Sri Lanka cigarette sales up 10-pct amid consumption boom

ECONOMYNEXT - Sales in Sri Lanka have picked up 10 percent in the June 2015 quarter from a year earlier amid higher consumption, the island's cigarette monopoly Ceylon Tobacco Company said as profits rose 20 percent.

Net profits rose 20 percent to 3.0 billion rupees in the quarter, giving earnings of 15.63 rupees per share. In the 6-months to June CTC reported earnings of 29.41 rupees per share on total profits of 5.5 billion rupees, up 21.4 percent from a year earlier.

The stock closed at 915.50 up 15.50 rupees on Tuesday.

CTC, a unit of British American Tobacco, said gross revenues rose 19.8 percent in the June 2014 quarter from a year earlier to 26.952 billion rupees due to a combined 10 percent rise in volumes and a price increase coming with a tax hike in October 2014.

CTC told shareholders than volume increase came from "a higher level of consumer confidence and an increase in disposable income."

In the March 2015 quarter also CTC reported an 11 percent volume gain.

Sri Lanka's credit growth picked up in the last quarter of 2014 and in January the state gave a steep credit funded salary increase to state workers and other subsidies, driving the recurrent expenditure and the budget deficit up.

Excise taxes rose 21 percent to 20.4 billion rupees in the quarter, with value added tax consolidated into excise this year, under the steady destruction of the value added tax system seen in the country over several years.

CTC said it is now carrying 80 percent pictorial warnings on their packs after a new law was passed by the new administration.

CTC went to court against the then health minister Maithripala Sirisena repeating tactics deployed BAT and other tobacco giants in other countries to prevent greater awareness that smoking causes cancer, erectile dysfunction and heart attacks.

However the former health minister made it part of his campaign for election as President and promptly requested parliament to pass a law to impose 80 percent pictorial health warnings on pack.

Cigarette and military hardware have the rare distinction of being two products that kill when used as directed by the manufacturer. Most other consumer goods cause death when mis-used, over-used.

Sri Lanka’s Asian Hotels & Properties June quarter profit down 10-pct

ECONOMYNEXT – Sri Lanka’s Asian Hotels & Properties said group net profit fell 10 percent to 302 million rupees in the June 2015 quarter from a year ago as competition from new hotels hit business at its city hotels.

The firm, part of John Keells Holdings, said in a stock exchange filing that sales in the June quarter fell six percent to 1.67 billion rupees.

Earnings per share for the quarter were 68 cents compared with 76 cents the year before.

The company operates two five star city hotels - Cinnamon Lakeside Colombo and Cinnamon Grand Colombo - under the brand ‘Cinnamon Hotels and Resorts’ while its property development division runs the Crescat Boulevard shipping mall.

The June 2015 quarter downturn came from its hotels business where sales and profits fell.

Asian Hotels & Properties has said it had a 46 percent market share among Colombo’s five-star city hotels in 2014 although business fell owing to intensifying competition that restricted growth in average room rates.

Google to cover Lanka with 3G floating balloons

Hiran H.Senewiratne (hsenewiratne@gmail.com)

The Information and Communication Technology Agency of Sri Lanka (ICTA) has partnered with Google to cover the entire country with 3G internet under the 'Google Loon project'.

The agreement was signed with Google and ICTA at the Prime Minister's official residence yesterday.

"The next government's five year economic development plan will enable Sri Lanka to become a knowledge based, highly competitive market in the region, which will be able to compete with Singapore and Malaysia, Deputy Policy Planning and Economic Affairs Minister Dr Harsha de Silva said.

"To achieve economic target, the government intends to make new technology more affordable and accessible to the people and iron out the gap between rural and urban and have and have-nots in the country," Dr de Silva said at the signing ceremony at Temple Trees yesterday.

He said that when they come to power after the election they will canvass a lot of investments for established colleges of technology improve the knowledge of youth to be more knowledgeable to face the future competitive world.

Dr de Silva also said setting up colleges of technology will help the younger generation to become future innovators, business leaders' and entrepreneurs Sri Lanka is the first country in the world to have Internet access covering the whole country with the government support, Google Vice President and Project Leader on GoogleX Project Loon Mike Cassidy said.

"Project Loon is the latest moonshot from Google[x]: balloon-powered Internet access," which is an important day for Sri Lanka to become the first country to launch covering the whole country, "he said

It is a network of balloons travelling on the edge of space, designed to connect people in rural and remote areas, help fill in coverage gaps and bring people back online after disasters, Cassidy said.

He said it is expected to place 13 balloons above Sri Lanka over the next few months and internet service providers will have to connect this network through these 'floating towers' which will ultimately reduce their transmission costs.

ICTA Managing Director and CEO Muhunthan Canagey said that with this new project the whole country will become universally connected through the Wi-Fi system. Under this system they will be linking to 3500 government buildings to enhance relationship with the government and people, he said.

"Matara covered or Jaffna covered is now history. In a few months we will be able to say Sri Lanka covered," addressing the signing ceremony Foreign Minister Mangala Samaraweera said.

The project is handled by ICTA with the collaboration of former Facebook executive Chamath Palihapitiya who represents Lotus Flare.
www.dailynews.lk

JKL profit falls 20 pct in three months to June

Author CHAMATH ARIYADASA

(LBO) – Sri Lanka’s John Keells PLC (JKL.N), the tea and rubber broking unit of John Keells Holdings, announced a 20 percent drop in net profits in the first quarter, in provisional results released to the Colombo Stock Exchange.

The company said profit after tax fell to 54.2 million rupees from 67.7 million rupees in three months to June, on revenue which fell 18 percent to 188 million rupees.

The company noted that weak global tea and rubber prices could affect performance in the short term, in its annual report.

“The demand for tea could remain depressed in the short term due to issues across some of the key export destinations for Sri Lankan tea,” Chairman Susantha Ratnayake said.

The rubber industry too would be called upon “to demonstrate greater resilience in the near term,” he said.

The company earnings per share fell to 0.87 rupees in the quarter from 1.10 rupees in the same period last year. The share price closed at 93.50 rupees, up 0.54 percent, on Tuesday.

Sri Lanka’s tea exports, for the first five months from January to May 2015, declined 13 percent to 561 million US dollars compared with 644.4 million US dollars in the same period in 2014.

John Keells Stockbrokers also comes under the John Keells PLC wing.

Sri Lanka’s Cargills brands bolster June quarter profits

ECONOMYNEXT - Sri Lanka's Cargills (Ceylon) reported a net profit of 390.6 million rupees in the June 2015 quarter compared with a loss of 145 million rupees a year earlier with fast growth in branded products.

Earnings per share for the quarter were 1.74 rupees against a loss per share of 65 cents the previous year, a stock exchange filing said.

Group sales rose 9.0 percent to 17.1 billion rupees in the three months ended 30 June 2015 from a year ago.

Cargills Ceylon, part of the CT Holdings group, attributed revenue growth to the strong performance of its retail and Fast Moving Consumer Goods businesses.

“Improved consumer sentiment was evident from the beginning of the year,” the statement said.

“The FMCG sector has returned a stable performance with a 24.6 percent growth in turnover ending at 3.0 billion rupees.

“The double-digit growth reported by our agriculture and livestock processing businesses indicates category growth driven by our strong portfolio of national brands; ‘Kist’, ‘Goldi,’ ‘Sams’, ‘Magic’ and ‘Kotmale’.”

The group’s retail sector sales grew 5.7 percent to 13.4 billion rupees in the quarter.

But Cargills said the business “continued to be challenged by the ‘deemed’ Value-Added-Tax (VAT) imposed on VAT exempted products that are essential for daily nutrition and are sourced locally.

”Continuation of this arbitrary fiscal policy is contradictory to national efforts of encouraging local agriculture and production and has far reaching implications on smallholder farmers who have been empowered by the steady markets and guaranteed minimum prices benchmarked by the private supermarket industry.”

The statement said the group restructuring process with efforts to optimize resources and expertise while strengthening the balance sheet has “yielded the expected results leading to enhanced efficiency.”

Sri Lankan shares rise, hover near 2-month closing high

Sri Lankan shares rose on Tuesday, hovering near their two-month closing high hit on Friday, as expectations of strong corporate earnings and political stability after the parliamentary polls next month lifted investor sentiment.

The main stock index ended firmer 0.19 percent, or 13.84 points, at 7,261.07. On Friday, it had closed at its highest since May 25.

Gains were led by large caps such as John Keells Holdings Plc amid block deals. John Keells rose 0.67 percent, Ceylon Tobacco Company Plc 1.72 percent and Distilleries Company of Sri Lanka Plc gained 0.35 percent.

Turnover was 1.1 billion rupees ($8.23 million), just above this year's daily average of 1.07 billion rupees.

Foreign investors were net sellers of 212.8 million rupees worth of shares, extending the net foreign outflow so far this year to 549.3 million rupees.

Analysts expect local companies to post strong results for the April-June quarter. 

($1 = 133.6000 Sri Lankan rupees) 

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

Sri Lanka Treasuries yields up across maturities

ECONOMYNEXT - Sri Lanka's Treasuries yields rose across maturities Wednesday with the 3-month yield up 03 basis points to 6.28 percent from a week earlier, data from the state debt office showed.

The 6-month yield rose 05 basis points to 6.43 percent and the 12-month yield rose 09 basis points to 6.48 percent.

The debt office sold 12.8 billion rupees of 03-month bills, 9.6 billion rupees of 6-month bills and 04 billion rupees of 12 month bills totalling 26.5 billion rupees.