Adams Investments mandatory offer to PCH Holdings suspended

The mandatory offer made to PCH Holdings PLC by Adams Investments Limited has been suspended following a letter by the Securities and Exchange Commission of Sri Lanka (SEC).

The suspension will be in force till the final court determination of the case.

On 14 August, after considering all the facts court allowed Adams Investments Limited to suspend or freeze the mandatory offer made to take over PCH Holdings PLC till the final determination of court on the ownership of Bieco Link Carbons Private Limited is made known.
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SLT 1st half Group net profits up by 28% to Rs. 3 bn.

Sri Lanka Telecom PLC (SLT) released its company and group financial results for the 1st six months of the year 2014. The Group comprises the holding company SLT and its 07 subsidiaries including the mobile arm Mobitel (Pvt.) Ltd.

The group recorded Rs.31.39bn revenue during the 1st six months of the year with 8% growth compared to the same period of the previous year. All the operational segments of the group have contributed to this growth; i.e. Fixed Telephony, Mobile and Others. The group operating cost was managed at Rs. 21.86 bn despite a charge of Rs.673 mn to the operating cost, resulting from an out of court settlement of a civil case on the import of the IPTV system in 2007/08. Several initiatives were taken within the Group including the inculcating of a cost saving culture that has resulted in keeping operational costs at a tolerable level year on year (YoY) with an increase of 7%. The Group EBITDA increased to Rs. 9.53 bn with YoY9% growth, recording an EBIDTA margin of 30%. Group Profit Before Tax grew by 25% YoY to Rs. 4.04 bn. Foreign exchange gain of Rs. 99 mn during the period under review, compared to Rs. 382 mn foreign exchange loss incurred during the corresponding period of the previous year coupled with EBITDA growth has largely impacted this growth. The group reported Rs. 2.96 bn Net Profit After Tax during the 1st six months of the year with 28% growth compared to the 1st six months of the last year.

The group recorded impressive Profit After Tax of Rs.2.42 bn. during the 2nd Quarter alone gaining YoY growth of 234%. The growth was largely driven by YoY 30% EBITDA growth, TDC refund of Rs. 699 mn and foreign exchange gain of Rs. 78mn against Rs. 421 mn loss in the 2nd Quarter of the previous year.

SLT, the holding company recorded Rs. 19.05 bn revenue during the 1st half of 2014 compared to 1st half 2013 with 8% YoY growth. Operating costs increased by 11% YoY to Rs. 14.31 bn. The cost incurred by the out of court settlement stated above has largely impacted this cost increase. The company EBITDA reached Rs. 4.73 bn during the 1st six months of the year with a marginal growth compared to the corresponding period of the previous year. The company EBITDA margin was reported at 25%. During the period under review, the company recorded Profit Before Tax and Profit After Tax of Rs. 2.0 bn and Rs. 1.3 bn respectively, with 2% growth and 4% drop respectively, compared to the same period of the previous year.

Mobitel (Pvt) Ltd., the mobile arm of the group continued to grow its revenue despite the intensifying competitive position in the industry. Company Revenue for the first half of 2014 was recorded at Rs14.7 bn, up by 10% compared to the corresponding period in 2013. Revenue performance in Q2-2014 also grew by 3% over Q1-2014 indicating a steady growth QoQ. Revenue growth can be attributed to a continued growth in subscriber base as well as in the data business.

Reflecting the growth in revenue, operating profitability of the company improved compared to H1-2013 while quarterly growth is also encouraging. Company EBITDA and EBIT for the H1-2014 grew by 10% and 7% respectively over the corresponding period of 2013 whilst growth achieved in Q2-2014 was 9% and 22% respectively compared to Q1-2014.

The growth in NPAT during H1-2014 is appreciable compared to corresponding period of last year. This is attributable to the growth in EBITDA and EBIT as well as stable macro conditions compared to the first half of last year. Even though Q2-2013 operating performance shows an improvement over Q1-2013, the depreciation of the rupee by 2.5% during the latter part of the second quarter had an adverse impact on NPAT compared to the preceding quarter.
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Sri Lanka stocks slip from near 3-year high on profit-taking

(Reuters) - Sri Lankan stocks fell on Friday to end an eight-session winning streak as investors took profits in shares of large-caps, while foreigners also sold in an overbought market.

The main stock index finished lower 0.42 percent, or 29.24 points, at 6,943.85, edging down from its highest close in nearly three years hit on Thursday.

The index has gained 17.4 percent so far this year.

"It's a bit of profit-taking in blue-chips and a correction, since the market is struggling to pass the 7,000 mark we will see selling pressure for a while," said Dimantha Mathew, manager, Research, at First Capital Equities (Pvt) Ltd.

The bourse saw net foreign outflows of 893.8 million rupees ($6.9 million) on Friday, but foreign investors have been net buyers of 11.78 billion rupees worth of shares so far this year.

Turnover, boosted by block deals in John Keells Holdings Plc , hit 2.94 billion rupees, more than double this year's daily average of 1.13 billion rupees.

Conglomerate John Keells, which accounted for 59.8 percent of the day's turnover and saw 4.4 million shares being sold by foreigners, fell 0.38 percent to 238 rupees a share.

Earlier in the day, the central bank held key policy rates at multi-year lows for the seventh straight month.

Union Bank of Colombo Plc fell 9.87 percent to 21 rupees a day after the bank said it had agreed to sell a 70 percent stake to a subsidiary of TPG Capital Management LP for $117 million.

Ceylon Tobacco Co Plc, which led the fall in the overall index, fell 0.91 percent to 1,184.90 rupees, while Carson Cumberbatch Plc fell 1.04 percent to 455 rupees. 

(1 US dollar = 130.1000 Sri Lankan rupee) 

(Reporting by Ranga Sirilal and Shihar Aneez)

Sri Lanka Commercial Credit profits up 184 pct

Aug 15, 2014 (LBO) – Sri Lanka’s Commercial Credit and Finance said profits in the first quarter ending June up 184 percent to 490 million rupees, benefiting from the results earn by the company in financial year ended 31 March 2014.

“The last financial year was a significant milestone in our calendar and we are building on that momentum this year as well”, Roshan Egodage, Chief Executive of Commercial Credit was quoted in a media release by the company.

“We have strived to build positive relationships with the local community around each location we operate in, building a greater level of trust and respect for each other,”

“We have to build on these relationships further to sustain the momentum through the year and into the next.”

The company recorded a profit of one billion rupees in March.

Net interest income rose 86 percent in the quarter to 1,652 million rupees this year.

Total operating income grew to 1,760 million rupees from 974 million rupees while total assets rose to 35,866 million compared to 19,859 million rupees a year earlier.

Sri Lanka stocks close down 0.4-pct

Aug 15, 2014 (LBO) - Sri Lanka's stocks closed 0.42 percent lower on Friday with tobacco stocks losing ground amid strong foreign selling, brokers said.

The Colombo benchmark All Share Price Index closed 29.24 points lower at 6,943.85, down 0.42percent. The S&P SL20 closed 7.79 points lower at 3,820.98, down 0.20 percent.

Turnover was 2.93 billion rupees, up from 2.01 billion rupees a day earlier with 59 stocks closed positive against 154 negative.

John Keells Holdings closed 90 cents lower at 238.00 rupees with eleven off-market transactions of 1.75 billion rupees changing hands at 235.00 rupees per share contributing 60 percent of the daily turnover.

JKH’s W0022 warrants closed 80 cents lower at 70.20 rupees and its W0023 warrants closed 3.10 rupees lower at 76.90 rupees.

The aggregate value of all off-the-floor deals represented 69 percent of the turnover.

Union Bank of Colombo closed 2.30 rupees lower at 21.00 rupees, attracting most number of trades during the day.

Foreign investors bought 694.60 million rupees worth shares while selling 1.59 billion rupees worth shares.

Ceylon Tobacco Company closed 10.90 rupees lower at 1,184.90 rupees, contributing most to the index drop.

Ceylon Beverage Holdings closed 89.50 rupees higher at 800.00 rupees.

Sri Lanka maintains policy rates, as economic growth likely to remain on target in 2014

Aug 15, Colombo: Sri Lanka's Central Bank has decided to maintain current policy interest rates as low inflation environment continued and the real economic growth is likely to remain approximately on target in 2014.

Accordingly, the Standing Deposit Facility Rate (Repurchase Rate) would remain at 6.50 percent while the Standing Lending Facility Rate (Reverse repurchase Rate) remains at 8.50 percent, the Central Bank announced Friday.

Inflation continued to remain in low single digit levels, although it increased to 3.6 percent on a year-on-year basis in July 2014 from 2.8 percent in the previous month reflecting higher prices of certain food items caused by adverse weather conditions.

However, the Central Bank says the outlook for inflation remains benign although supply disturbances triggered by adverse weather conditions could cause temporary price fluctuations.

Market interest rates have continued to adjust downwards in response to monetary policy measures taken by the Central Bank in the recent past.

The monetary authority said the external sector strengthened further in recent months supported by timely and appropriate policies of the Central Bank and the Government.

Favorable developments in exports observed from June 2013 are expected to continue during the remainder of 2014.

Higher inflows from workers' remittances and from tourism along with the lower trade deficit have positively impacted the external current account and led the country's gross official reserves to surpass the historic milestone of US$ 9 billion, and currently standing at around US$ 9.2 billion, the Central Bank said.

In the meantime, the Central Bank has purchased over US$ 1 billion from the domestic foreign exchange market on a net basis so far during the year.Aug 15, Colombo: Sri Lanka's Central Bank has decided to maintain current policy interest rates as low inflation environment continued and the real economic growth is likely to remain approximately on target in 2014.

Accordingly, the Standing Deposit Facility Rate (Repurchase Rate) would remain at 6.50 percent while the Standing Lending Facility Rate (Reverse repurchase Rate) remains at 8.50 percent, the Central Bank announced Friday.

Inflation continued to remain in low single digit levels, although it increased to 3.6 percent on a year-on-year basis in July 2014 from 2.8 percent in the previous month reflecting higher prices of certain food items caused by adverse weather conditions.

However, the Central Bank says the outlook for inflation remains benign although supply disturbances triggered by adverse weather conditions could cause temporary price fluctuations.

Market interest rates have continued to adjust downwards in response to monetary policy measures taken by the Central Bank in the recent past.

The monetary authority said the external sector strengthened further in recent months supported by timely and appropriate policies of the Central Bank and the Government.

Favorable developments in exports observed from June 2013 are expected to continue during the remainder of 2014.

Higher inflows from workers' remittances and from tourism along with the lower trade deficit have positively impacted the external current account and led the country's gross official reserves to surpass the historic milestone of US$ 9 billion, and currently standing at around US$ 9.2 billion, the Central Bank said.

In the meantime, the Central Bank has purchased over US$ 1 billion from the domestic foreign exchange market on a net basis so far during the year.

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Richard Pieris ups PAT by 106% in Q1 of 2014/2015

The Richard Pieris Group ended its first quarter on a strong note reporting a growth of 106% in its net profit when compared to the corresponding period of the previous year. The three months ended June 30, 2014 evidenced a steady performance in all its major sectors with a reported quarterly turnover of Rs.8.8bn, which is a 7% growth over and above last year. The reported profits represent business profits, and do not include any gains of a capital nature.

The Retail Sector of the Group comprises of Arpico Super centres and the network of Arpico outlets scattered islandwide. The sector had a dynamic first quarter as usual and the main focal point was the opening of its 16th large format retail outlet in Panadura.

The Plastics and Distribution Sector gained momentum during the period ended June 30, 2014 after a very quiet 2013/14. Several process improvements were made in the Furniture manufacturing business where the product quality and portfolio have been further enhanced. Several marketing activities were carried out to boost mattress sales which has yielded better margins and sales growth. During the period under review there was a significant increase in the sales volumes of water tanks and the sector also introduced Hybrid Water tanks into the market. The sales of rigifoam was adversely affected due to adverse weather conditions.

The Plantation Sector of the Group experienced a successful first quarter with a significant increase in operating profits.

The Richard Pieris Group owns three of the largest plantation companies in the country with diverse crops which includes high grown, mid grown and low grown tea, rubber, oil palm, coconut, cinnamon, cardamom, rambuttan and other crops contributing to more than 20% of Group turnover.

During the period under review the tyre sector continued to benefit from favourable raw material prices and savings in energy sources which were introduced last year which resulted in an overall increase in terms of profitability. Products introduced towards the latter part of the last financial year was gaining market acceptance and during the period under review Richard Pieris Tyre Company introduced a new tyre "Hida" which was targeted towards the mini trucks.

The Rubber Manufacturing Sector continued to prosper during the first quarter of 2014/15 in the back drop of a very successful 2013/14. The latex foam business continued to thrive and managed to reduce its debt levels during the quarter through improvements in working capital management.
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