Dr. T. Senthilverl’s Laxapana Batteries stake tops 10%

High net worth but low-profile investor Dr. T. Senthilverl has increased his stake in Laxpana Batteries Plc to over 10%.

This was following him buying 0.44 million shares at Rs. 11 each on top of the 3.66 million shares he held previously.

E.B. Creasy Group and related parties control over 60% stake in Laxapana Batteries. 

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LOLC posts Rs 3.2 bn profit in first quarter

LOLC’s dominant financial services sector companies, led the Group to record strong profits in the first three months of 2016/17, a PBT of Rs. 3.2 bn when compared to Rs. 2.7 bn recorded in the same period last year.

The current year’s performance, strengthened by the outstanding performance of the Group in 2015/16 of Rs. 11.9 bn of PBT, is a 45% growth over the last year. The financial services companies which account for 82% of the Group’s PBT, showed a remarkable growth in terms of an increase in the lending portfolio consequent to the aggressive growth in their lending books.

As a result, the total Asset base of the Group reached Rs. 380 bn.The contribution to the high growth was achieved, resulting a portfolio growth of 52% to Rs. 213 bn from Rs.140 bn.

LOLC’s Group Managing Director Kapila Jayawardena said LOLC’s outstanding performance in 2015/16 is mainly derived from the financial services sector, where all companies have recorded exceptional performances. “The robust growth in the lending business, supported by the strong funding line, from both local and foreign sources at attractive terms and conditions, improved the income generating capacity of the sector. The strong collections enabled the Group to achieve a better NPL level and enabled all the companies in this sector to perform exceptionally well,”he said.

The leisure business of the Group led by Browns Hotels and Resorts (BHR), The Eden Resort and Spa in Beruwala, The Paradise Resort and Spa in Dambulla, Dickwella Resort and The Calm Resort and Spa in Pasikudah are generating moderate results despite the challenging environment in which they operate.

However, in comparison to the previous year higher profits are expected in 2016/17. The two hotel properties under construction, The Turtle Beach Resort in Kosgoda and Riverina Resort in Beruwala are progressing as planned.

LOLC, one of the largest conglomerates in Sri Lanka, its core business being financial services, comprises of three finance companies and one leasing company falling under the purview of the Central Bank of Sri Lanka.

The flagship finance company LOLC Finance PLC (LOLC Finance), Commercial Leasing and Finance PLC (CLC) and the newly acquired BRAC Lanka Finance PLC (BRAC) together with LOLC Micro Credit Limited (LOMC) recorded a strong financial performance in the year 2015/16 and continued the momentum during the first three months of the current year accounting for 89% of the Group’s PBT.

The strong performance was enhanced by the high yielding overseas investments made in LOLC Cambodia, PRASAC Micro Finance Company in Cambodia and LOLC Myanmar.

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Sri Lankan stocks end steady; turnover moderate

Reuters: Sri Lankan shares ended steady on Thursday in moderate trading volume as local buying boosted by positive sentiment was offset by foreign outflows and selling for month-end settlement.

Sentiment has been positive after the authorities started to take some bold steps to counter a balance of payments and credit problem.

Sri Lanka's new government is drafting reforms aimed at simplifying taxes, widening the tax base and increasing compliance, Finance Minister Ravi Karunanayake said on Wednesday, two days after his ministry said the country's tax revenue in the first seven months jumped 23 percent to 769.8 billion rupees from a year earlier.

The benchmark Colombo stock index ended 0.02 percent up at 6,589.71, hovering around its highest close since May 20 hit on Tuesday.

"There was some profit-taking due to month-end settling though the market is still on positive sentiment," said Prashan Fernando, COO at Acuity Stockbrokers.

Foreign investors sold a net 78.4 million rupees worth of shares on Thursday, extending the outflow so far this year to 3.94 billion rupees worth of shares. They are, however, net buyers of 714.4 million rupees worth of equities so far this month.

Turnover stood at 624.5 million rupees ($4.30 million), below this year's daily average of around 750 million rupees.

Conglomerate John Keells Holdings Plc edged up 0.4 percent, while private lender Sampath Bank fell 0.6 percent. 

($1 = 145.1000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Sunil Nair)

Sri Lanka corporate earnings growth slows to 6.0-pct in June quarter

ECONOMYNEXT - Sri Lanka's corporate earnings grew 6.6 percent from a year earlier in the June 2016 quarter to Rs50 billion, slowing from 15.9 percent in the March quarter, an equities research report said.

CAL Research, a Colombo-base equities research house, said trailing 12-month earnings grew 5.0 percent to Rs217 billion, compared to a 16.5 percent growth last year.

CAL compared the results of 265 companies for year-on-year data. March quarter data involved 269 firms and the difference was not material, an analyst said.

In 2015, Sri Lanka's economy got an artificial boost as the government deficit spent, hiking state salaries and pensions and the central bank released about Rs300 billion of liquidity and printed outright about another Rs200 billion to drive credit to unsustainable levels and trigger a balance of payments crisis.

This year, credit is expected to be driven by real deposits.

Banks, Finance and Insurance, the largest sector in the Colombo Stock Exchange, showed a 46 percent gain; Beverage, Food and Tobacco gained 15 percent; and Diversified Holdings grew 10 percent.

The biggest individual contributors were Hatton National Bank (6.8 percent), Commercial Bank (6.5 percent), Ceylon Tobacco (6.1 percent) and John Keells Holdings (4.8 percent).

Top growth was shown by Power and Energy (166 percent), and Land and Property (+82 percent). (Colombo/Aug24/2016)

Motor industry records growth due to increase in per capita GDP

The motor industry in Sri Lanka has recorded enormous growth during the post war period in the country, mainly due to the increasing per capita GDP, which resulted in increasing customer affluence and proportionate increase in the spending on transportation.

The robust growth is expected to prevail with overall growth in consumption, development of road infrastructure and poor state of public transportation resulting an increase in demand for passenger vehicles. Also with the expected growth in the construction sector the demand for commercial heavy vehicles are expected to grow.

Over the past five years the tyre industry in Sri Lanka has been growing substantially due to the rise seen in the number of automobiles owing to increase in income levels, low interest rates and the growing infrastructure levels in the country.

Therefore, SC Securities (Pvt) Ltd expects the growth in demand for tyres in to positively benefit the company in the forthcoming period as CEAT Sri Lanka, is the present market leader in the radial and commercial tyre segments in the country.

Sri Lankan tyre manufactures caters to 22 % of the global solid tyre demand, with many manufactures producing specialized tyres to serve the growing technical requirements of the industrial world. Solid rubber tyres are used in forklifts and land mowers and industrial vehicles such as heavy trucks and trailers. Unlike pneumatic tyres, solid tyres are not filled with air and can endure high pressure and weight and are more durable to wear and tear.

At present, CEAT Sri Lanka manufactures half of the countries requirements with a 17 % share in the motorcycle segment in Sri Lanka, 30 % in the radial segment, 51 % in the truck/light segment, 54 % in the three wheel segment and 72 % agriculture tyre segment. Further, the company has a monthly tyre production volume of over 1,450 MT.

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Browns Beach Hotels to raise Rs 1.4 bn

Browns Beach Hotels is to raise Rs. 1.4 billion via a rights issue, the company said in a stock exchange.

The company will issue 54 million new ordinary shares at Rs 25.85 each subject to necessary approvals at an Extraordinary General Meeting of the Company.

The objective of this rights issue would be to re invest it to minimise the existing debt of the company and also to re build the hotel. The new hotel construction work was done under, Negombo Beach Resort (Pvt) Ltd, a fully owned subsidiary of Browns Beach Hotels PLC.

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Distilleries Corp. to be suspended

Shares of Distilleries Corporation of Sri Lanka will be suspended and owners as of September 30 will get four shares of Melstacorp in return, company said in a stock exchange filing.

The trading in shares will be suspended starting from October until the public float in DCSL is restored. Distilleries will then become a 100% owned unit of Meltacorp.

Directors of DCSL recently decided to make Melstacorp limited the ultimate holding company of the group and to obtain a listing from the CSE subject to necessary approvals.

The decision is subject to the special resolution being passed by the shareholders at the EGM convened for 6 September and the Court sanctioning the arrangement on the 7 September being the date fixed for the next hearing.
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