tax (VAT), higher interest rates and floods in wet zone. Consumer sentiments were affected by factors mentioned under quarter results."

Singer said it was looking to boost e-commerce operations and expand sales of its furniture business.

Sri Lanka shorter tenor Treasuries yields spike

ECONOMYNEXT - Sri Lanka's Treasuries yield rose sharply at Wednesday' auction with the 3-month yield up 23 basis points to 8.33 percent, data from the state debt office showed.

The six month yield rose to 8.90 percent from 8.52 percent on February 21, when the last auction was held.

The 12-month yield edged up 05 basis points to 9.70 percent.

The debt office offered 7.0 billion rupees of 3-month bills and accepted only 4.89 billion rupees of bids, and 1.8 billion in six month bills were accepted after offering 7.0 billion rupees of paper.

The debt office however offered 14 billion rupees of 12-month bills and accepted 21.2 billion rupees of bids.

Sri Lankan shares extend gain to 1-week closing high

Reuters: Sri Lankan shares rose for a second straight session on Wednesday and closed at a one-week high, with Ceylon Tobacco Co Plc leading the gains.

The Colombo stock index ended 0.42 percent firmer at 6,483.47, its highest close since May 9. It hit a five-week low on Monday.

“There was slow local buying on select shares. Still we do not see a bounce-back,” said Jaliya Wijeratne, CEO, First Capital Equities.

Turnover stood at 455.2 million rupees ($2.88 million), less than half of this year’s daily average of 1.01 billion rupees.

Foreign investors net sold equities worth 7.3 million rupees, extending the year-to-date net foreign outflow to 669.6 million rupees worth of shares.

Meanwhile, recent fuel price hikes weighed on investor sentiment, stockbrokers said.

State-run Ceylon Petroleum Corp (CPC) raised retail prices for gasoline and diesel on Thursday midnight in response to rises in global oil prices. Lanka IOC, a subsidiary of Indian Oil Corp, also increased fuel prices the same day.

Shares of Ceylon Tobacco rose 3.3 percent, Softlogic Holdings Plc closed 4.4 percent firmer and Lanka ORIX Leasing Co Plc climbed 1.8 percent.

The depreciation in rupee also weighed on the market, analysts said, as it is likely to hit profits of some listed firms that rely heavily on imports.

The rupee hit a fresh low of 158.50 per dollar on Wednesday on importer demand for the U.S. currency.

Analysts said concerns over political instability following President Maithripala Sirisena’s decision to suspend the parliament last month after 16 legislators from his ruling coalition defected, also hurt sentiment.

Last week, Sirisena urged his own coalition government and the opposition to end a power struggle in order to achieve ambitious goals including anti-corruption measures. 

($1 = 158.0000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)