Kandy Hotels profits dip

Kandy Hotels Co (1938) PLC, a member of the Galle Face Hotels Group and owners and Operators of 'Queens Hotel' and 'Hotel Suisse' in Kandy, have reported a 25% fall in group profits to Rs 86 million for the nine months to 31December 2013, despite revenue remaining largely unchanged at Rs 352 million.

The group incurred a joint venture loss of Rs 5 million during the period. The group has invested Rs 132 million in joint venture projects. The company had reduced its investments from 32 million to Rs 913,000 since the last audited balance sheet date on 31March.

The stated capital of the company is Rs 16,750,000. The number of shares representing the stated capital 577,500,000 ordinary shares and 50,000 fully paid 15% preference shares.

The land, buildings, plant & machinery, motor vehicles, equipment, swimming pool and furniture and fittings of Queen's Hotel and Hotel Suisse were revalued on 30 July 2008, giving a revaluation surplus of Rs 1,656 million. In 2011 the shares were sub divided with one share divided into 35 shares.

In 2013 a major refurbishment was undertaken, with 120 rooms to be built behind Hotel Suisse at an estimated cost of US$ 12 million in addition to Rs 1.5 billion on Queens Hotel and Hotel Suisse.

The main shareholder is the Ceylon Hotels Corporation which has a 76% stake. Ceylon Hotel Holdings hold 9.7%. The public holdings as at 31 December 2013 is 9.05%. Cyril Gardiner Ltd., holds 1.4%, while Director S. Gardiner has 87,500 shares. The shares traded between Rs 8.50 and Rs 7 during the last quarter.
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Brown’s revenue and profits fall

By J. Kurukulasuriya

Ceylon FT: Brown and Co PLC the diversified conglomerate in business since 1892, released its interim accounts for the quarter to 31 December 2013, showing a 153% fall in profit to Rs 281 million and a 20% fall in group revenue over the nine-month period.

Group revenues fell 20% to Rs 9,071 million, segment wise, trading activity contributed 66% to the group revenue, followed by plantations which contributed 24%. Investments, which had previously contributed 2% to revenue, fell to around one fifth of 1%. Trading activity was also the most profitable sector. Tourism income was virtually unchanged.

"Other income" showed a 461% increase due to disposal of Brown's shares in Hatton National Bank.

The net gain from this transaction was Rs 1,097 million. Net finance costs showed a marked rise of 54% to Rs 740 million.

A Rs 652 million gain was recognized during the period due to the acquisition of shares by Brown and Co PLC, in SFLS Services Private Ltd., a subsidiary, and this also contributed to 'other income'.

The group disposed its entire shareholding in Royal Fernwood Porcelain Ltd., for Rs 300 million, a gain of Rs 34.1 million.

After the balance sheet date of 31 December, Browns Investments PLC a subsidiary company acquired a holding in Tabrobane Holdings PLC for Rs 190 million on 23 January 2014, bringing its total stake to 20%.

The conglomerate is engaged in several business activities ranging from manufacturing, trading and services, to distribution and is a major supplier of farm machinery and equipment, a distributor of automotive batteries, importer and distributor of hardware, office equipment and veterinary products, plantations, travel and tours and is one of the oldest companies on the Colombo Stock Exchange. The stated capital of the group is Rs 2,005 million, consisting of 70, 875,000 ordinary shares, with the public holding 52%. The share price fluctuated between a high of Rs 99.80 and low of Rs 78.20 during the quarter.

Major shareholders of the company are Engineering Services Pvt Ltd., with 23%, Mason's Mixtures Ltd., with 19%, the Employees' Provident Fund with 10% and Director Shanker V. Somasunderam with 4.4%. The National Savings bank holds 1 million shares.
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CDB 9-month pre-tax profit up 16%

As per interim results released to the Colombo Stock Exchange (CSE), CDB recorded an impressive balance sheet size of Rs. 31.6 billion as at 31 December 2013 reflecting a growth of 29% from the last audited balance sheet date of 31 March 2013. 

The pre-tax profits for the nine months stood at Rs. 541 million, a growth of 16% while after-tax profits grew to Rs. 429 million, reflecting growth of 12% in the backdrop of substantially higher impairment charges and income tax expenses. Total comprehensive income for the period was Rs. 621 million.

During the nine months, overall revenue grew to Rs. 4.5 billion, a remarkable growth of 47% in comparison to the corresponding previous period. Net interest income was Rs. 1.7 billion, a healthy growth of 35%.

This underlying momentum has been fuelled by a deposit portfolio growth of 27% or Rs. 22.5 billion while the loan book grew by 25% standing at Rs. 24.4 billion. EPS recorded a figure of Rs.7.90 for the nine months whilst book value per share stood at Rs. 64 as at 31 December 2013.

CDB’s Managing Director/CEO Mahesh Nanayakkara said: “It is certainly another milestone for CDB to surpass the 30 billion mark in total assets and this provides us further capacity to serve our customers as one of the strongest leading financial institutions in the country. Our network of 59 online connected outlets coupled with the accessibility to the single largest ATM network of Commercial Bank of Ceylon has strengthened our client reach and convenience. We are thankful to our customers and business partners for their patronage which enabled us to achieve this milestone.”

Recently CDB received a tremendous boost when it successfully completed its first listed debenture issue of  Rs. 1, billion which was oversubscribed on the opening day. Managed by CDB’s Corporate Finance Division, the issue strengthens the Tier 2 capital base of the company, helping to maintain a healthy capital adequacy ratio.

“It is certainly another milestone for CDB to surpass the 30 billion mark in total assets and this provides us further capacity to serve our customers as one of the strongest leading financial institutions in the country – CDB Managing Director/CEO Mahesh Nanayakkara”

CDB also received accolades for being the first and only NBFI to implement a core bank solution. This comprehensive product with multi-currency, multi-branch and multi-banking capabilities enables CDB to provide enhanced client service standards covering deposits and lending with faster and efficient processes such as online credit approvals, faster deposit certificate delivery and the ability to withdraw interest payments even on holidays.

During the period under review CDB opened 16 new outlets and obtained its first foreign funding line US$ 6mn from a multilateral agency from Belgium Investment organisation based in Brussels.

With its strong distribution network, state-of-the-art IT platform, brand franchise, unparallel customer service standards coupled with a committed team across the organisation, CDB is well positioned and poised to exploit full potential of the country’s accelerated economic development and to contribute towards inclusive economic growth.
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Sri Lankan bourse at 6-wk low; falls below key barrier

Feb 19 (Reuters) - Sri Lankan shares fell for a fifth straight session on Wednesday to a six-week low, breaching the psychological 6,000-point mark as foreign investors dumped the island nation's risky assets.

The main stock index ended down 0.59 percent, or 35.42 points, at 5,986.24, its lowest close since Jan. 7. It has dropped 4.19 percent in the last 11 sessions.

Foreign investors sold a net 59.7 million rupees ($456,200) worth of shares on Wednesday, extending outflows to 4.87 billion rupees in the past eight sessions as some offshore funds exited the market.

The bourse has seen 3.54 billion rupees of foreign outflows so far in 2014, after enjoying net inflows of 22.88 billion rupees last year.

Analysts said investors were concerned over possible further foreign 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 while 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.

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.

Top conglomerate John Keells Holdings Plc lost 1.56 percent to close at 215.00 rupees, pulling the overall index down.

Shares of market heavyweight Ceylon Tobacco Co Plc fell 0.90 percent to 1,198.80 rupees.

The index is still 1.24 percent up so far this year, following a 4.8 percent gain in 2013.

The day's turnover was 714.6 million rupees, less than this year's daily average of about 1.2 billion rupees. 

($1 = 130.8500 Sri Lanka rupees) 

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

Sri Lanka shares close down 0.5-pct

Feb 19, 2014 (LBO) – Sri Lanka stocks close down 0.59 percent retreating for the fifth consecutive day with losses in the index heavy tobacco and diversified stocks, brokers said.

The Colombo benchmark All Share Price Index closed 35.42 points lower at 5,986.24, down 0.59 percent. The S&P SL20 closed 6.27 points lower at 3,281.77, down 0.19 percent.

Turnover was 714.64 million rupees, up from 604.12 million rupees a day earlier, with stocks of 124 firms closing in the red against 58 gainers.

JKH topped the turnover contribution with 271.56 million rupees of market transactions contributing to 38 percent of the daily turnover.

PC House closed 20 cents lower at 30 cents, attracting most number of trades during the day.

Foreigners bought 302.35 million rupees worth shares while selling 104.54 million rupees of shares.

JKH closed 3.40 rupees lower at 215.00 rupees and Ceylon Tobacco Company closed 10.90 rupees lower at 1,198.80 rupees, contributing most to the index drop.

JKH’s W0022 warrants closed 1.00 rupee lower at 59.00 rupees and its W0023 warrants closed 70 cents lower at 60.00 rupees.

SLT closed 1.10 rupees lower at 41.70 rupees and Dialog closed 10 cents lower at 9.10 rupees.

Commercial Leasing and Finance closed 30 cents lower at 3.90 rupees and Bukit Darah ended 1.80 rupees lower at 590.50 rupees.

Commercial Bank closed 1.50 rupees higher at 118.00 rupees and Sampath Bank closed 5.00 rupees higher at 170.00 rupees.

Nestle Lanka ended 19.60 rupees higher at 2,119.60 rupees and Cargills Ceylon closed 4.00 rupees higher at 139.00 rupees.

Ceylinco Insurance closed 28.50 rupees higher at 1,374.50 rupees and Aitken Spence closed 1.00 rupee lower at 100.00 rupees.

Distilleries closed 60 cents lower at 207.40 rupees and Carson Cumberbatch ended flat at 350.00 rupees.

Sri Lanka Treasuries yields ease

Feb 19, 2014 (LBO) - Sri Lanka's Treasuries yields edged lower across maturities at Wednesday's auction with the 12 month yield down 02 basis points to 6.75 percent, the state debt office said.

The 6-month yield was also down 02 basis points to 6.90 percent and the 12-month yield was down 02 basis points to 7.08 percent.

The debt office said it accepted 3.0 billion rupees in 3-month bills, 5.3 billion rupees in 6-month bills and 10.4 billion rupees in 12-month bills.

Sri Lanka cabinet approves integrated resort investments

Feb 19, 2014 (LBO) - Sri Lanka's cabinet of ministers had approved investment concessions for three integrated resort projects which appear to limit income tax cuts to gaming, according to public notices published.

Government gazette notices for Lake Leisure Holdings (Private) Limited (connected to Australia's James Packer), Waterfront Properties (Private) Limited. (connected to John Keells Holdings) and The Queensbury Leisure Limited connected to entrepreneur Dhammika Perera said corporate income tax holidays and import duty concessions on materials have been approved.

The concessions when first published ran into a controversy as all resorts are also expected to have gaming operations.

The gazette said the resorts will have rooms, shopping malls, residences, office spaces and "associated facilities".

The revised tax concessions contained no specific references to gaming, and contained wording that appeared to exclude a corporate income tax holidays for revenue profits from gaming, other than rental income.

No limits have been place on rents.

The gazette notice said "activities of the Project including sale, lease, rent proceeds of apartments, office and services space, room charges and rental income from all tenants," will get a 12 or 15 year tax holiday.

The notice also said that in due to exemptions already granted to the projects " no tenant or any other party associating with the project or the project company will be granted any exemptions or concessions under this Act, in view of or consequent to such association."

Under Sri Lanka's Strategic Development Act, sweeping tax concessions to large projects have to be published for public comment, in a bid to limit revenue erosion.

The concession are then approved by the cabinet and tabled in parliament.

The tax concession for gaming ran into controversy, with opposition legislator Harsha de Silva in particular taking up the case and the three projects are now going though the process for a second time.

But Sri Lanka's parliament had already lifted value added tax from gaming and limited gaming revenue based taxes to only 5.0 percent, before the projects were approved.

Legislator Harsha de Silva also opposed the bill at the time, saying taxes on gaming revenues ranged close to 20 percent where income tax was also charged (as in Singapore) or 60 percent where there was no corporate income tax.