Ordinary shares of Metropolitan Resource Holdings to be delisted

By Hiran H.Senewirate

The ordinary shares of Metropolitan Resource Holdings Plc (MRH) would be delisted at the Colombo Stock Exchange (CSE), subject to Securities and Exchange Commission (SEC) approval, CSE source said.

In terms of Rule 5 of the SEC, under Section 53 of the Securities and Exchange Commission Act No 36 of 1987 (as amended) and published in Gazette Extraordinary No 1215/2of 18th December 2001, the directors make the necessary arrangements to purchase the shares of any shareholders who wish to sell their shares, at a price of Rs 28 per share, these sources said.

The company has already informed the CSE of their decision to delist from the CSE.

The company said a resolution to this effect was approved by the Board on 31 December 2015.It said the decision was made, as in the opinion of the management, there is no rationale for the company to continue to be listed on the CSE.
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Laugfs acquires mini hydropower operator for Rs 200mn

(LBO) – Sri Lanka’s Laugfs Power, a subsidiary of quoted Laugfs Gas has acquired the total issued shares of Pams Power private limited for 200 million rupees.

Laugfs Gas said in a stock exchange filing that Pams Power is holding all rights for the development and operation of a 2 MW capacity hydropower project located in Kalaweldeniya, Polpitiya.

Engaging in renewable energy solutions, LAUGFS power currently operates mini-hydro power development plants at Ranmudu Oya, Balangoda, supplying to the National Grid.

The largest Solar Power project in Sri Lanka will also be commissioned by LAUGFS Power in this year, with an estimated combined capacity of 20MW, adding 34GWh to the national grid every year.

Sri Lanka’s Central Bank to sell USD75mn worth development bonds

(LBO) – The Central Bank will issue 75 million US dollars of development bonds with a tenor of 1 Year 1 month, 2 Years 2 months and 4 Years 4 months to local and foreign investors.

The Debt Department said the subscription will be at a floating rate of 6 month LIBOR for USD plus a margin through competitive bidding or at a fixed rate to be determined through competitive bidding.

Minimum investment is 100,000 US dollars with additional investments in multiples of 10,000 US dollars.

The issue will be open for subscription from 15 to 19 February and has a date of settlement of 26 February 2016.

Development bonds are to be issued by the Public Debt Department of Central Bank and exempted from income tax paid in Sri Lanka.

SEC assigns Special Purpose Audit for Blue Diamonds

(LBO) – Sri Lanka’s securities regulator has assigned Ernst & Young to carry out a Special Purpose Audit to check several allegations made against Blue Diamonds Jewellery Worldwide.

Releasing a statement Securities and Exchange Commission said they received several complaints alleging that the Director Board has misled their shareholders and investors through its 2015 September quarter interim financial statements.

Complaints have also received saying the proceeds raised at a recently concluded Rights Issue has misused for the benefit of Related Parties, the statement further said.

The scope of the Special Purpose Audit:

• to verify utilization of proceeds collected from the Company’s Rights Issue;
• identification and quantification of Related Party Transactions; and
• the extent of compliance of interim financial statements with Sri Lanka Accounting Standards No. 34 — Interim Financial Reporting (LKAS 34).

Therefore Blue Diamonds Jewellery Worldwide has been directed as follows:

1. to engage Messrs. Ernst & Young, Chartered Accountants to carry out a Special Purpose Audit for the reasons stated herein in accordance with the scope mentioned above;

2. to submit to Messrs. Ernst & Young the Auditors all such information and access to such information stored inter alia in the books, documents, and electronic devices of the Company as the Auditor may require in respect of the discharge by the Auditor of all or any of the duties entrusted to it by the SEC in relation to the scope mentioned above;

3. to ensure that all Directors and Officers of Blue Diamonds Jewellery Worldwide PLC furnish to the Auditor all information within his knowledge or which he is capable of obtaining or any information which the Auditor requires to enable it to carry out its duties;

4. to ensure that the information which is furnished to the Auditor is not false or misleading in any material particular;

5. to ensure that no information pertaining to Blue Diamonds Jewellery Worldwide PLC stored in the books or documents or electronic devices of the Company are altered, destroyed or removed in any manner; and

6. to fully co-operate with the Auditor to carry out the Special Purpose Audit entrusted to the Auditor by the SEC.

Blue Diamonds will be required to pay for the audit and the date of the commencement of the audit is to be notified later.

Sri Lanka’s Carsons Cumberbatch December net up 66-pct

(LBO) – Sri Lanka’s Carsons Cumberbatch group profits rose 66 percent to 1.2 billion rupees in the December 2015 quarter from a year earlier, interim accounts showed.

Carsons revenues were fell 9 percent to 20.6 billion rupees, while sales costs also fell 3 percent to 15.3 billion rupees, resulting in a gross profit of 5.2 billion rupees, down 22 percent from a year ago.

Earnings were 6.39 rupees per share for the quarter compared to previous year’s 3.84 rupees per share.

At group level, Carson reported revenue of 65.3 billion rupees for the nine months, depicting a marginal improvement of 1 percent against the corresponding period.

It was led by growth in Beverage sector turnover, which in turn was fuelled by increased excise duty on the main, the company said.

“Contributions to Group Revenue by the Oil Palm Plantations and Portfolio & Asset Management businesses were relatively low this period on account of low average Crude Palm Oil prices and limited market opportunities respectively,”

Consolidated gross profit has been contracted by 11 percent over the two comparable periods, to stand at 17.4 billion rupees for the nine months.

“The decline in gross profit is attributable towards increased excise duty and low margins yielded by the Oil Palm Plantations segment.”

The group recorded 898.6 million rupees cumulative gain from change in fair value of biological assets for the ongoing financial year, marking an improvement of 274 percent against the corresponding nine months, the company said.

The group’s Oil Palm Plantations segment has reported revenue of 14.5 billion rupees during the nine months which is a drop of 21 percent Year-on-Year.

The group’s leisure business has posted overall net profit of 69.6 million rupees for the nine months which is a year-on-year decrease of 2.9 percent.

The Real Estate sector reported revenue of 159.8 million rupees, reflecting an increase of 12.1 percent against the corresponding nine months, driven by growth in rental income.

Aitken Spence records Rs. 1.1b as PBT in 3Q

Leading conglomerate Aitken Spence PLC posted its interim results to the Colombo Stock Exchange (CSE) released on Friday. The blue-chip’s financial results for the quarter that ended on 31 December 2015 saw profit-before-tax decrease by 25.3% to Rs. 1.1 b while profit attributable to equity holders decreased by 26.7% to Rs. 637 m. Revenue for the quarter fell by 14.6% to Rs. 6.7 b.

The diversified group’s nine-month results showed profit-before-tax decreasing by 28.3% to Rs. 2.6 b and profit attributable to shareholders falling by 35.4% to Rs. 1.4 b, while revenue dropped by 28.2% to Rs. 18.6 b.

The revenue loss from the cessation of the power purchase agreement of Ace Power Embilipitiya in April 2015 had a significant effect on the results. Other Operating Income for the 9 months to 31 December 2014 included insurance income of Rs 351m for the fire damage at a resort in Maldvies during 2013/14.

“Diminished returns from the Maldives due to external factors and consolidation of hotel investments in Sri Lanka, negatively affected the returns from the tourism sector,” Deputy Chairman and Managing Director of Aitken Spence PLC J M S Brito said.

The Group’s Hotels arm recently completed a 100-room extension to its beach property in Kalutara, which is now a 200-room upgraded resort. In addition, the company is currently overseeing two large hotel projects in Negombo and Ahungalla.

Aitken Spence operates a wide portfolio of hotels and resorts in Sri Lanka, Maldives, India and Oman. Its travel arm, the largest in Sri Lanka, is a joint venture with TUI Travel. It also acts as GSA for major airlines in Sri Lanka and the Maldives.

“We are pleased to report increase in profits from companies in the port management, ship agency and airline sub sectors contributed towards the profits of the Maritime & Logistics Sector,” added Brito.

Aitken Spence is Sri Lanka’s largest integrated logistics services provider and has port management services in Africa and the South Pacific.

Depreciation of the Rupee has adversely affected company due to foreign currency loans obtained for overseas investments.

The company was also significantly affected by the substantial Super Gain Tax paid during the quarter ended 31 December 2015, as per the provisions of part III of the Finance Act No. 10 of 2015.

Subsequent to the balance sheet date, Aitken Spence PLC after obtaining all relevant approvals purchased a 20% shareholding in Fiji Ports Corporation Limited. The company which was previously wholly owned by the Government of the Republic of Fiji owns and manages all ports in Fiji.

Aitken Spence Hotels International (Pvt) Ltd., a subsidiary company, entered into an agreement to acquire Al Falaj Hotel in Oman from Oman Hotel and Tourism Co., subject to obtaining all relevant approvals. Al Falaj Hotel has been under management of Aitken Spence since 2008.
www.ft.lk

Sri Lankan stocks end lower on global woes, rising rates

Reuters: Sri Lankan shares edged down for the fifth straight session on Friday to close at a more than three-week low, in line with weaker regional peers, as investors stayed off risky assets on concerns over rising domestic interest rates.

Asian shares fell for a sixth straight session on Friday as concerns about the health of European banks further threatened a global economy already under strain from falling oil prices and slowdown in China and other emerging markets.

Sri Lanka's main stock index ended 0.5 percent weaker, or down 31.82 points, at 6,283, its lowest close since Jan. 20. It has fallen 1.9 percent on the week.

Foreign investors net bought for the second straight session, purchasing 12.6 million rupees ($87,539) worth shares on Friday, but have net sold 176.1 million rupees worth of equities so far this year.

"Though there are net foreign inflows, blue chips saw net foreign selling and all the major stocks are down due to selling pressure," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

"Market and investor sentiment are negative at least until we see clear direction."

The key index has fallen 8.9 percent this year through Friday amid a rise in market interest rates.

Yields on t-bills rose between 8 and 17 basis points at a weekly auction on Wednesday, with the 182-day and the 364-day t-bill yields climbing to more than two-year highs, signalling a further rise in market interest rates.

Some investors are shifting to fixed interest rate-bearing assets due to a gradual rise in interest rates, analysts said.

Turnover was 530.9 million rupees, less than this year's daily average of 742.17 million rupees.

Shares of conglomerate John Keells Holdings Plc fell 2.51 percent, while the biggest listed lender Commercial Bank of Ceylon Plc dropped by 1.57 percent and Sri Lanka Telecom Plc fell 1.03 percent. 

($1 = 143.9500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)