Sri Lanka's Agalawatte Plantations returns to profit

ECONOMYNEXT – Sri Lanka’s Agalawatte Plantations, which is carrying heavy losses with the former management accused of mismanagement, returned to profit in the September 2017 quarter.

The firm made a net profit of Rs42 million in the September 2017, the latest for which accounts are available, compared with a loss of Rs128 million the year before, according to interim results filed with the stock exchange.

Sales rose 52% to Rs523 million over the period. Quarterly earnings per share were Rs1.66. Agalawatte’s share was trading at Rs19.70 Wednesday.

In the nine months to 30 September 2017, Agalawatte made a loss per share of 89 cents while Sales rose 43% to Rs1.5 billion.

The accounts showed Agalawatte’s tea and rubber businesses continued to make losses while profits came mainly from oil palm.

Agalawatte Plantations owns part of AEN Palm Oil Processing (Private) Limited, a joint venture processing and selling palm oil.

Last year, D R Investment (Pvt) Ltd., the new owners of Agalawatte Plantations said re-audited accounts of the firm had revealed over Rs4.5 billion accumulated losses and liabilities and promised legal action against those responsible for mismanagement.

In March 2017, Browns Group sold a 61% stake in Agalawatte Plantations to D. R. Investment (Pvt) Ltd.

Browns’ controversial acquisition of the loss-making Agalawatte from Mackwoods group has been challenged in court.

Sri Lanka Treasuries yields spike across maturities

ECONOMYNEXT - Sri Lanka's Treasuries yields rose across maturities at Wednesday's auction with the 12-month bill yield up 34 basis points to 9.28 percent, the state debt office said.

The 6-month bill yield rose 30 basis points to 8.29 percent while the 3-month bill yield rose 27 basis points to 8.02 percent from the last auction, a statement said.

The debt office accepted Rs28.5 billion worth of bids, the same amount offered, after getting total bids worth Rs51.7 billion

It sold Rs10 billion rupees of 3-month bills, having offered Rs4 billion and getting bids worth Rs13 billion while accepting lower amounts than offered in the other tenors.

Sri Lanka's BAT unit net up 125-pct in Dec, cigarette volumes down

ECONOMYNEXT - Profits of Ceylon Tobacco Company Plc, a unit of British American Tobacco, more than doubled to 4.5 billion rupees in the December 2017 quarter, from a year earlier despite shrinking cigarette sales, interim accounts showed.

The company said cigarette volumes fell 18 percent during 2017 after price hikes. But turnover tax revenues rose to 107.3 billion rupees from 89.77 billion rupees a year earlier up 19.5 percent. Sri Lanka charges excise, and other levies including a 15 percent value added tax.

The company and its customers coughed up a total of 117.3 billion rupees in taxes to the state, which includes income tax in 2017.

CTC reported earnings of 24.01 rupees a share for the quarter. In the 12 months to December, earnings were 77.87 rupees a share on total profits of 14.6 billion rupees, increasing 15 percent from a year earlier, interim accounts showed.

Sales volumes fell 18 percent during the year on lower disposable incomes and taxes on cigarettes, the company said.

Ceylon Tobacco shares closed Wednesday at 1,049.50 rupees.

Revenue with taxes in the quarter increased 60 percent to 35.6 billion rupees.

The total tax collection on cigarettes amounted to 27.5 billion rupees in the quarter, up 86 percent from a year earlier.

Operating expenses tumbled 65 percent in the quarter to 1.2 billion rupees.

Raw materials cost was down to 246 million rupees from 349 million amid lower volumes, salaries and wages were down to 449 million from 549 million, and other operating expenses were down to 1.2 billion rupees from 3.4 billion.

The company said high domestic prices maintained with taxes were promoting cigarette smuggling.

"The smuggled cigarette market is estimated to be over 450 sticks," the company claimed. It did not say how the estimate had been arrived at.

Over 2,500 raids by authorities had detected 50 million cigarettes in 2017, it said.

Sri Lanka’s RIL Property goes for Rs.1.6Bn Rights Issue

LBO - RIL Property Plc said they will be raising 1.6 billion rupees through one for three Rights Issues to settle part of the long-term loan facilities obtained by the company.

Issuing a statement the company said that the it will issue 200 million shares in the proportion of one new ordinary voting share for every three ordinary shares held at 8 rupees per share.

The current stated capital of the company is 5.76 billion rupees.

The Rights Issue is subject to the Colombo Stock Exchange approving in principle the issue and listing of shares and obtaining shareholder approval at a General Meeting.

Sri Lankan stocks fall on political uncertainty after local polls

Reuters: Sri Lankan shares fell for a second straight session on Wednesday as political uncertainty after a defeat of the two ruling coalition parties in a local poll hurt investor sentiment.

The ruling coalition government of President Maithripala Sirisena’s centre-left Sri Lanka Freedom Party and Prime Minister Ranil Wickremesinghe’s centre-right United National Party suffered defeats in a local election over the weekend.

The results also raised concerns over the future of the unity government amid pressure from the opposition parties to dissolve the parliament.

The two ruling parties have set up a committee on Tuesday to examine the future of the unity government.

The Colombo stock index ended 0.16 percent lower at 6,532.26, further slipping from its highest close since Nov. 8 hit on Friday.

The index gained 0.8 percent last week, its third straight weekly rise.

Shares in Bukit Dhara Plc fell 7.6 percent while Hemas Holdings Plc fell 0.3 percent and Hatton National Bank Plc ended 1.6 percent weaker. Biggest listed lender, Commercial bank of Ceylon Plc, lost 1.8 percent.

“The market is negative with the continued political uncertainty,” said Dimantha Mathew, head of research at First Capital Holdings.

“Delay in settlement is creating more uncertainty,” he said, referring to a decision that could end the political instability.

Investors are waiting for some stability and to see the direction in which both the coalition partners are headed.


Turnover stood at 654.7 million rupees ($4.22 million), well below last year’s daily average of 915.3 million rupees.

Foreign investors, however, bought a net 97.2 million rupees worth of shares on Wednesday, extending the year-to-date net foreign inflow to 5.4 billion rupees worth of equities.

Analysts also said the investors were waiting to see the central bank’s key policy rate announcement on Thursday, which is widely expected to remain unchanged.

($1 = 155.3000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

Sri Lanka’s Aitken Spence Hotel December profit down 29-pct

ECONOMYNEXT – Sri Lanka’s Aitken Spence Hotel Holdings reported net profit fell 29% to Rs288 million in the December 2017 quarter from a year ago largely owing to losses in associate firms and higher tax expenses.

Group sales rose 4.7% to Rs4.5 billion over the period, according to interim accounts filed with the stock exchange.

Earnings per share were 85 cents for the December quarter, part of the peak tourism season. The share was last traded at Rs29.70 Monday.

December quarter tax costs rose 123% to Rs125 million from a year ago.

In the nine months to 31 December 2017, part of which is the off-season for tourism, EPS was 49 cents on net profit of Rs173 million with sales up 13.7% to Rs11.6 billion.

A segmental analysis showed that sales increased in both its resorts in Sri Lanka and abroad, classified as South Asia and the Middle East with Sri Lankan hotels returning to profit from losses the previous year while profits fell in overseas hotels.

Sri Lanka's Hayleys profits plunge 67-pct in Dec quarter

ECONOMYNEXT - Profits at Sri Lanka's diversified Hayleys Plc fell 67 percent to 178 million rupees in the December 2017 quarter from a year earlier, on soaring borrowing costs, while increasing raw material prices and adverse weather hit manufacturing and agriculture margins interim accounts showed.

Earnings were 2.37 rupees a share in the quarter. In the nine months to December, earnings were 2.62 rupees a share on a total profit of 196.6 million rupees, down 87 percent from a year earlier, interim accounts filed with the stock exchange showed.

Hayleys closed at 235 rupees on Monday.

"It has been a challenging nine months for the Hayleys Group despite revenue growth in all our diverse business segments," Chairman Mohan Pandithage told shareholders.

Revenue in the quarter grew 66 percent to 49.9 billion rupees, cost of sales increased 65 percent to 38.2 billion rupees, expanding gross profits by 67 percent to 11.4 billion rupees.

Net finance costs doubled to 1.9 billion rupees in the quarter.

The group's borrowings were 34.6 billion rupees end December 2016, nearly twice as much from a year earlier.

Pandithage promised measures to "realign the financial position" and boost profits.

He said the March quarter is usually the strongest for the group.

In the nine months to December, revenue from consumer products grew four-fold to 19.9 billion rupees, profits surged ten-fold to 965.7 million rupees mostly after the group bought electronics retailer Singer Sri Lanka in September 2017.

Revenues from rubber gloves grew 11 percent to 12 billion rupees, but profits fell due to rising raw material costs, the company said.

Logistics revenue grew 44 percent to 25.8 billion rupees and profits grew 69 percent to 1.9 billion rupees.

Activated carbon revenues grew 14.9 percent to 10.8 billion rupees with profits falling 22.6 percent to 700 million rupees.

Agriculture revenue fell 6.6 percent to 10.1 billion rupees and profits declined 38 percent to 735.7 rupees.

Revenue from plantations grew 35 percent to 9.3 billion rupees. The segment reported profit of 465 million rupees, compared to a loss of 281 rupees a year earlier.

Power generation revenues grew 51 percent to 1.2 billion rupees and profits grew 49 percent to 771.6 million rupees.

Revenue from hotels grew 1.3 percent to 4 billion rupees, but profits fell 71 percent to 150 million rupees.