Sri Lankan shares fall to near six-week low on foreign selling

Feb 18 (Reuters) - Sri Lankan shares fell for a fourth straight session on Tuesday to a six-week low as foreign investors dumped the island nation's risky assets on a day of thin trading.

The main stock index ended lower 0.57 percent, or 34.45 points, at 6,021.66, its lowest close since Jan. 7. It has lost 3.62 percent in the last 10 straight session.

Foreign investors sold a net 229.52 million rupees ($1.75 million) worth of shares on Tuesday, extending outflows to 4.87 billion rupees in the past eight sessions as some offshore funds exited the market.

The bourse has seen 3.48 billion rupees of foreign outflows so far in 2014, after enjoying net inflows of 22.88 billion rupees last year.

Analysts said investors were waiting for direction on foreign selling and concerned over further outflows, though local investors are still optimistic about risky assets due to falling interest rates.

On Monday, Sri Lanka's central bank kept its policy rates steady at multi-year lows, with inflation expected to be contained throughout 2014 by "well-managed demand conditions and improved domestic supply".

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

Shares of Ceylon Tobacco Co Plc fell 2.44 percent to 1,209.70 rupees, while Distillers Sri Lanka Plc fell 3.3 percent to 208 rupees, pulling the overall index down.

Top conglomerate John Keells Holdings Plc lost 0.68 percent to close at 218.40 rupees.

The index has risen 1.84 percent so far this year, following a 4.8 percent gain in 2013.

The day's turnover was 604.1 million rupees, just half of this year's daily average of about 1.2 billion rupees. 

($1 = 130.8250 Sri Lanka rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Prateek Chatterjee)

Sri Lanka stocks close down 0.5-pct

Feb 18, 2014 (LBO) – Sri Lanka stocks close 0.57 percent lower for the forth consecutive day with tobacco and diversified stocks losing ground amid net foreign selling, brokers said.

The Colombo benchmark All Share Price Index closed 34.45 points lower at 6,021.66, down 0.57 percent. The S&P SL20 closed 18.20 points lower at 3,288.04, down 0.55 percent.

Turnover was 604.12 million rupees, down from 613.42 million rupees a day earlier, with stocks of 122 firms closing in the red against 52 gainers.

Dialog closed flat at 9.20 rupees with 110.40 million rupees of off market transactions contributing to 18 percent of the daily turnover.

JKH’s W0022 warrants closed 60 cents lower at 60.00 rupees and its W0023 warrants closed 1.30 rupees lower at 60.70 rupees, attracting most number of trades during the day.

Foreigners bought 44.84 million rupees worth shares while selling 274.37 million rupees of shares.

Ceylon Tobacco Company closed 30.30 rupees lower at 1,209.70 rupees and Distilleries closed 7.10 rupees lower at 208.00 rupees, contributing most to the index drop.

JKH closed 1.50 rupees lower at 218.40 rupees and Bukit Darah ended 2.70 rupees lower at 592.30 rupees.

Commercial Leasing and Finance closed 10 cents higher at 4.20 rupees and Ceylinco Insurance closed 19.00 rupees higher at 1,346.00 rupees.

Aitken Spence closed 90 cents higher at 101.00 rupees and Nestle Lanka ended flat at 2,100.00 rupees.

Carson Cumberbatch ended flat at 350.00 rupees and Cargills Ceylon also closed flat at 135.00 rupees.

Nawaloka Hospital profits dip 43%, finance costs up 70%

By J. Kurukulasuriya

Ceylon FT: Nawaloka Hospitals PLC has settled dollar loans to the extent of Rs 773 million during the quarter, being part redemption of the 15 million unsecured redeemable debentures issued in September 2013, nine-month results for the period ended 31 December 2013 show. Group finance costs increased 70%. The nine month profit of Rs 236 million is a 43% drop compared to the corresponding nine-month period. Nine-month group revenue of Rs 3,210 million and all expenses except finance costs, were virtually unchanged, but operating income increased to 55% to Rs 45 million. Up to 31December the group had paid Rs 870 million as an advance payment for land acquired.

Dividends due to shareholders amounting to Rs 2 million remained "unclaimed."

The stated capital of the company is Rs 1,207 million, divided into 1,409,505,596 shares.

Director H.K.J. Dharmadasa is the top shareholder with 33% of the shares while Nawaloka Construction Company Ltd., holds 31% and director Dr T. Senthilverl holds 22%. Other significant shareholders are the National Savings Bank, Bank of Ceylon, and Seylan Bank.

The directors hold 55% of the share capital and the public hold 12.73% of the share capital.

The share traded at a high of Rs 3.10 and a low of Rs 3.00, the lowest price seen since 
31st March was Rs 2.60, as shown by the quarterly report.

The net asset value of the shares was Rs 2.80 at 31st December.

www.ceylontoday.lk

Healthcare, IT, retail and financial ops boost Softlogic profits

Ceylon FT: Softlogic Holdings PLC showed a profit of Rs 803.12 million for the nine months ended 31 December 2013, up 321.55% from a year ago boosted by strong performances in healthcare, IT, retail and financial services operations, interim financial results showed.

Revenue grew 14.32% to Rs 21.7 billion and gross profit grew 22.7% to Rs 7.4 billion.

Net finance costs fell 14.7% to Rs 1.38 billion, distribution costs increased 22.9% to Rs 1 billion and administrative expenses grew 21.33% to 4.39 billion.

Change in fair value of investment property amounted to a Rs 7.4 million gain and share of profit of equity account investees fell 24.5% to Rs 8.2 million.

The IT segment reported a profit of Rs 195 million, up 21.11% from Rs 161 million a year ago.

"The IT business has been moving forward successfully. The business is now diversifying its focus beyond end-user computing towards enterprise computing. We provide nearly 50%-60% of storage business to EMC, the largest storage supplier in the country. We also tied up with EMC and Lenovo for the back-up recovery system space. A number of contracts have already been struck for this solution. We are targeting the end-user computing via Lenovo and Apple.

Considerable effort has been expended in Continuous Professional Development (CPD) for corporate software security solution," Softlogic Holdings Chairman Ashok Pathirage told shareholders.

The retail sector reported a profit of Rs 412.3 million, up 61.3% from 255.5 million a year ago.

"...with the implication of the new VAT law restricting the retail industry's overall exemption of sales for qualifying items the retail industry is unsure as to how to treat the negative impact arising from this without affecting consumer demand. Industry as a whole has appealed to the authorities in this instance, otherwise, the future of the consumer electronics and durables segment may find it increasingly difficult to operate should these warning go unheeded," he said.

The leisure sector saw losses expand 80.3% to Rs 62.2 million, up from Rs 34.5 million a year ago.

"The hotel project at Bentota - Centara Ceysands Luxury Resort & Spa -is nearing its completion. This new resort, situated in idyllic location with a blend of luxury and unprecedented style, will open its doors for external guests in April 2014; hence this would add to the group's consolidated performance in FY14/15E. 

Construction of Movenpick City Hotel is progressing as per the envisaged time lines. With the completion of the transfer floor at Level six as of 10 February, the target date for opening the five star hotel remains on course – 15 September," Pathirage said.

The automobile sector saw losses contract to Rs 20.5 million, down 26.5% from Rs 27.9 million a year ago.

"The automobile sector is through a challenging phase until such a time the removal of those selective duty waivers is instituted. However, we are now focusing in related diversification to overcome the systemic challenges," the chairman said.

Financial services reported a turnaround, making Rs 56.7 million in profits after a Rs 322.3 million loss the previous year.

"...(the) comprehensive financial service portfolio is well positioned to continue on its platform of aggressive growth, leveraging on its accelerated growth in customer base acquired from diverse sectors of the overall group. Total assets of the sector were Rs 27.4 billion as at 31 December 2013 and recorded an increase of 15% for the nine-month period compared with Rs 23.8 billion as at 31 March 2013."

The healthcare sector reported a Rs 1.02 billion profit, up 50.22% from Rs 679 million a year ago.

"The hospital chain witnessed strong performance in line with their business peak period during the latter of the calendar year when corporate medical insurance claims also crystallize. The management is quite confident of commissioning a Bone Marrow Transplant Unit at Central Hospital Limited during 4QFY14. 

Asiri Hospital Holdings acquired 37.4% stake in the Central Hospitals Ltd., for a total consideration of Rs 2.4 billion from the hospital's private placement investors. Asiri Hospital Holdings now holds 90% effectively in the Central Hospitals Ltd. This assuredly would lead to further enhancement of Asiri group earnings and, hence, the overall Softlogic Holdings earnings, in the upcoming periods," Pathirage said.

A loss of Rs 798.6 million was reported in 'other' segments, up 53.5% from a Rs 520.3 million loss a year ago.
www.ceylontoday.lk

Sri Lankan shares fall to over 5-week low on foreign selling

Feb 17 (Reuters) - Sri Lankan shares fell for a third-straight session on Monday to a more than five-week low as foreign investors continued to dump the island nation's risky assets, contrary to inflows into other emerging markets in Asia.

Before the market opened, Sri Lanka's central bank kept policy rates steady at multi-year lows, with inflation expected to be contained throughout 2014 by "well-managed demand conditions and improved domestic supply".

The main stock index ended 0.45 percent or 27.28 points weaker at 6,056.11, its lowest close since Jan. 8. It has lost over 3.07 percent in the last nine sessions through Monday.

Foreign investors sold a net 144.7 million rupees ($1.11 million) worth of shares on Monday, extending the foreign outflow to 4.64 billion rupees in the past seven days as some offshore funds exited the market.

The bourse has seen 3.25 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 was waiting for directions on the foreign selling and concerned over further foreign outflows.

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 0.95 percent, to 219.90 rupees, pulling the overall index down.

National Development Bank Plc, which posted a 93.5 percent drop in its December-quarter net profit, rose 1.26 percent.

The index has risen 2.42 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 612.7 million rupees, less than this year's daily average of about 1.2 billion rupees. 

($1 = 130.8250 Sri Lanka rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anand Basu)

Dialog Records Rs5.2Bn Net Profit for FY 2013

17th February, 2014. Colombo. 

Dialog Axiata PLC announced, Monday 17th February 2014, its consolidated financial results for the year ended 2013. Financial results included those of Dialog Axiata PLC (the “Company”) and of the Dialog Axiata Group (the “Group”) post-consolidation with subsidiaries Dialog Broadband Networks (Pvt) Ltd (“DBN”), and Dialog Television (Pvt) Ltd (“DTV”).

The Group demonstrated strong revenue growth across Mobile, International, Digital Pay Television, Tele-infrastructure and Fixed Line businesses to record consolidated revenue of Rs63.3Bn for FY 2013, delivering a Year to Date (“YTD”) growth of 12%. Group Revenue for Q4 2013 was recorded at Rs16.3Bn, reflecting growth of 1% Quarter on Quarter (“QoQ”).

Revenue growth in combine with continued operational improvements led to the Group posting a healthy 7% YTD growth in EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) with FY 2013 EBITDA being recorded at Rs19.9Bn. Group EBITDA Margin for FY 2013 declined marginally by 1.5 percentage points on YTD basis to 31.5%. Group EBITDA contracted by 12% QoQ due to higher cost base including escalation of network and other operating costs. Group Net Profit for FY 2013 was recorded at Rs5.2Bn, a decrease of 14% compared to FY 2012, inclusive of a provision for income tax of Rs 1.1Bn., following the Company completing its tax holiday as at the end of FY2012. Group Net Profit Before Tax (NPBT) was recorded at Rs6.3Bn.

Non-Operational performance below EBITDA was positively impacted by the appreciation of the SLR relative to the USD by 0.8% QoQ, resulting in the recognition of a non-cash translational foreign exchange gain of Rs347Mn in the 4th quarter. Inclusive of the recognition of the said non-cash translational foreign exchange gain, Group Net profit for Q4 2013 decreased by 27% to be recorded at Rs1.1Bn. On normalising for the foreign exchange gain, Group NPAT was recorded at Rs769Mn, decreased by 56% QoQ. Group Net Profit for FY 2013 was recorded at Rs5.2Bn, a decrease of 14% compared to FY 2012. While the corresponding period in 2012 featured substantial non-cash foreign exchange losses (totalling to Rs2.2Bn), the accounting impact of the said losses were mitigated through the recognition of the reversal of deferred tax provisions amounting to Rs2.3Bn. Group NPAT post normalisation for the non-cash foreign exchange loss was recorded at Rs5.9Bn for FY2013, representing a decrease of 5% relative to the corresponding period in 2012 on similarly normalised basis excluding exceptional provisions and reversals.

In line with the performance of the Group and taking in to account forward investment requirements to serve the nation’s demand for Mobile, Fixed, Broadband and Digital Television services, the Board of Directors of Dialog Axiata PLC, resolved to propose for consideration by the Shareholders of the Company, a cash dividend to ordinary shareholders representing 45% of group earnings and translating to twenty nine cents (Rs0.29) per share and totalling to Rs2,362mn. The dividend so proposed will be considered for approval by the shareholders at the Annual General Meeting (AGM) of the Company, the date pertaining to which would be notified in due course.

At an entity level, Dialog Axiata PLC (“the Company”) featuring the Mobile, International and Tele-Infrastructure segments of the Group portfolio continued to contribute a major share of Group Revenue (88%) and of Group EBITDA (89%). Company Revenue grew by 1% QoQ on the back of its 8 Million over mobile subscriber base, to reach Rs14.2Bn in Q4 2013. Revenue for FY 2013 was recorded at Rs55.4Bn, up 11% relative to FY 2012. Underpinned by strong revenue performance Company EBITDA for FY 2013 grew by 9% to be recorded at Rs17.6Bn translating to an YTD EBITDA margin of 32%.

Company NPAT for Q4 2013 was recorded at Rs1.6Bn, a decrease of 8% QoQ. Company NPAT for FY 2013 was recorded at Rs6.1Bn, representing a contraction of 2% compared to FY 2012, due to the differential in exceptional charges and reversals recorded in the periods under comparison. On normalized basis, Company NPAT increased by 6% on YTD basis relative FY 2012. Following the expiry of its 15 year tax holiday in 2012, the Company recorded a provision for Income Tax on the basis of 2% of revenue amounting to Rs277Mn in Q4 2013 and Rs1.1Bn for FY 2013.

In December, Dialog secured the distinction of being appointed the first and only authorised Partner and Service Provider for Apple iPhone in Sri Lanka. Following the establishment of the partnership between Apple and Dialog, 4G compatible Apple iPhones can now be connected on 4G mode to Dialog’s 4G LTE network. Accordingly, Dialog’s 4G and 3G HSPA+ networks will provide Apple users with unparalleled connectivity and a superior smart phone experience.

Dialog Television (DTV), the Digital Pay Television business of the Dialog Group continued its positive growth momentum recording YTD revenue growth of 21% to reach Rs3.6Bn for FY 2013. DTV EBITDA was recorded at Rs662Mn for FY 2013, an improvement of 4% YTD underpinned by strong revenue growth. Net Profit for FY 2013 was recorded at negative Rs302Mn, compared to a Net Profit of Rs11Mn in FY 2012 mainly due to one-off impairment of assets relating to DVBT and DVBT CPEs. On excluding the alluded one-off impairment, NPAT was recorded at Rs28Mn. DTV’s Pay Tv Subscriber base increased by 26% YoY to be recorded at 332,000 as at the end of FY 2013.

Dialog Broadband Networks (DBN) featuring the Group’s Fixed Telecommunications and Broadband Business recorded revenue of Rs5.8Bn for FY 2013, representing a YTD increase of 15%. Revenue growth YTD was achieved in the main through the successful consolidation of  Suntel Ltd., supplemented by healthy growth in data and voice solutions revenues. EBITDA contracted by 12% on a YTD basis due to high network and other costs associated with fixed LTE deployment. DBN’s Net Loss for FY 2013 was recorded at Rs483Mn relative to the Net Loss of Rs120Mn in FY 2012. Negative NPAT performance is attributed to additional depreciation charges accruing from build out of the company’s Fixed 4G LTE network and the amortisation of spectrum license fees associated with Fixed 4G LTE spectrum assets.

Group capital expenditure for FY 2013 was recorded at Rs28.3Bn. Group capital expenditure for FY 2013 included strategic investments in spectrum assets featuring the acquisition of Spectrum for Mobile 4G-LTE services and the payment of spectrum re-farming fees to enable the conversion of Spectrum amalgamated through the acquisition of Sky TV for the purpose of providing fixed 4G-LTE services. Capital expenditure for FY 2013 additionally included investments made on account of Mobile license and 2G spectrum renewals. On the back of significantly higher capital expenditure, the Group recorded a negative Free Cash Flow of Rs8.4Bn for FY 2013. Notwithstanding the expansion of capital investments, the Dialog Group continues to exhibit a structurally robust balance sheet with the Group’s Net debt to EBITDA being maintained at a modest level of 1.29x as at end of FY 2013.

Sri Lanka stocks close down 0.4-pct

Feb 17, 2014 (LBO) – Sri Lanka stocks close 0.45 percent lower for the third straight day with diversified stocks losing ground, brokers said.

The Colombo benchmark All Share Price Index closed 27.28 points lower at 6,056.11, down 0.45 percent. The S&P SL20 closed 19.52 points lower at 3,306.24, down 0.59 percent.

Turnover was 613.42 million rupees, down from 665.01 million rupees last Thursday, with stocks of 126 firms closing in the red against 42 gainers.

Nations Trust Bank closed flat at 66.00 rupees with 198.00 million rupees of off market transactions contributing to 32 percent of the total turnover.

The aggregate value of all off market deals accounted for 36 percent of the daily market turnover.

Dankotuwa Porcelain closed 50 cents higher at 13.10 rupees, attracting most number of trades during the day.

Foreigners bought 138.32 million rupees worth shares while selling 283.04 million rupees of shares.

Cargills Ceylon closed 12.00 rupees lower at 135.00 rupees and JKH closed 2.10 rupees lower at 219.90 rupees, contributing most to the index drop.

JKH’s W0022 warrants closed 2.40 rupees lower at 60.60 rupees and its W0023 warrants closed 4.00 rupees lower at 62.00 rupees.

Ceylon Tobacco Company closed 10.00 rupees lower at 1,240.00 rupees and Aitken Spence closed 2.50 rupees lower at 100.10 rupees.

Commercial Bank closed 1.00 rupee lower at 117.00 rupees and NDB closed 2.30 rupees higher at 185.00 rupees.

SLT closed 50 cents higher at 43.00 rupees and Carson Cumberbatch ended flat at 350.00 rupees.

Distilleries closed 10 cents higher at 215.10 rupees and Bukit Darah ended 5.30 rupees lower at 595.00 rupees.

Nestle Lanka ended flat at 2,100.00 rupees.