Singer records excellent growth in Revenue and Net Income in Q1

The Singer Sri Lanka Group generated Group Revenue of Rs. 10.6 billion in the first quarter of 2016 representing a dynamic growth of 23%.This is in addition to strong growth achieved last year capping a record 57% increase over two years.

Group Net Profit for the 1st Quarter was a high of Rs. 809 million, an increase of 191% when compared with the previous year.

The company only Net Profit generated for the 1st Quarter was Rs. 215 million, an increase of 74%.

Successful initiatives undertaken by the Group and the stable business environment have contributed to the growth in both revenues and net income.

Pursuing new-growth initiatives including opening additional shops, adding new dealers and channels of distribution, improving and renovating shops, securing new brands and distributorships, introducing new products and improving processes have immensely contributed to the Group’s strong results.

Other significant initiatives comprise the launch of the new Singer Smart TV range under sub-brand Singer Vista, the opening of Digital Media Corners in retail shops, expansion of capacity at the refrigerator factory, introduction of new furniture brand for Dealers and the thrust into dealer markets for computers and furniture. Additionally, the Group continued its successful campaigns for refrigerators and air-conditioners.

Product lines in most sectors recorded noteworthy growth; refrigerators grew by 22%, sewing machines by 11%, smart mobile phones grew by 65%, deep freezers by 33%, computers by 18%, washing machines by 14%, air conditioners by 114%, air coolers by 108% and fans by 58%.

Noteworthy were contribution to revenue by the new Distributorships/Brands of DELL, SONY, SHARP and MITSUBISHI, obtained in 2014 and 2015. These recorded sales of Rs. 1.0 billion during the quarter, an increase of 52% in comparison to the previous year.

Singer Sri Lanka’s acquisition of majority stakes in Singer Industries (Ceylon) PLC and Regnis (Lanka) PLC from its parent company Singer (Sri Lanka) B.V. followed a one-time gain amounting to Rs. 443 million.

Q1 revenue at Singer Finance (Lanka) PLC, the company’s other public listed subsidiary, increased 8%, however, net profit decreased by 20%.

This is mainly due to average borrowing rates increasing faster than average lending rates immediately after a sharp increase in interest rates and also due to the initial operating costs of its credit card operations. It is expected to stabilize in the coming months.

The Company’s subsidiary Singer Digital Media Limited, which undertakes the sale of mobile phones to the trade channel posted Rs. 1.5 billion revenue to external parties.

Singer Group’s Q1 2016 marked by a strong performance in revenues and net income heralds an excellent start to the year. 

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Sri Lanka shares edge up amid foreign inflows

Reuters: Sri Lankan shares rose slightly on Thursday, hovering near their highest level in about four months hit in the previous session, as foreign investors turned net buyers.

However, the gains were capped as investors were worried that the island government's move to increase the value added tax (VAT) and impose new taxes effective from Monday would hit the bottom lines of companies.

Sri Lanka is seeking to raise 100 billion rupees ($687.8 million) in revenue in 2016 by increasing the VAT and new taxes, Finance Minister Ravi Karunanayake said on Sunday.

The move is part of the government's plan to meet a repeated request to raise revenue from the International Monetary Fund, which on Friday reached an agreement with Sri Lanka for a $1.5 billion bailout to help the island nation avert a balance of payments crisis.

The benchmark stock index rose 0.14 percent to 6,578.34, its sixth session of gains in seven, on Thursday, after hitting its highest level since Jan. 12 in the previous session.

"There was not much activities as investors are awaiting some strong direction on the macro economy," a stockbroker said.

Foreign investors, who have sold equities worth 2.95 billion rupees so far this year, were net buyers of 116 million rupees worth of shares.

Turnover stood at 708 million rupees, less than this year's daily average of around 779 million rupees.

Top mobile phone operator Dialog Axiata gained 1.9 percent, while top conglomerate John Keells Holdings fell 0.8 percent.

($1 = 145.4000 Sri Lankan rupees) 

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

Sri Lanka Chevron unit expects margin gains, slow volume growth

ECONOMYNEXT - Sri Lanka's Chevron Lubricants unit, the country's largest player with 50 percent market share, is expected to remain flat for the second year running, but margins would grow with longer-lasting products, an official said.

Chief Executive Kishu Gomes said Sri Lanka's 55 million litre lubricant market was estimated to have grown marginally in 2015 and slow growth was expected in 2016 as well.

Chevron was offering higher technology premium products that lasted longer.

Gomes said basic automobile lubricants lasted about 3,500 kilometres, but new offerings allowed vehicles to be driven 5,000 to 8,000 kilometres before an oil change.

With tens of thousands of new vehicles being put on the roads over 2016, volume growth was arrested because of longer-lasting oil becoming more popular, he said.

Thermal power generation, a large consumer of lube, is also being phased out. Coal plants did not use as much lubricants as other thermal plants, he added.

Once a state monopoly that robbed the free choice of the man on the street like some colonial Mercantilist firm, Chevron now competes with 12 other players after people's freedom was given back with market liberalization.

It market share has dropped to 50 percent, but it is no longer maintained with a coercive state backing unlike before privatization.

Gomes said the firm had deliberately moved out of some segments like two-stroke oil, which was mixed with kerosene and not considered an environmentally friendly product by the major shareholder.

Lanka IOC, a unit of the Indian company, has become a key player in the lube market after a state monopoly in petroleum distribution held by Ceylon Petroleum Corporation was also broken, giving more freedom of choice to car owners.

CPC also moved back to lubricant sales.

Gomes said falling base oil prices were helping the firm, and it also discounted some of the products.

A hike in value-added tax from 11 to 14 percent would, however, be invoiced to customers, he said.

In the three months to December 2016, Chevron Lubricants' profits rose 28 percent to Rs713 million, while revenues grew 8 percent to Rs2.95 billion. March 2016 quarter results are due.

The firm also announced a share split. In the year to December 2016, the firm reported earnings of Rs25.73 per share. The stock closed at Rs338.

Sri Lanka to float $500 million syndicated loan

ECONOMYNEXT - Sri Lanka is planning to float a $500 million syndicated loan shortly, which will be arranged by at least four banks, a media report said.

Bloomberg Newswires said Citi, Emirates NBD, HSBC and Mashreq Bank are expected to be mandated shortly to arrange a three-year term loan that will be repaid in instalments, citing sources close to the deal.

Sri Lanka has struck a preliminary deal with the International Monetary Fund, which is expected to come into effect in June after some essential prior actions that are needed to make sure that the program is not derailed at the start.

Central Bank Governor Arjuna Mahendran had also said that Sri Lanka wanted to go the market with a $1.5 billion sovereign bond armed with an IMF deal when yields of existing bonds fall below 7.0 percent.

Sri Lanka's 2022 bond with a coupon of 5.585 percent was quoted around 6.6/6.7 percent, and its 2025 bond with a coupon of 6.6859 was quoted around 7.20/30 percent this week.

Sri Lanka Treasuries yields rise across the board

ECONOMYNEXT – Sri Lankan Treasury Bill yields rose across the board at this week's auction, with the one-year bill up 10 basis points to 10.27 percent, the public debt department said.

The yield on the three-month bill rose 7 basis points to 8.52 percent, while the yield on the six-month bill rose 10 basis points to 9.63 percent, the public debt department, a unit of the Central Bank, said.

It said it got bids worth Rs82.5 billion and accepted bids worth Rs33.6 billion.

Sri Lanka Lighthouse to build hotel in Unawatuna

ECONOMYNEXT – The Lighthouse Hotel said it plans to build a 36-roomed hotel in Unawatuna, a bay popular with tourists on Sri Lanka’s south coast.

The hotel would have an estimated cost of 350 million rupees, the company, part of the Jetwing hotel group, said in a stock exchange filing.

The firm’s Board of Director has approved a proposal to set up a fully owned company to build the hotel in Unawatuna, it said.

Tourist arrivals rise in April

Sri Lanka’s tourist arrivals rose 11.6 percent for April this year to 136,367 compared to the 122,217 in April 2015,the data released by the Sri Lanka Tourism Development Authority (SLTDA) showed.

Total arrivals for the first four months of this year rose 20.0 percent to 721,185 arrivals compared to the 601,055 visited in the same period of 2015.

Arrivals from South Asia for April increased 13.4 percent to 37,312 while visitors from India increased 12.3 percent to 25,890 in April. Tourist arrivals from Pakistan declined 18 percent to 2,260.

Chinese tourists rose 37.6 percent to 18,972. Tourist arrivals from Middle East increased 5.8 percent to 5,803 visitors. Tourist arrivals from East Asia increased 22.6 percent to 29,786 visitors.

Tourist arrivals from North America increased 3.4 percent to 6,370 in April this year. Western European arrivals were up 12.2 percent to 39,243. Tourist arrivals from Germany, UK and France reached 8,065, 12,006 and 7,518 respectively. (IH)