Sri Lanka's Distilleries Company Sept quarter net up 30-pct

ECONOMYNEXT - Profits at liqour producer Distilleries Company of Sri Lanka Plc grew 30.2 percent from a year earlier to 1.2 billion rupees in the September 2018 quarter on lower finance costs and selling expenses, interim accounts showed.

Earnings were 26 cents a share in the quarter. In the six months to end September 2018, earnings were 49 cents a share on a profit of 2.26 billion rupees, up 50.8 percent from a year earlier, financial results filed with the Colombo Stock Exchange showed.

The liqour producer, a unit of listed Melstacorp Plc, was trading 10 cents higher at 16.90 rupees on Thursday.

In the quarter, gross revenue fell 11 percent from a year earlier to 19.8 billion rupees. Net revenue, less excise taxes fell 4.8 percent to 6.7 billion rupees.

Cost of sales decreased a faster 17 percent to 4.2 billion rupees leading to gross profits growing 28.2 percent to 2.5 billion rupees.

Other operating income fell 74 percent to 29.6 million rupees.

Distribution expenses grew 20.3 percent to 152 million rupees and administrative costs rose 6.4 percent to 285.9 million rupees.

Net finance income had fallen 80.5 percent to 29 million rupees as short term borrowings fell to 2.2 billion rupees at end September 2018, down from 7.3 billion a year earlier.

Construction, real estate push Sri Lanka's Access Engineering Sept net up 106-pct

ECONOMYNEXT- Profits at Sri Lanka's Access Engineering Plc grew 106.2 percent from a year earlier to 630.6 million rupees in the September 2018 quarter boosted by earnings from construction and real estate, interim accounts showed.

The earnings per share for the quarter were 0.63 rupees. For the six months to end September, earnings per share were 1 rupee on a profit of 995.6 million rupees, up 10.7 percent from a year earlier, according to interim results filed with the Colombo Stock Exchange.

The stock was trading 40 cents higher at 16.20 rupees Thursday.

In the September quarter, revenue grew 13.9 percent from a year earlier to 7.8 billion rupees, while cost of sales increased 8.3 percent to 6.5 billion rupees leading to gross profits growing 51.6 percent to 1.3 billion rupees.

Other income grew 363.3 percent to 133.2 million rupees.

Net finance costs grew 91.1 percent to 177.6 million rupees.

The group asset base grew to 45.8 billion rupees at end-September, up from 44.4 billion rupees at the start of the year.

Long-term borrowings remained flat over the 6-month period at 5.1 billion rupees, while short-term borrowings fell to 3.6 billion rupees from 3.9 billion rupees.

In the segment results for the first six months, construction was the largest, with profits up 40.5 percent from a year earlier to 809.2 million rupees with revenue up 8.4 percent to 7.7 billion rupees.

Profits from the property segment grew 170 percent to 391.3 million rupees with sales up 159.5 percent to 383.5 million rupees.

Construction material trading profits were up 121.6 percent to 240.7 million rupees with revenue up 33.5 percent to 1.5 billion rupees.

Automobile segment profits fell 66.8 percent to 79.7 million rupees despite revenue growing 7.9 percent to 4.1 billion rupees.

Sri Lanka's Hatton National Bank Sept net up 17-pct

ECONOMYNEXT - Profits at Sri Lanka's Hatton National Bank grew 17 percent from a year earlier to 4.8 billion rupees in the September 2018 quarter, on better interest margins and forex gains due to rupee depreciation, interim accounts showed.

Earnings were 9.68 rupees a share in the quarter. In the nine months to end September, earnings were 28.25 rupees a share on a profit of 13.8 billion rupees, up 23 percent from a year earlier, interim statements filed with the Colombo Stock Exchange showed.

Hatton National Bank ended 20 cents lower at 215 rupees on Wednesday.

"The bank’s initiatives in centralization and digitalization has yielded a continuous improvement in HNB’s Cost-to-Income ratio, which improved to 36.9 percent for the nine months ending September 2018, exceeding that recorded during the corresponding period of 2017 by 360 basis points," a statement from the bank said.

During the quarter, net interest income grew 15 percent to 13.7 billion rupees as interest income grew 10 percent to 29.5 billion rupees and interest expenses grew a slower 6 percent to 15.9 billion rupees.

Net fee and commission income grew 10 percent to 2.5 billion rupees.

The banking group made a trading profit of 189.3 million rupees in the quarter, up from a loss of 1.8 billion rupees a year earlier due to a revaluation of currency swaps due to rupee depreciation and low volumes compared to the previous year, the bank said.

Bad loans provisioning increased 87.6 percent to 1.8 billion rupees.

Non-performing loans were 3.1 percent of total loans at end September, up from 2.28 percent nine months earlier, "reflecting macro and industry conditions which have precipitated delays across the industry in collections," the bank told shareholders.

Personnel expenses rose 20 percent to 3 billion rupees and other expenses increased 17 percent to 3.1 billion rupees.

Premium income from a subsidiary insurance company increased 20 percent to 1.9 billion rupees while benefits, claims and underwriting expenses rose 17 percent to 1.8 billion rupees.

The banking group's loan book expanded 12 percent from nine months earlier to 736.7 billion rupees at end September while deposits grew 10 percent to 776.3 billion rupees.

Over the nine months period, the bank's interest margin has improved to 4.58 percent, up slightly from 4.25 percent.

Basel III Tier I Capital was 13.25 percent at end September, down from 13.68 percent nine months earlier but above the regulatory minimum of 8.875 percent.

Total Capital adequacy was at 15.67 percent, above the regulatory minimum of 12.875 percent but down from 16.72 percent nine months earlier.

Sri Lanka's Ceylon Grain Elevators net up 101.6-pct in Sept

ECONOMYNEXT- Sri Lankan animal feed and poultry producer Ceylon Grain Elevators Plc net profits in the September quarter grew 101.6 percent from a year earlier to 233.3 million rupees with higher feed and chicken sales, interim financials said.

"Group’s revenue and profitability improved due to increased demand for feed and chicken meat during the quarter under review," Director/Chief Executive Cheng Chih Kwong Primus told shareholders.

"Growth in feed sales volume was driven by consistency in feed quality and maintaining strong partnerships with key chicken processors," he said.

"Profitability of the group has been sustained by efficiency in the farms’ operations and the continued success in optimising formulated feed costs."

The firm said its earnings per share were 3.89 rupees.

Earnings per share for the first nine months of the year were 10.83 rupees, with net profits up 53.2 percent from a year earlier to 649.8 million rupees.

Revenue for the September quarter was up 31 percent from a year earlier to 4.9 billion rupees, while cost of sales grew 27 percent to 4.4 billion rupees, and gross profits grew 78 percent to 506.6 million rupees.

Finance income grew 45 percent to 101.8 million rupees and finance costs were 51.3 million rupees.

The firm had 39.6 million rupees in short-term borrowings by September, from no borrowings at the start of the year.

In the first nine months, post-tax profits from feed milling and farming grew 141.7 percent from a year earlier to 479.2 million rupees while revenue grew 9.7 percent to 12.2 billion rupees.

Post-tax profits from poultry production and sales grew 14.8 percent to 530 million rupees with revenue up 10.5 percent to 2 billion rupees.

The firm said the December quarter will be challenging.

"The Group foresees a challenging market situation in the forthcoming quarter as cost of production will increase substantially due to increase in key raw material prices riding on the severe depreciation of LKR against USD," the chief executive said.

"Also the Group anticipates lower demand with the declining consumer purchasing power as a result of price hikes on basic consumer staples and inclement weather," he said.

Hemas Holdings Sep net up 27-pct; consumer segment drives growth

ECONOMYNEXT - Profits at Sri Lanka's Hemas Holdings Plc grew 27.6 percent from a year earlier to 926.6 million rupees in the September 2018 quarter driven by strong growth in its consumer businesses and stationery subsidiary Atlas, interim accounts showed.

Earnings in the quarter amounted to 1.62 rupees a share. In the six months to end September, earnings were 2.58 rupees a share on a profit of 1.48 billion rupees, up 4.3 percent from a year earlier.

"The lower growth in earnings (in the six months to end September) is due to increased net interest expense post utilisation of cash reserves to acquire Atlas in January 2018, higher working capital due to strong revenue growth in pharmaceutical distribution and the loan financing for our new logistics park, " Chief Executive Steven Enderby told shareholders.

"The business environment remains challenging with significant and on-going currency devaluation through September and October, and political uncertainty impacting the domestic economy, the source of our major business activity," he said.

Hemas was trading 3 rupees higher at 90 rupees on Wednesday.

In the September quarter, Hemas Holdings' revenue grew 44.3 percent from a year earlier to 16.5 billion rupees, with cost of sales growing a faster 53.5 percent to 11.1 billion rupees leading to gross profits increasing 28.3 percent to 5.4 billion rupees.

Selling and distribution expenses rose 41.5 percent to 1.4 billion rupees and administration costs increased 21 percent to 2.5 billion rupees.

Net finance cost was 155 million rupees, down from a net finance income of 71 million rupees a year earlier. The group's total borrowings grew 65 percent from a year earlier to 11.4 billion rupees at end September 2018.

-Consumer driven growth-

Hemas Holdings' September earnings were boosted by its consumer segment which includes FMCG and personal care goods and stationery subsidiary Atlas.

Revenue from the consumer segment grew 80 percent from a year earlier to 6.8 billion rupees in the quarter and profits grew 108 percent to 721.7 million rupees.

"The Sri Lankan home and personal care market continues to be challenging, however we experienced growth from brand re-launches in our core personal care categories. Further, we are also seeing the benefits of our profit improvement programme initiated last year improving operating margins," Enderby said.

Hemas' Bangladesh operations continue to experience challenges amidst intense competition, he said.

"Atlas performance has been on track in the (September quarter, with revenues up by 12.4 percent over the same period last year," Enderby said.

Earnings from healthcare fell 21 percent to 322 million rupees despite revenue increasing 30 percent to 7 billion rupees.

Currency depreciation and price controls are compressing margins at the group's pharmaceuticals distribution business and impacting sales of over the counter drugs, Enderby said.

"Hemas Hospitals achieved an overall occupancy of 57%, with revenues and profitability improving significantly during the September quarter compared to the first three months of the financial year and over last year. The key driver of growth is the continued enhancement in surgical capability," Enderby said.

The Leisure sector saw revenue grow 17 percent to 1 billion rupees but reported a 104 million loss, deepening from a loss of 6.4 million rupees a year earlier due to foreign exchange losses and refurbishment costs.

The group's Serendib Hotels reported a 10.2 percent growth in revenue due to an increase in average room rates and average occupancies across the group reaching 69 percent, up from 64 percent a year earlier, Enderby said.

The travel and aviation segment reported a revenue growth of 22.1 percent driven by newly secured agents under inbound travel, the chief executive said.

Revenue from maritime and logistics-related businesses which includes warehousing and a logistics park increased 7 percent to 719.2 million rupees in the quarter, but profits declined 9 percent to 175.3 million rupees due to fuel price increases.

Revenue from other businesses had grown 34 percent with profits falling 17 percent to 115.2 million rupees.

"Our technology business, N-able witnessed a gradual improvement in the second quarter with increased revenues over last year by 31.7 percent.

However, a significant drop in revenue due to delays in project completion during the first quarter continues to have an impact on year to date profitability," Enderby said.

Nestlé’s Sri Lanka unit Sept quarter net profit up 16-pct

ECONOMYNEXT – Net profits at Sri Lanka's Nestlé unit rose 15.6 percent to 941 million rupees in the September 2018 quarter from a year ago despite lower sales as it restrained costs amid sharply higher tax payments.

Sales of the local unit of the Swiss food multinational fell three percent to 9.3 billion rupees in the period, interim accounts filed with the stock exchange showed.

Cost of sales fell 12 percent to 5.59 billion rupees with gross profit up 13 percent to 3.7 billion rupees.

Nestlé Lanka’s basic earnings per share were 17.52 rupees in the September 2018 quarter.

EPS in the period to September 2018 was 48.77 rupees with net profit up 6.7 percent to 2.6 billion rupees.

Tax costs rose sharply in the September 2018 quarter, up 48 percent to 366 million rupees as Nestlé Lanka became subject to a higher effective tax rates under a new tax law from April 2018.

This led to profit being liable to tax at 28 percent.

Before the new law became effective Nestlé Lanka’s qualifying export profits were taxed at a concessionary rate of 12 percent, profit from its ready-to-drink milk business was taxed at the concessionary rate of 10 percent and profit from offshore business earned in foreign currency exempt from income tax.

Sri Lanka rupee hits record low amid continued political uncertainty

Reuters: ** The Sri Lankan rupee fell to an all-time low of 177.35 per dollar on Monday, as political uncertainty outweighed the positive impact of a policy rate hike, sources said.

** Stocks closed weaker for the second straight session due to political uncertainty and the policy rate hike.

** The political uncertainty remained the main concern of investors a day after President Maithripala Sirisena asked an all-party meeting to hold a third vote on a no-confidence motion against Prime Minister Mahinda Rajapaksa after rejecting the first two motions passed by a majority in the parliament, deepening the country’s political crisis.

** The central bank on Wednesday unexpectedly raised its key policy rates, in a move aimed at defending a faltering rupee as foreign capital outflows pick up amid an escalating political crisis and rising U.S. interest rates.

** The rupee hit a fresh low of 177.35 per dollar on Monday, surpassing its previous low of 176.80 hit on Thursday.

** The currency ended at 177.30/50 per dollar on Monday, compared with 176.60/80 at previous close. It has weakened more than 2.4 percent since the political crisis began on Oct. 26 and more than 15.4 percent so far this year.

** Foreigners sold a net 147.1 million rupees worth of stocks on Monday. They have offloaded equities worth 7.8 billion rupees since the political crisis started on Oct. 26.

** The bond market saw outflows of about 22.9 billion rupees between Oct. 25 and Nov. 7, central bank data showed. This year, there have been 17.3 billion rupees of outflows from stocks and 112.8 billion rupees from government securities, bourse and central bank data showed.

** The Colombo stock index fell 0.13 percent to 5,947.90 on Monday. It declined 0.39 percent last week after falling 1.9 percent in the previous week. Heavy retail investor buying had lifted it 4.5 percent in the week before. It has slipped 6.5 percent so far this year.

** Stock market turnover was 299.6 million rupees ($1.70 million) on Monday, well below this year’s daily average of 838.1 million rupees. 

($1 = 176.7000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)