Sri Lanka's DFCC Bank net up 3.8-pct

Feb 14, 2014 (LBO) - Profits at Sri Lanka's DFCC Bank group rose 3.8 percent from a year earlier to 791 million rupees from a year earlier helped by fair value gains and interest income, interim accounts showed.

The firm reported earnings of 2.99 rupees per share for the quarter. For the nine months to December it reported earnings of 7.47 rupees per share, on total profits of 1.97 billion rupees down from 2.1 billion rupees a year earlier.

The nine month profits also included a value added tax reversal of 187 million rupees.

In the December quarter interest income rose 9.3 percent to 4.5 billion rupees, interest expense rose at a slower 7.9 percent to 2.6 billion rupees and net interest income rose 11.3 percent to 1.8 billion rupees.

The bank shows the cost of forex borrowings separately.

Loans grew from 98 billion rupees to 106 billion in the nine months to December.

Loan loss provisions rose to 288 million rupees from 145 million rupees a year earlier and financial investments rose to 39 billion rupees from 27 billion rupees a year earlier.

Gross assets rose to 170 billion rupees in December 2013 from 151 billion rupees in March. Net assets rose to 38.6 billion rupees from 36.7 billion rupees.

NDB Capital Holdings records 932 mn profit at group level

NDB Capital Holdings PLC ("NCAP" or "the Company") recorded the best financial year of its history, outperforming both 2012 and 2006 results adjusted for the capital gains that resulted from the sale of stakes held in Aviva NDB Insurance PLC(in 2012) and Eagle Insurance Company Limited (in 2006). The NCAP Group’s consolidated income increased by 85% to Rs. 1,469Million during the year 2013 from Rs. 792 Million in 2012 (adjusted for Aviva capital gain).This translated to a Group bottom line ofRs. 932 Million, a year on year increase of 21% (adjusted 2012).

At the Company level, NCAP recorded an impressive revenue growth of 41%, increasing the total revenue to Rs. 784Million in 2013 from Rs. 556 Million (adjusted) in the previous year. Net profits too rose toRs. 681Million from Rs. 488million (adjusted), a rise of 40%. Profitability was mainly fueled by efficient asset allocation towards high yielding investments and tax efficient investment strategies.

The restructuring carried out at NDB Group in creating a pure capital markets play at NCAP, is gradually starting to show results with the improved ROE (adjusted 2012)at both company and Group level. The Group ROE increased to 16.1% for the financial year 2013 from 13.8% in 2012. In the same period, the Company improved its ROE from 10.3% to 12.8%. Looking back at the ROEs prior to the restructuring, the Group has shown a highly impressive turnaround with the consolidated ROE which stood at 7.0% in 2011 increasingto 16.1% by the end of 2013. The growth in Group profitability was supported by the strong performance of the fee based businesses which are carried out through NCAP’s subsidiaries,NDB Investment Bank Limited, NDB Securities (Pvt) Limited and NDB Wealth Management Limited.

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Hemas Holdings Chairman/CEO’s Review

It is with great pleasure that I present to you the results of the third quarter of 2013/14. Your company ended the quarter on a positive note with a revenue growth of 22.5% to reach Rs 23.7Bn, and an operating profit growth of 38.2% to post Rs 2.2Bn. Revenue growth was primarily driven by our Healthcare, FMCG and Transportation sectors which grew by 32.4%, 26.8% and 44.6%, respectively, while increase in earnings was led by Healthcare, FMCG and Power sectors which posted a growth of 23.2%, 6.7% and 29.6% respectively. The underlying earnings recorded a growth of 18.5% after adjustments for the performance of Thalawathugoda hospital, closure for refurbishment of Club hotel Dolphin and Hotel Sigiriya, and the capital gain arising from the transfer of Peace Haven land to a joint-venture with Minor International.

The FMCG sector ended the quarter on an encouraging note recording a revenue of Rs 7.2Bn a 26.8% growth over the previous nine months, while sector operating profits grew at 23.8% to record Rs. 660Mn. The sector’s personal care and personal wash categories were the main contributors to growth with Baby Cheramy, Clogard and Diva being the top performing brands. The sector’s eventful calendar continued with the re- launch of our hair care brand Dandex in October enhancing the product and packaging, with the objective of strengthening its proposition of being the leading anti-dandruff shampoo in the market. With the intention of creating a modern consumer appeal for the brand a new communication campaign ‘Hisata Nidahasa’ was launched via TV, radio and press advertisements. During the quarter our men’s grooming brand Pro Sport was re launched as PRO whilst our washing power brand Diva was re-launched with improved product and packaging. The sector is poised for an eventful quarter, with an active program of restaging key Brands to enhance appeal with consumers.

Our Healthcare sector recorded revenues of Rs 8.8Bn, a growth of 32.4% over the same period last year, whilst sector operating profit increased by an impressive 25.1% to reach Rs. 741Mn. Sector revenue was largely driven by the positive performance of our Pharmaceutical distribution business together with our new hospital at Thalawathugoda. Our Pharmaceuticals business posted an 18.9% growth in revenue, strengthening its market leadership position and increasing its market share to 19.2% (Source: IMS). The business recently finalized its purchase of a modern 35,000 square foot warehouse located on 180 perches of prime property in Elakanda, Wattala. Located closer to seaport and airport, the warehouse is equipped with all necessary facilities for regulatory compliance including cold storage and temperature controlled environments. This will further enhance capacity to accommodate future growth. Our hospitals at Wattala and Galle experienced a marginal improvement in both topline and bottom-line. Our new hospital at Thalawathugoda continued to see a steady pick-up in volumes driven by the local community and strengthened by the laboratory and theatre operations at the hospital. 

Our Leisure sector recorded a revenue of Rs. 891Mn and an operating profit of Rs. 53Mn for the nine months a 17.7% and a 78.8% decline, respectively. This was primarily due to the closure of Hotel Sigiriya and Club Hotel Dolphin for refurbishment during the period under review. Club Hotel Dolphin was reopened on 1st November 2013 after an extensive refurbishment and has since seen encouraging occupancy levels in excess of 80%, while Hotel Sigiriya was reopened earlier this year. During the quarter all our four hotels were awarded the ‘Travelife GOLD’ certification. ‘Travelife GOLD’ is an international certification developed by the travel industry to recognise the highest level of commitment of a travel partner towards sustainable travel practices. Avani Kalutara was bestowed the ‘Top Hotel 2014’ by Holiday Check, a popular e-travel site. With the availability of the Group’s full inventory and encouraging forward bookings, we are well positioned to compete with the new properties which are expected to enter the market going forward.

Transportation sector posted a revenue of Rs. 1.08Bn and an operating profit of Rs 335Mn, recording a growth of 44.6% and 25.1% respectively. Performance of the sector was largely driven by the aviation, transshipment and the logistics segments. Our new integrated logistics arm, Hemas Logistics celebrated the opening of its first container yard operation at Welisara in the month of November. Since its opening the yard operation has experienced a steady pick up in volumes, a trend we expect would continue into the next quarter. Sector performance was provided an additional boost with increasing transshipment volumes which contributed towards the improved profitability of the maritime segment.

Power sector recorded a marginal increase in revenue of 0.5% to post Rs. 4.4Bn largely impacted by the drop in generation at our thermal power plant Heladhanavi resulting from the continued curtailment imposed by the CEB at the beginning of the financial year. However, the impact was negated with the strong results from our hydro power sector which experienced higher rainfall around the catchment areas and by the increase in the avoided-cost-tariff during the year. The sector profitability was augmented by the notable performance of the hydro power assets held by Pan Asian Power PLC during the period under review.

The performance of our recent acquisition, J.L. Morison Son & Jones (Ceylon) PLC has been encouraging with the pharmaceutical distribution and manufacturing segment recording an impressive revenue growth of 14.8% year on year. This growth has supported the Company’s operating profit growth of 23.2%, despite a drop in revenue for the period ending 31st December 2014. Post-acquisition, management has been focusing on business integration to fall in line with Hemas policies, processes and systems, thereby gearing up the company for faster growth. The company which began operations in 1939 celebrated its 75th Anniversary on January 31st.

As we enter the last quarter, which is traditionally our best performing one, we remain optimistic of closing the year on high note.

Husein Esufally
Chairman/CEO
Colombo
February 12, 2014

Sri Lankan shares steady at 5-week closing low; foreigners buy amid concerns

Feb 13 (Reuters) - Sri Lankan shares ended steady on Thursday at their lowest close in five weeks ahead of central bank's policy rate decision, but foreigners bought the island nation's risky assets on a net basis after five straight sessions, though stockbrokers said foreign funds' exit is far from over.

Foreign investors bought a net 118.97 million rupees ($909,400) worth of shares on Thursday, after the market suffered a 4.62 billion rupees outflow in the previous five sessions as some offshore funds exited the market amid broader selloff from emerging markets.

The main stock index ended 0.02 percent down, or 1.09 points, at 6,083.39, its lowest close since Jan. 10. It has lost over 2.6 percent in the last eight sessions through Thursday.

The bourse has seen 3.11 billion rupees of foreign outflow so far in 2014, after enjoying a net inflow of 22.88 billion rupees last year

Analysts said the market is still concerned over further foreign outflows, which is largely due to foreign selloff in emerging markets with some offshore funds exiting with profits.

"Foreign selling is not completely over. Some of those funds that exit last week are still negotiating to sell some quantity. So the main concern is when this foreign selling would end," a stockbroker said on condition of anonymity.

The broader market expects the central bank to hold its key policy rates at multi-year lows at its announcement scheduled for Monday.

Analysts said local investors are active in the market after interest rates on treasury bills eased to multi-year lows, making fixed-income assets unattractive.

Top conglomerate John Keells Holdings Plc lost 1.46 percent, pulling the overall index down.

The index, however, has risen 2.89 percent so far this year, following a 4.8 percent gain in 2013. It fell in the previous two years.

The day's turnover was 665 million rupees, less than this year's daily average of about 1.22 billion rupees. The market has witnessed an average turnover of 1.71 billion rupees in the seven straight sessions through Tuesday, which analysts attributed to active buying by local investment funds and institutional investors.

Both stocks and currency markets will be closed for a Buddhist religious holiday on Friday. Normal trading will resume on Monday. ($1 = 130.8250 Sri Lanka rupees) (Reporting by Shihar Aneez and Ranga Sirilal; Editing by Anand Basu)

Sri Lanka stocks close lower

Feb 13, 2014 (LBO) – Sri Lanka stocks close 0.02 percent lower for the second consecutive day with diversified stocks losing ground, brokers said.

The Colombo benchmark All Share Price Index closed 1.09 points lower at 6,083.39, down 0.02 percent. The S&P SL20 closed 11.20 points lower at 3,325.76, down 0.34 percent.

Turnover was 665.01 million rupees, up from 548.63 million rupees a day earlier, with stocks of 76 firms closing in the red against 94 gainers.

JKH topped the turnover contribution with 133.83 million rupees of market transactions contributing to 20 percent of the total turnover.

The aggregate value of off market deals accounted for 20 percent of the daily market turnover.

JKH’s W0022 warrants closed 40 cents higher at 63.00 rupees and its W0023 warrants closed 1.00 rupee higher at 66.00 rupees, attracting most number of trades during the day.

Foreigners bought 226.99 million rupees worth shares while selling 108.02 million rupees of shares.

JKH closed 3.30 rupees lower at 222.00 rupees and Carson Cumberbatch ended 7.00 rupees lower at 350.00 rupees, contributing most to the index drop.

Distilleries closed 2.20 rupees lower at 215.00 rupees and Ceylon Tobacco Company closed 10.00 rupees higher at 1,250.00 rupees.

SLT closed 1.20 rupees higher at 42.50 rupees and Dialog closed 10 cents higher at 9.20 rupees.

Commercial Leasing and Finance closed 10 cents higher at 4.10 rupees and Cargills Ceylon closed 1.00 rupee lower at 147.00 rupees.

Bukit Darah ended 10 cents lower at 600.30 rupees and Nestle Lanka ended flat at 2,100.00 rupees.

Sri Lanka based First Capital plans Rs. 500 mn debt sale

First Capital Holdings Limited is planning to raise Rs. 500 million via a debenture issue.

The issue would be opened for public subscription early next month.

The company will issue 5 million, rated, senior, unsecured, redeemable debentures at an issue price of Rs. 100 each.

The debts once issued would be listed on the CSE.

The issue would be opened on the 4th of March.

First Capital is a firm engaged in structuring and placing of listed and unlisted corporate debt products and also acts as a primary dealer, wealth manager, unit trust and corporate finance firm.
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Sri Lanka Treasuries yields mixed

Jan 11, 2014 (LBO) - Sri Lanka's short term Treasuries yields fell at Tuesday's auction from two weeks ago, but the 12-month yield was steady from a week earlier, data from the state debt office showed.

Last week bids for 3 and 6 month bills were rejected.

The 3-month yield was down 05 basis points to 6.77 percent and the 6-month yield was down 08 basis points to 6.92 percent from two weeks ago.

The 12-month yield was flat at 7.10 percent.

The debt office offered 12.0 billion rupees of bills for auction and accepted 20.8 billion in bids.