HNB Assurance records excellent growth in Q1, 2014: Highest ever GWP in Q1

HNB Assurance PLC lived up to its reputation as the fastest growing insurer in Sri Lanka by recording a growth of 24% in its turnover measured by Gross Written Premium in the quarter ended 31st March 2014. Its Life Insurance GWP grew by 34% outpacing the Life Insurance market which grew by only about 10% in the first quarter of 2014. The Company’s achievement in the General Insurance sector was equally impressive as it recorded a growth of 16% while the General Insurance market recorded a decline by about 1%.

The combined GWP of Rs. 1.14 Billion achieved in the quarter turned out to be the highest ever recorded by the Company in a single quarter. The combined GWP achievement of Rs. 538.3 Million in the month of March also established a new record as the highest ever GWP recorded in a month.

According to Manjula de Silva, Managing Director of HNB Assurance, "this outstanding achievement is attributed to the renewed focus and energy with which the two recently segregated Life and General distribution teams commenced their operations". He is hopeful that the momentum built during the first quarter will be carried through during the entire year enabling the Company to end its last year as a composite Company on a high note.

The Company was also able to deliver an 8% growth in its Profit After Tax. The profit declared for the period of Rs. 53.9 Million is derived entirely from the General Insurance business as the Company recognizes a profit from Life Insurance only after the year – end actuarial valuation is completed.

HNB Assurance PLC is one of the fastest growing Insurance Companies in Sri Lanka with a network of 51 branches. HNBA is a composite Insurance company with a rating of A (lka) by Fitch Rating Lanka for "National Insurer Financial Strength Rating" and "National Long- term Rating". HNBA is also rated within the Top 100 Brands and Top 100 companies in Sri Lanka by LMD and HNB Assurance recently won International awards for Brand Excellence and HR Excellence and also won many awards for its Annual Reports at the Award ceremonies organized by the Institute of Chartered Accountants of Sri Lanka, ACCA Sri Lanka (Association of the Chartered Certified Accountants) and SAFA (South Asian Federation of Accountants)
www.island.lk

John Keells Holdings' 'Cinnamon Red' business hotel on track

May 31, 2014 (LBO) - John Keells Holdings said its 'Cinnamon Red' business hotel in Sri Lanka's capital Colombo will open during the current financial year.

The 240-room building is now under construction and will be managed by the group.

JKH told shareholders in the annual report that all its hotels will be branded 'Cinnamon' during this year.

Cinnamon Hotels and Resorts will then have 14 hotel properties and over 2,400 rooms.

Sri Lanka has reported arrivals of 1.27 million in 2013 up 26 percent from a year earlier. Arrivals were also up 24 percent to 421,000 in the first quarter. 

JKH which also has resorts in the Maldives, said occupancy there was also higher with a 17 percent gain in arrivals.

Nestle Lanka to invest Rs 1 bn billion for Pannala factory expansion

H.D.H Senewiratne

Sri Lankan's one of the leading food and beverage multinational giants Nestle Lanka Plc will invest more than Rs one billion for the Pannala factory expansion and brand building activities this year to increase its brand equity in the market, its Managing Director Ganesan Ampalavanar said.

"At present our company produces several food and beverages for the local market and most or our products are enjoying the market leader position in Sri Lanka, Ampalavanar told the Daily News Business. He said so at the launching of Maggi Noodles re-launch ceremony where it has introduce two flavor namely curry and chicken fortified with Vitamin A.

He said that the some of their brands like Milo Milk products, Nestle condense milk, Maggi noodles, coconut milk power and several other brands enjoy the market leader position. With these developments the company is now in the process of investing in heavily on the factory expansion and brand build activities in Sri Lanka, Ampalavanar said.

"The direction of the Nestle the world over is towards nutrition, health and wellness. We are using our food and beverage to bring about nutritional benefits to our consumers, in addition to fortifying our products with essential micro nutrients and other nutritional advantages for our consumers," he said.

He also said that the company is also constantly improving the nutritional profile of their products by reducing public health sensitive nutrients and their Maggi product has continuously reduces saturated fat levels and also salt content through their world renowned research and developments, he said.

Nestle has supported the Sri Lankan dairy sector since the 1980s. "Today Nestle Lanka has three milk factories," Ampalavanar added. Nestle is Sri Lanka's single largest private sector collector of fresh milk, procuring fresh milk from over 15,000 local dairy farmers every day.

Over the years Nestle has invested to develop the area around that first factory, setting up milk collection points and training farmers to improve productivity and quality by supporting the national economy in a big way.
www.dailynews.lk

Distilleries net profits Rs 6.3B

Ceylon FT: Distilleries Company of Sri Lanka (DCSL) reported a net profit of Rs 6.32 billion for the year ended 31 March 2014, up 20.23% from a year ago, interim financial results showed.

Group revenue fell 2.10% to Rs 64.4 billion and gross profit rose 8.8% to Rs 14 billion.

Investment and other income fell 28.23% to Rs 1.26 billion, distribution expenses rose 2.80% to Rs 1.89 billion, administration expenses rose 8.69% to Rs 3.73 billion and other operating expenses fell 61.2% to Rs 353.67 million.

Finance costs fell 27.85% to Rs 1.2 billion and pre-tax profits grew 17.93% to Rs 9.53 billion. Earnings per share amounted to Rs 20.68, up from Rs 17.13 a year ago.
www.ceylontoday.lk

Hemas closes eventful year with 39% operating profit growth

Hemas Holdings yesterday posted consolidated net earnings of Rs. 2,409 m, a 45.2% year-on-year growth, and operating profits of Rs. 3,379 m, a growth of 38.6%, for the financial year 2013/14.

As per interim results released yesterday, for the year under review, operating profits were largely on account of strong performance of Healthcare, FMCG and Transportation sectors.

Operating profits were positively impacted by the capital gain and fair value gain relating to its Tangalle land, and negatively impacted by an impairment at its Heladhanavi thermal plant. After adjusting for these one-off items, Group operating profits still showed a healthy growth of 19.0%, stated Hemas Holdings Chairman Husein Esufally.

Esufally noted: “The year has been an eventful one with the acquisition of J.L. Morisons and the successful transition of new leadership. The year closed out with the company posting stellar results, and being well positioned for future growth.”

The FMCG business recorded revenue growth of 24.1% while its operating profits grew by 26.0%. During the year, the business re-launched many of its key brands accounting for 80% of its business revenue with significant enhancements to product quality.

Healthcare sector performance was boosted by its Pharmaceutical distribution business, which reinforced its market leading position, increasing its share of the private market to 21.0% (IMS). Revenues grew by 18.0%, despite sluggish industry growth which stood at 1.32% for 2013 (IMS).

The company strengthened its position in this space through the acquisition of a 90% stake in J.L. Morisons, which posted an earnings growth of 50.6% despite a 13.3% drop in top-line (due to the loss of two consumer distribution agencies).

Hemas Holdings’ third hospital at Thalawathugoda, a 55-bed multi-specialty facility, commenced operations in June 2013. After 10 months of operation, the build-up of patient volumes looks encouraging. Meanwhile, operations at its flagship Wattala Hospital continue to grow, with more high-end surgeries being performed.

After a relatively poor summer season, the Leisure industry enjoyed a strong winter season, and as a result, Hotels and Inbound Tours ended the financial year on a high note. Club Hotel Dolphin was refurbished at a cost of Rs. 488 m, which has significantly enhanced the appeal of the property – the main contributor in the Hotel portfolio.

The Transportation sector continued to generate strong growth within its portfolio during the year under review. The partnership with its maritime principals was further strengthened through the Joint Venture agreement to grow the feeder agency business in light of the expansion of the Port of Colombo. The Aviation segment continued to post a healthy performance.

The Power sector posted mixed results with an exceptional performance in the mini hydro segment during the early part of the financial year. “Overall results were significantly impacted by a Rs. 576 m impairment as we have estimated the recoverable value of the thermal assets to fall short of their carrying value,” Esufally stated.

During the early part of the year, Hemas acquired 29.3% of Panasian Power PLC, increasing its mini hydro portfolio to five operating plants with a total capacity of 11.4 MW.

Following a planned leadership transition, Steven Enderby was appointed Chief Executive Officer on 1 April 2014. “I am confident that Steven, along with the leadership team, will build on this strong foundation going forward,” added Esufally.
www.ft.lk

Odel reports Sales of Rs 4.6 billion in 2013-14

Odel PLC has posted sales of Rs 4.6 billion for 2013-14, a marginal 1.5 per cent growth over 2012-13.

Filing its income statements with the CSE, Sri Lanka’s premier fashion and lifestyle retailer reported operating profit of Rs 332 million for the 12 months ending 31st March 2014, an increase of 7.6 percent, with Other Income of Rs 225 million, principally from the investment of proceeds of the company’s December 2012 Rights Issue.

The Group said finance costs reduced by 25 per cent to Rs 120 million, enabling profit before tax of Rs 216.8 million, which was down 6 per cent over the previous year.

Net profit for the year was Rs 192.5 million, an improvement of 22 per cent.

In the year reviewed, the company opened three new stores -- a ‘Luv SL’ store at Negombo, an Odel store at K-Zone Ja-Ela and the largest ‘Luv SL’ store in the country inside the Galle Fort. The company also refurbished and upgraded its Nugegoda store and re-designed and re-launched its store at the Bandaranaike International Airport (BIA).

http://www.cse.lk/cmt/upload_report_file/960_1401445968175.pdf

Sri Lanka bourse slips to over 3-wk low on large-caps

May 30 (Reuters) - Sri Lankan stocks fell on Friday to a their lowest in more than three weeks led by large-cap shares, despite buying by foreign investors whose outlook on the risky assets remained positive due to lower interest rates.

The main stock index ended 0.64 percent, or 40.31 points, weaker at 6,263.46, it lowest close since May 7, and slipping from its highest close since May 20 hit on Thursday.

The bourse saw a net foreign inflow of 229.8 million rupees ($1.76 million) worth of shares on Friday, extending the year-to-date net foreign inflow to 2.5 billion rupees.

The day's turnover was at 1.08 billion rupees, as against this year's daily average of 1.01 billion rupees.

Stockbrokers expect the market to gain in the near future due to lower interest rates after the central bank kept key rates at multi-year lows on Tuesday for the fourth straight month, as expected.

Shares of Carson Cumberbatch fell 5.22 percent to 379.10 rupees a share, while Ceylon Tobacco Company PLC fell 0.59 percent to 1058.70 rupees.

($1 = 130.4000 Sri Lanka rupees) 

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

Sri Lanka stocks close down 0.6-pct

May 30, 2014 (LBO) - Sri Lanka's stocks closed down 0.64 percent on Friday with diversified, food and tobacco stocks losing ground despite net foreign buying, brokers said.

The Colombo benchmark All Share Price Index closed 40.31 points lower at 6,263.46 down 0.64 percent. The S&P SL20 closed 32.08 points lower at 3,454.61, down 0.92 percent.

Turnover was 1.08 billion rupees, up from 810.92 million rupees a day earlier with 91 stocks closed positive against 130 negative.

Cargills Ceylon closed 2.50 rupees lower at 142.50 rupees with four off-market transactions of 182.58 million rupees changing hands at the same price per share contributing 17 percent of the daily turnover.

The Finance Company closed 40 cents higher at 7.50 rupees and Entrust Securities closed 2.30 rupees higher at 22.70 rupees, attracting most number of trades during the day.

Foreign investors bought 760.16 million rupees worth shares while selling 530.39 million rupees worth shares.

Carson Cumberbatch closed 20.90 rupees lower at 379.10 rupees and Nestle Lanka closed 45.00 rupees lower at 1,910.00 rupees, contributing most to the index drop.

Bukit Darah closed 23.40 rupees lower at 662.90 rupees.

Lion Brewery Ceylon closed 18.00 rupees lower at 431.00 rupees and Ceylon Tobacco Company closed 6.30 rupees lower at 1,058.70 rupees.

CT Holdings closed 9.40 rupees lower at 130.60 rupees and John Keells Holdings closed flat at 234.00 rupees.

JKH’s W0022 warrants closed 1.40 rupees higher at 62.40 rupees and its W0023 warrants closed 3.70 rupees higher at 70.70 rupees.

John Keells Hotels closed 50 cents higher at 15.50 rupees and Asian Hotels and Properties closed 70 cents higher at 73.10 rupees.

Oil palm firms Selinsing closed 68.50 rupees higher at 1,668.50 rupees and Shalimar (Malay) closed 94.30 rupees higher at 1,695.30 rupees.

Commercial Leasing and Finance closed 10 cents higher at 4.00 rupees.

John Keells Hotels PBT increases by 48% to Rs. 1.89 Billion

MBSL income increases by 26% in 2013

Income growth of the Merchant Bank of Sri Lanka (MBSL) rose 26% in the year ending December 31, 2013 from Rs.1.87 billion to Rs.2.36 billion.

The significant growth during the year was attributed to an aggressive expansion drive initiated by MBSL over 2012/2013 and the dedication of its staff towards achieving predetermined goals said Mr. Shah, chairman of MBSL.

The expansion plan yielded highly positive results with 16 new customer touch points becoming profitable immediately.

A press release said : ‘Our objective was to reach a larger segment of society and widen our presence across the country. Although 30 branches & customer touch points may seem small in number, this initiative has successfully enhanced MBSL brand recognition and raised brand awareness across the country. In 2013, these 16 customer touch points generated an income of Rs. 334 million, which is 15% of the total income of the Company and made a net contribution of Rs. 12 million, giving plenty of hopes for a brighter future. 

Such a contribution by newly established customer touch points is a remarkable feat" he said in his communiqué in their annual report.

‘The overall company profits decreased from Rs.201 million to Rs.117 million in the face of challenging times for the leasing industry. The policy rate reduction was encouraging to a company like MBSL that does not have access to customer deposits. However, the growth opportunity presented by the lower interest rates was largely negated, due to the persistent downturn of the leasing market.

‘Earnings per Share (EPS) dropped from Rs.1.49 to Rs.0.87.

‘The asset growth 12% of the MBSL from Rs.11.89 billion to Rs.13.27 billion was encouraging as was the 7% growth in the loan portfolio from Rs.9.3 billion to Rs.9.91 billion.

‘Meanwhile, the income of the group increased from Rs.3.96 billion to Rs.4.28 billion and the net operating income of the group slightly dropped from Rs.1.76 billion to Rs.1.53 billion. Stock market trading was not very positive for the year due to the continuing downturn of the market. MBSL also incurred a substantial loss from its associate stock broking company Lanka Securities (Pvt.) Ltd. in addition to its own trading losses.

‘In line with this national financial sector consolidation plan, MBSL has commenced a process to merge MCSL Financial Services Ltd and MBSL Savings Bank Ltd, with MBSL said T. Mutugala, CEO of MBSL. Having taken over Ceylinco Savings Bank Ltd, which is now called MBSL Savings Bank Ltd, MBSL could not affect a total recovery of the said bank due to their inability to capitalize adequately and unforeseen eventualities experienced in the midst of downturn of its stability.
www.island.lk

Softlogic and Centara open Centara Ceysands Resort and Spa

Softlogic Holdings PLC together with Centara Hotels & Resorts of Thailand announced the grand opening of Centara Ceysands Resort & Spa Sri Lanka. The official opening ceremony was presided over by President Mahinda Rajapaksa yesterday.

The resort is located on the Bentota Peninsula, situated between the Bentota River and the Indian Ocean. The resort’s arrival lounge is situated at Aluthgama, on the inland side of the river, with guests travelling across the water by barge, a journey that takes two minutes.

“The opening of this beautiful new resort, set in one of Sri Lanka’s most outstanding tourism destinations, is a proud moment for us,” said Thirayuth Chirathivat, Chief Executive Officer of Centara Hotels & Resorts. “We view Sri Lanka as being of great potential for us, and the island is part of our strategy for developing our market in the Indian Ocean region.”

Speaking at the opening of the resort Softlogic Holdings PLC Chairman and Managing Director Ashok Pathirage said: “We are very excited about the opening of Centara Ceysands Resort & Spa as the resort is located in one of the best and most popular locations in Sri Lanka and also as this marks our first entrance into the hotel industry. We are very confident about the success of this venture as we have partnered with Centara Hotels and Resorts and are positive that they will exceed our expectations. Overall we are very hopeful about the prospects of this industry and we hope to open our second property the Movenpick City Hotel in the 4th quarter of 2015.”

The resort has 165 rooms and suites, including family residences, with all accommodation facilities featuring views across the river, or across the beach and the ocean.

Restaurant facilities will include Café Bem, serving Sri Lankan and international cuisines along with buffets; 360 Seafood, which specialises in locally sourced seafood; and Ceylon Club, which will have a gourmet selection of Ceylon teas.

Spa Cenvaree will offer traditional Sri Lankan and Indian treatments along with its range of signature Thai therapies, and will also feature a fitness centre, an oceanfront swimming pool with Jacuzzi and a children’s pool, in addition to a water sports centre and a Kids’ Club with separate zones for youngsters and teens.

The resort’s versatile events space can accommodate a wide-ranging number of functions including meetings, incentives groups, weddings and outdoor receptions, all supported by state-of-the-art audiovisual equipment and other facilities available at the business centre.

Centara Hotels & Resorts Sri Lanka Area General Manager Alexandre Glauser stated that the hotel is ready with a full complement of staff to welcome its first guests. “Centara Ceysands Resort & Spa is an outstanding property that will have both a romantic appeal for couples and lots of leisure attractions for families. For guests, the scene is set with the charming ride across the river on board our ferry and no matter which room or suite they are staying, the view for guests will be stunning.”

Centara Hotels & Resorts is Thailand’s leading operator of hotels, with 46 deluxe and first-class properties covering all major tourist destinations in the Kingdom. A further 21 resorts in Maldives, Vietnam, Shanghai, Bali, Sri Lanka, Mauritius, Ethiopia, Qatar, Laos and Oman brings the present total to 67 properties.

Brands and properties within Centara ensure that specific categories such as couples, families, individuals, and meetings and incentives groups will all find a hotel or resort that is appropriate to their needs. Centara also operates 29 branches of Spa Cenvaree, one of Thailand’s most luxurious and innovative spa brands, together with seven branches of the value brand Cense by Spa Cenvaree, which provides core spa services for busy travellers.

Softlogic Holdings PLC, rated as one of Sri Lanka’s most dynamic and aggressive conglomerates, commenced operations in 1991 as a software developer with just 12 employees and has now expanded its footprint, holding leading positions in domestic growth oriented sectors such as ICT, Healthcare, Retail, Financial Services, Automobiles and Leisure.

The Group now provides employment to over 6,500 individuals generating a turnover of more than $ 200 m. The Group’s representations and strategic alliances with reputed global institutions and large multinational corporations confirm its unparalleled local stature.
www.ft.lk

NDB Capital Holdings off to an impressive start

Subsequent to achieving the best financial year of its history in 2013, NDB Capital Holdings PLC (NCAP) started the year by recording an impressive consolidated quarterly income of Rs. 361 million, which translated to a consolidated PAT of Rs. 248 million.

At Company level, the quarterly Income and PAT stood at Rs. 197 million and Rs. 182 million respectively. The performance reiterates the leadership position the NCAP Group holds in the country’s investment banking space and lays the foundation for another record breaking year.

Revenue and Net Profits of the Company during 2014Q1 has seen a drop compared to the same period the prior year.

The reason for this apparent dip in performance is due to NCAP Group recording an extraordinary profit during the first quarter of 2013 owing to income from investing approximately Rs. 6.7 billion in cash it received via the divestment of both direct and indirect stakes held in Aviva NDB Insurance PLC. However, this cash was returned to the shareholders towards the end of 2013Q1 and was not available for the Company for investments beyond that period.

Adjusting for this one-off gain, the consolidated income and PAT of NCAP for 2014Q1 saw an increase of 40% and 53% respectively over the same quarter 2013.

This remarkable performance was mainly fuelled by efficient asset allocation, successful investment strategies and increased fee income from its group companies NDB Investment Bank Ltd., NDB Securities Ltd. and NDB Wealth Management Ltd. The Group annualised ROE too increased to 16% for the first quarter of 2014 from 10.9% (adjusted) in Q1 2013.

Chairman Ashok Pathirage, while commending the impressive performance of the NCAP Group, said: “Two companies of the Group – NDB Investment Bank and NDB Wealth Management – reaffirmed their leadership positions in their particular lines of business by being recognised as the ‘Best Investment Bank in Sri Lanka 2014’ and ‘Best Asset Management Company in Sri Lanka 2014’ respectively by the prestigious Global Banking and Finance Review Awards.”

He added: “I’m delighted to note that NCAP Group CEO Vajira Kulatilaka has been recognised as the ‘Best Investment Banking CEO in Sri Lanka 2014’ by Global Banking and Finance Review magazine for the contribution he has made to steer the investment banking cluster to great heights.”

Kulatilaka stated: “As evidenced by the first quarter performance, NCAP Group is well on track to record another great year in spite of the subdued activity in the country’s capital markets experienced thus far during the year.”

He added: “With our private equity initiative gaining momentum and some potential investors publicly announcing their interest to infuse capital to the fund, NCAP Group can soon successfully venture into and cater to another important segment of the country’s economy.”

NCAP is a subsidiary of National Development Bank PLC.
www.ft.lk

Kelsey reports Rs. 149 m Group net profits

Kelsey Developments PLC, a leader in housing development, reported profit after tax of Rs. 148.6 million for financial year 2013/2014. This was a significant improvement against the loss of Rs. 55.5 million incurred in the previous financial year. The increase in profit was primarily due to a one-off capital gain of Rs. 177.3 million from the sale of a property, the company said in a filling with Colombo Stock Exchange.

Consolidated turnover declined by 59% from the previous year to Rs. 95.6 million which is directly attributable to the low level of activity during the year under review. However, in the last quarter of the year, a six acre property in Mount Lavinia was acquired for development as an exclusive gated community housing project. This project, Templer’s Square valued at Rs. 2 billion will be the largest development in the company’s history.

Kelsey Developments PLC also significantly reduced its finance expenses to Rs. 10.4 million, a substantial reduction from Rs. 45.4 million incurred in the previous financial year. The company also effectively managed all operating expenses and reduced administrative costs by 2%.

At present, the company’s latest project Templer’s Square, launched by its operating subsidiary Kelsey Homes, has exceeded sales expectations with over 40 of the 100 units reserved within 60 days of the project’s launch. With such strong demand, the company expects that the remaining units will be sold before the end of March 2015. Commenting on the future outlook for the company, Kelsey Developments PLC Managing Director Dinesh Schaffter stated: “In the next financial year, we expect the demand for housing to increase considerably, given the reduced lending rate environment prevalent. The company has identified further properties to launch projects in the forthcoming financial year and expects to maintain profitability over the next few years. As a consistent provider of quality housing for over thirty years the company will continue to provide value for money to all aspiring home owners.”
www.ft.lk

Sri Lanka stocks at 1-week closing high

May 29 (Reuters) - Sri Lanka stocks closed at their highest in more than a week on Thursday led by telecom and financials while foreign inflows boosted sentiment with stockbrokers saying the outlook remained positive due to lower interest rates.

The main stock index ended 0.49 percent, or 31.01 points, up at 6,303.77, its highest close since May 20.

The bourse saw a net foreign inflow of 426.8 million rupees worth of shares on Thursday, extending the year-to-date net foreign inflow to 2.27 billion rupees.

The day's turnover was at 810.8 million rupees ($6.22 million), less than this year's daily average of 1.01 billion rupees.

Stockbrokers expect the market to gain in the near future due to lower interest rates after the central bank kept key rates at multi-year lows on Tuesday for the fourth straight month, as expected.

Shares of leading fixed-line phone operator Sri Lanka Telecom PLC rose 4.81 percent to 47.90 rupees a share, while biggest listed lender Commercial Bank of Ceylon PLC rose 2.86 percent to 129.60 rupees.

Conglomerate John Keells Holdings PLC, which accounted for 38 percent of the day's turnover on foreign buying, closed 0.43 percent firmer at 234 rupees a share. 

($1 = 130.4000 Sri Lanka rupees) 

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

Sri Lanka stocks close up 0.5-pct

May 29, 2014 (LBO) - Sri Lanka's stocks closed up 0.5 percent on Thursday with strong foreign participation amid eased foreign exchange controls, brokers said.

The Colombo benchmark All Share Price Index closed 31.01 points higher at 6,303.77 up 0.49 percent. The S&P SL20 closed 36.04 points higher at 3,486.69, up 1.04 percent.

Turnover was 810.92 million rupees, up from 451.16 million rupees a day earlier with 100 stocks closed positive against 78 negative.

John Keells Holdings closed 1.00 rupee higher at 234.00 rupees with three off-market transactions of 194.68 million rupees changing hands at the same market price per share contributing 24 percent of the daily turnover.

JKH’s W0022 warrants closed 80 cents lower at 61.00 rupees and its W0023 warrants closed 10 cents lower at 67.00 rupees.

Kelani Tyres closed 2.10 rupees higher at 65.30 rupees and Lanka Indian Oil Company closed 80 cents higher at 42.40 rupees, attracting most number of trades during the day.

Foreign investors bought 489.74 million rupees worth shares while selling 62.96 million rupees worth shares.

Sri Lanka Telecom closed 2.20 rupees higher at 47.90 rupees and Bukit Darah closed 36.30 rupees higher at 686.30 rupees, contributing most to the index gain.

Lion Brewery Ceylon closed 16.90 rupees higher at 449.00 rupees and Ceylon Tobacco Company closed flat at 1,065.00 rupees.

Commercial Bank closed 3.60 rupees higher at 129.60 rupees and DFCC Bank closed 2.00 rupees lower at 156.00 rupees.

NDB Capital Holdings closed 29.00 rupees lower at 470.00 rupees and Commercial Leasing and Finance closed 10 cents lower at 3.90 rupees.

Best Western Debuts in Spectacular Sri Lanka

Best Western International has reached another landmark in its international expansion, with the launch of the company’s first ever hotel in Sri Lanka.

The brand new BEST WESTERN Elyon Hotel Colombo opens its doors 1st July 2014, marking the US hotel group’s debut on this spectacular Indian Ocean island and boosting its Asian portfolio to 23 countries.

Located on Marine Drive, this charming city hotel offers 60 contemporary guest rooms, all of which come equipped with 32-inch LCD TVs, iPod docking stations and complimentary Wi-Fi.

BEST WESTERN Elyon Hotel Colombo is also expected to become a new star on this fast-growing city’s F&B scene. The hotel’s stylish rooftop bar and terrace offers a unique proposition for Colombo, with guests able to enjoy cool cocktails and tasty tapas overlooking the city. This is the perfect place to relax and socialize while watching the sunset over the Indian Ocean.

The hotel also offers an excellent all-day dining restaurant serving up an à la carte menu of local and international dishes.

For corporate travellers, BEST WESTERN Elyon Hotel Colombo provides a boardroom capable of hosting up to 30 people, plus a business centre. And after a hard day’s work, guests can wind down with a workout in the hotel’s well-equipped fitness centre.

“With fast-paced GDP growth and a burgeoning tourism industry, there is no doubt that Sri Lanka is one of Asia’s new ‘tiger economies’,” said Glenn de Souza, Best Western International’s Vice President of International Operations for Asia & Middle East.
“With economic growth similar to that of China and international visitor arrivals rising in double-digits, this wonderful country holds tremendous opportunities for both business and leisure travellers.

“I am delighted to be able to introduce Best Western’s world-famous values of comfort, connectivity and excellent service to travellers in this dynamic destination,” Mr. de Souza added.

BEST WESTERN Elyon Hotel Colombo joins a collection of more than 200 Best Western hotels either operating or in the pipeline across Asia and the Middle East.

http://www.thailand4.com/

Trans Asia Hotels posts Rs. 816 m pre-tax profit

Trans Asia Hotels PLC released its interim results for the fourth quarter and 12 months ended 31 March 2014.

The recurring profit before tax (PBT) for the financial year 2013/14, excluding the fair value gains on investment property, was Rs.816 million, a decrease of 5% over the recurring PBT of Rs. 857 million recorded in the previous year.

The recurring profit attributable to equity holders of Rs.743 million represented a decline of 4% in comparison to the Rs.777 million recorded in the previous financial year.

Revenue for the financial year 2013/14 was Rs.2.94 billion, this being an increase of 3% over the Rs. 2.84 billion recorded in the previous financial year.
www.ft.lk

Dunamis Capital posts net profit of Rs. 121.5 m

Dunamis Capital PLC has reported profit after tax of Rs. 121.5 million for the year ending 31 March 2014.

The holding company of First Capital, Kelsey Homes and Premier Synthetic Leather, Dunamis said consolidated revenues had declined by a marginal 7% to Rs. 1.8 billion.
Financial Services recorded net profit of Rs. 340 million for the year reviewed, while Property Development converted a net loss of Rs. 55 million in 2012-13 into net profit of Rs. 148.6 million, the company said in a filing with the Colombo Stock Exchange.

During the year under review the company invested Rs. 600 million in Kelsey Homes to fund the purchase of a six-acre property in Mount Lavinia and Rs. 200 million in Premier Synthetic Leather, the only synthetic leather manufacturer in Sri Lanka.

The latter incurred a pre-operational expense of Rs. 53 million which impacted the group’s bottom line, but is expected to commence commercial production in the first quarter of 2014-’15 and break even in the current financial year, Dunamis Capital’s Managing Director Manjula Mathews said.

Reviewing the operations of the Group, she said the lower profit reported by the Financial Services segment was primarily due to the absence of opportunities to realise the significant gains of the previous year through the sale of investment securities.
Administration expenses had more than doubled to Rs. 266.6 million as the financial services subsidiary enhanced the profile of staff and moved offices to a more appropriate location to achieve its long-term growth objectives, Mathews said. The year under review also saw the consolidation of First Capital Equities, a stockbroking company acquired in June 2013.

Looking ahead, Mathews said early sales of the new development of Kelsey Homes show promise, and the company expects demand for housing to increase over the next financial year in a low interest rate environment. “Kelsey has identified further properties for launch in the forthcoming financial year and expects a significant improvement in the company’s performance.”

“We also expect to see growth in financial services in the year ahead, especially in the structuring and placement of corporate debt securities given the tax incentives and the underlying low interest rate regime. There will also be increased focus on the corporate advisory business,” Mathews added.

The Dunamis group’s current holdings encompass interests in Financial Services (First Capital), Property Development (Kelsey) and Manufacturing (Premier Leather).
www.ft.lk

John Keells posts pre-tax profit of Rs. 317.3 m

John Keells PLC released its interim results for the fourth quarter and 12 months ended 31 March 2014.

The consolidated profit before tax (PBT) from continuing operations for the financial year 2013/14 was Rs. 317.3 million, a decrease of 5% over the corresponding PBT of Rs. 335.1 million recorded in the previous financial year.

The consolidated profit after tax (PAT) for the financial year 2013/14 was Rs. 156.2 million as against Rs. 752.8 million in the previous year as a result of the combined impact of the current year’s profits including an impairment charge of Rs. 135.5 million and the previous year including a gain from the fair valuation of investment property of Rs. 483.5 million.

These impacts are classified as discontinued operations as a result of the transfer of the land owned by the company at Glennie Street to Waterfront Properties Ltd., details of which are in the Annual Report.

The consolidated revenue for the financial year 2013/14 was Rs.874.8 million, this being an increase of 15% over the Rs.760 million recorded in the previous financial year.
www.ft.lk

Asian Hotels and Properties records PBT of Rs. 2.78 b

Asian Hotels and Properties PLC released its Interim Results for the fourth quarter and 12 months ended 31 March 2014.

The recurring profit before tax (PBT) for the financial year 2013/14, excluding the fair value gains on investment property, was Rs. 2.78 billion, a marginal decrease of 1% over the recurring PBT of Rs.2.81 billion recorded in the previous year.

The recurring profit attributable to equity holders of the parent of Rs. 2.13 billion represented decrease of 0.3% in comparison to the Rs.2.14 billion recorded in the previous financial year.

The Group revenue for the financial year 2013/14 was Rs. 8.26 billion, this being an increase of 5% over the Rs.7.89 billion recorded in the previous financial year.
www.ft.lk

Tea Smallholder Factories PBT increases 24% to Rs. 112.2 m

Tea Smallholder Factories PLC released its interim results for the fourth quarter and 12 months ended 31 March 2014.

For the financial year 2013/14, profit before tax (PBT) was Rs. 112.2 million, this being a 24% increase over the PBT of Rs. 90.8 million recorded in the previous financial year. The profit attributable to the equity holders of Rs. 81.5 million was a 3% decrease over the Rs. 84.1 million reported in the previous financial year.

Revenue was Rs. 2.68 billion, this being an increase of 10% over the revenue of Rs.2.43 billion recorded in the previous financial year.
www.ft.lk

Sri Lanka stocks edge up from 3-week low in thin volume

(Reuters) - Sri Lanka stocks edged up on Wednesday led by financials in thin trade trading volume, and stockbrokers said the outlook remained positive due to lower interest rates.

The main stock index ended 0.08 percent, or 5.32 points, up at 6,272.76, edging up from its lowest close since May 7 hit on Tuesday.

The day's turnover was at 451.16 million rupees ($3.46 million), well below this year's daily average of 1.01 billion rupees.

The bourse saw a net foreign outflow for the first time in six sessions. Foreign investors sold a net 27.3 million rupees worth of shares on Wednesday. But they are net buyers of 1.84 billion rupees so far this year.

Stockbrokers expect the market to gain in the near future due to lower interest rates after the central bank kept key rates at multi-year lows on Tuesday for the fourth straight month, as expected.

Shares of Ceylinco Insurance PLC rose 3.94 percent to 1351 rupees a share, while Bukit Darah PLC rose 2.2 percent to 650 rupees. 

($1 = 130.4000 Sri Lanka Rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Jeremy Laurence)

Sri Lanka stocks close higher

May 28, 2014 (LBO) - Sri Lanka's stocks closed in positive directions on Wednesday despite relatively low foreign participation on the bourse, brokers said.

The Colombo benchmark All Share Price Index closed 5.32 points higher at 6,272.76 up 0.08 percent. The S&P SL20 closed 3.40 points higher at 3,450.65, up 0.10 percent.

Turnover was 451.16 million rupees, down from 1.39 billion rupees a day earlier with 71 stocks closed positive against 114 negative.

Ceylinco Insurance closed 51.20 rupees higher at 1,351.00 rupees with two off-market transactions of 64.40 million rupees changing hands at 1,400.00 rupees per share contributing 14 percent of the daily turnover.

Commercial Bank closed flat at 126.40 rupees with an off-the-floor deal of 42.30 million rupees changing hands at 126.50 rupees per share contributing 9 percent of the turnover.

George Steuart Finance closed 3.50 rupees lower at 40.30 rupees, attracting most number of trades during the day.

Foreign investors bought 71.50 million rupees worth shares while selling 98.81 million rupees worth shares.

Bukit Darah closed 14.00 rupees higher at 650.00 rupees, contributing most to the index gain.

Commercial Leasing and Finance closed 10 cents higher at 4.00 rupees and People’s Leasing and Finance closed flat at 15.70 rupees.

Dialog Axiata closed 10 cents higher at 9.90 rupees and Sri Lanka Telecom closed 30 cents lower at 45.70 rupees.

Ceylon Tobacco Company closed 5.00 rupees lower at 1,065.00 rupees and Cargills Ceylon closed 3.00 rupees lower at 145.00 rupees.

Aitken Spence closed 1.00 rupee lower at 101.00 rupees.

Textured Jersey in ‘very generous dividend payouts’

‘Textured Jersey Lanka PLC (TJL) reported a 14% year-on-year growth in net profit to Rs. 1.2bn for the year ended 31st March 2014, supported by growth in turnover. The company’s cash position has allowed TJL to maintain its trend of "very generous dividend" pay-outs with Rs. 0.80 per share being declared as the final dividend for FY2013/14.

‘This boosted the total dividend for the year to Rs. 1.30 per share representing an impressive pay-out of 74% of total net profit for the year. According to Bill Lam, chairman of Textured Jersey, the company managed another year of impressive results despite recent adverse weather conditions faced in the United States, softening retailer demand growth, according to a press release.

It adds: ‘During the year under review, sales reached Rs. 12.7bn, 16% higher than that of last year. The company maintained its gross margin for FY2013/14 at 11% levels, and was able to achieve a 15% year-on-year growth in gross profit to Rs. 1.5bn. The gross profit for 4Q FY2013/14 also increased 14% year-on-year reaching Rs. 403mn. The same trend continued at the operating profit level, with FY2013/14 margins maintained around 8%, with Rs. 1.1bn reported as the annual operating profit, up 10% year-on-year. This annual operating profit was achieved on the back of a strong quarterly profit of Rs. 313mn for 4Q FY2013/14 up 9% year-on-year.

‘TJL’s strong cash generation ability has enabled it to maintain a near debt-free balance sheet and a healthy cash position throughout the period. The company was able to record Rs. 91mn in finance income for FY2013/14, representing a substantial 15% growth year-on-year. As per the results released, the company had no borrowings and a strong cash position of Rs. 2.1bn as at 31st March 2014.

‘Net profit for 4Q FY2013/14 was Rs. 352mn, representing a growth of 9% year-on-year. Net profit for the year ended 31st March 2014 displayed a strong 14% year-on-year growth pushing up the net profit to Rs. 1.2bn.

‘The 10-12% capacity added through the modernisation and expansion project will be utilized during 1Q FY2014/15. In addition, with the revised timelines, the multi-fuel boiler plant should be in operation in 2Q FY2014/15. According to a statement released to the CSE by Mr. Lam, "The envisaged cost savings from the multi-fuel boiler plant and the added capacity places TJL on a strong footing for future profit growth".
www.island.lk

Aitken Spence – RIU Hotels of Spain tie-up to build 500-room luxury resort

During the period, 2013/2014 Aitken Spence Hotel Holdings PLC, the Aitken Spence Group’s hotel owning strategic business unit, entered into a shareholders’ agreement with RIU Hotels of Spain to build a 500-room luxury resort in Ahungalla, costing approximately USD 100 million. The construction of the hotel is expected to commence during the second half of the financial year 2014/15, a press release said.

It adds: ‘Annual revenue for the Maritime Cargo Logistics sector increased 15.3% to Rs. 7.3 billion whilst profits before tax for the sector increase by 26% to Rs. 709 million. Entry into a strategic partnership in Fiji for port management services through the acquisition of a 51% shareholding in Ports Terminal Ltd - the first- ever public-private partnership overseas by a Sri Lankan company recorded to date, was a highlight for the year.

‘Blue chip conglomerate Aitken Spence PLC reported its annual unaudited financial results 2013/14 to the Colombo Stock Exchange on Monday, reporting profit attributable to shareholders of Rs 3.7 billion, an increase of 11.7% over the previous year’s profit of Rs 3.3 billion. Profit before tax was Rs 5.4 billion and profit after tax was Rs.4.5, recording growth of 7.6% and 5.5% respectively. The diversified Group’s annual revenue declined marginally to Rs. 36.6 billion whilst earnings per share improved by 11.7% to Rs. 9.04 for the financial year.

The Group’s bottom line was driven primarily by the Tourism sector. Sri Lanka welcomed over 1.27 million tourists during the year 2013, with a target of 1.5 million set for 2014.The boom in the tourism industry was reflected in the Group’s performance with the revenue of the Tourism sector for the financial year growing by 9.4 % to Rs. 16.9 billion and profit before tax surging by 26.3 % to Rs. 4.4 billion.

Services sector reported a revenue of Rs. 819.6 million for the financial year under consideration which was a growth of 11.5 %, and a profit before tax of Rs 180.5 million, a growth of 10.2% compared to the previous year. Strategic Investments sector reported a year on year decrease of 16.1% in revenue to Rs. 15.3 billion, while the profit before tax dropped by 81.1% to Rs. 159.8 million for the financial year primarily due to the Aitken Spence power plants in Matara and Horana not being operational during the reporting period consequent to the cessation of the Power Purchase Agreements. Further, a provision for impairment of approximately Rs. 400 million was made in respect of the remaining assets of these two companies, which dragged down the profits of the sector.

The company disposed of the Horana power plant during the financial year, while the 100 MW power plant at Embilipitiya remained operational, albeit with lower generation due to excessive rainfall during the first nine months of the financial year. During the period under review the Group inaugurated a land mark project by investing in a luxury retirement homes complex that will comprise of 140 villas and associated high-end facilities located at a 30 acre site in Negombo. The project aims to attract Sri Lankans living overseas who wish to return to their homeland as well as foreign nationals who wish to retire and live in Sri Lanka.
www.island.lk

Nomura, Thomson Reuters partner SL capital market

By Waruni Paranagamage
Japan’s Nomura Research Institute, a subsidiary of Nomura Holdings, announced its partnership with Thomson Reuters by introducing, for the first time in the country, an information solution that will provide up-to-the-minute information for the Sri Lankan capital market.

Although Thomson Reuters has been an active participant in the local capital market for over 20 years, the entrance of Nomura marks the first time that a Japanese financial services technology firm has sought to enter Sri Lanka. Both companies will be looking to provide Sri Lankan stockbrokers with a world-leading order management system and broker back office solution.

Addressing the launch event held at the Taj Samudra Hotel on Monday, Nomura Research Institute Financial Technologies India Vice President/Head of Business Development Arun Mitra emphasised: “While our solution is one that has evolved over 10 years in the world’s major financial markets supporting high volume real-time back office STP, Nomura Research Institute is committed to bringing this advanced technology to emerging markets in an affordable ‘pay-as-they-go’ software-as-a-service mode.”

Mitra also said that the company was very aware of how important it was for Nomura to guarantee its commitment to the local broking community by ‘localising’ its offerings through adapting its global best practices to local requirements.

Mitra added: “This is our mantra for our approach in Mongolia, Vietnam and now Sri Lanka, and in Thomson Reuters we have a likeminded partner who is also committed to the same long term vision for the Sri Lankan capital market.”

Nomura Research Institute Group Manager Tohru Watanabe, Omnesys Technologies Managing Director Shrikant Pandit, Thomson Reuters Head of Solutions Burgess Ghyara, Omnesys Technologies Product Manager – Algorithmic Trading Prabhakar Kadva and Nomura Research Institute Principal Business Analyst Partha Chowdhary also addressed the gathering.

Nomura Holdings is Japan’s largest asset manager and investment bank. Nomura Research Institute provides solutions to clients across a broad range of industrial IT solutions for the distribution, manufacturing and service industries as well as the healthcare business.

It supports eight of the top 10 Japanese equity brokerage firms by trading volume, 16 of the top 20 global asset management firms, 80% of Japanese mutual funds, and 60% of all order flows through the Tokyo Stock Exchange.

Having been active in Sri Lanka for over 20 years, Thomson Reuters was the first company to report Sri Lankan financial news to the world. The team is focused on the opportunity to reshape the Sri Lankan transactions market, by bringing in global best practises and connecting Sri Lanka on the global equities map.

The Thomson Reuters Autex trade route, which is one of the largest global FIX based order routing networks, will provide Sri Lankan brokers with simplified trading connectivity and will also expedite broker-client on-boarding by providing a plug-in to an extensive global ecosystem of EMS/OMS partners.

Currently more than 200 of the top firms in India use the TR system, in addition to various exchanges that offer TR OMNESYS NEST as a front office service to their customers.
The software as a service model is available to all members of partnering national stock exchanges and covers the entire trading community. Over 650 brokers log in through the co-located hosted solution, which is the same model proposed for Sri Lanka.
www.ft.lk

Sri Lanka SEC watchful of stock bubble amid low interest rates

* SEC says no bubble yet despite surge in trading

* Regulator warns investors not to play casino with stock investments

* Forty-five companies in pipeline for listing in 3 years

* Exchange demutualisation by end 2015; listing in 2016

By Shihar Aneez

COLOMBO, May 27 (Reuters) - Sri Lanka's stock market regulator is monitoring the risk of a potential bubble forming with a surge in trading activities and amid low interest rates, the head of the island nation's Securities and Exchange Commission said on Tuesday.

Average daily turnover has risen to $7.8 million this year compared with $6.4 million last year, with stockbrokers saying lower interest rates have compelled local investors to shift funds to riskier stocks from lower yielding fixed-income assets.

"The bubble is when you go and start chasing penny stocks. That situation we don't see yet...we are watching. We keep cautioning people not to play casino and invest intelligently," Nalaka Godahewa, the head of the exchange, told Reuters.

"At the moment we do not see it as a bubble because the P/E levels are below 15 and more active stocks are fundamentally strong ones," Godahewa said.

The central bank has slashed the repurchase rate and reverse repurchase rate by 125 basis points (bps) and 175 bps to the their multi-year lows of 6.50 percent and 8.00 percent, respectively, between December 2012 to January this year.

The yields in government securities have fallen between 387-543 bps to 6.57 percent and 7.02 percent since the central bank's dovish policy stance from December 2012, leaving investors with little choice for risk-free investments.

Confidence in Sri Lanka's exchange, with a market capitalisation of $20.21 billion, plummeted in 2011 after hitting a record high of 7,863.74 points amid suspected market manipulation and insider dealings. On Tuesday, the index ended 0.4 percent lower at 6,267.44.

Godahewa said legal action has been taken out against the suspected cases of market manipulation to instill confidence. But analysts say many local investors who actively traded are still keeping away.

Godahewa said some investors are still stuck with negative margins as they invested with borrowed money in 2011 and 2012.

LISTING A CHALLENGE

The SEC's efforts to get more companies listed on the exchange have yet to bear fruit. Only a few companies have been listed since 2009 despite a surge in the stock market after the conclusion of the country's 26-year war in May 2009.

Optimism over post-war growth produced gains of 125 percent in 2009 and 96 percent in 2010, but the trend reversed with losses of 8.5 percent in 2011 and 7.1 percent in 2012. The market is still on a recovery path after edging up 4.8 percent last year and is up 6.1 percent so far this year.

The country has witnessed a sustained average economic growth of more than 7.4 in the last four years through 2013 mainly due to state-led massive infrastructure projects financed by foreign commercial loans.

However, sluggish consumer spending due to high taxes and low disposable income has compelled a lot of private companies to postpone their investments and expansion, economists say.

"Companies need to raise capital only when they grow. If the country can sustain its economic development activities and the enthusiasm among the companies, they want to grow. They will need money and they will need options of raising money through equity and debt," Godahewa said.

However, he was optimistic about overcoming the challenge of getting companies listed. Forty-five firms are in the pipeline to list within the next three years, but he did not elaborate.

Godahewa also said the SEC was in the process of valuing the bourse for demutualisation.

"Our target is end-2015 to finish demutualisation. If we can finish the demutualisation by 2015, within the next one year, it should be listed."

($1 = 130.4000 Sri Lanka rupees) (Editing by Jacqueline Wong)

Sri Lanka stocks fall to 3-week low; blue-chips tumble

May 27 (Reuters) - Sri Lanka stocks fell to a three-week low on Tuesday led by select blue-chips like Sri Lanka Telecom PLC and conglomerate John Keells Holdings PLC, while trading in shares of some financial firms boosted turnover.

The main stock index ended 0.41 percent, or 25.58 points, lower at 6,267.44, its lowest close since May 7.

The day's turnover stood at 1.38 billion rupees ($10.58 million), more than this year's daily average of 1.02 billion, helped by Multi Finance PLC, Entrust Securities PLC , and Asia Asset Finance Ltd.

The bourse saw a net foreign inflow of 35.6 million rupees on Tuesday, extending the year-to-date net foreign inflow to 1.87 billion rupees.

Stockbrokers expect the market to gain in the near future due to lower interest rates after the central bank kept key rates at multi-year lows on Tuesday for the fourth straight month, as expected.

Shares of Sri Lanka Telecom PLC fell 5.74 percent to 46.00 rupees, while John Keells Holdings PLC fell 0.38 percent to 233.10 rupees. Both stocks dragged the overall index.

After the market closed, Keells said its March-quarter net profit fell 9 percent to 4.68 billion rupees.

Multi Finance PLC ended 0.6 percent up at 16.70 rupees, while Entrust Securities PLC rose 1.46 percent to 20.80 rupees. Asia Asset Finance PLC ended flat at 1.80 rupees a share.

The market has been on a rising trend since mid-March as many investors were compelled to return to the stock market because low interest rates have made fixed-income assets less attractive, stockbrokers said.

However, analysts have raised concerns over sluggish economic growth due to lower credit growth and consumer spending.

Despite a multi-year low interest rate regime, data showed private sector credit grew 4.3 percent in March from a year earlier, the slowest expansion since May 2010.

The latest trade data, released on Monday, showed imports have gained 8.2 percent in March, while exports hit a record high of $1.07 billion helping to narrow the March trade deficit by 15.5 percent compared to a year ago.

Central bank Governor Ajith Nivard Cabraal on May 19 said Sri Lanka's private sector credit growth would pick up to around 15 percent by the end of this year and continue to improve through 2016. 

($1 = 130.4000 Sri Lanka Rupees) 

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

John Keells Holdings March quarter profits down 9-pct

May 27, 2014 (LBO) - Profits at Sri Lanka's John Keells Holdings, fell 9 percent from a year earlier to 4.6 billion rupees the March 2014 quarter, with last year's profits boosted by fair value gains.

The group reported earnings of 4.63 rupees per share. In the year to March it reported earnings of 12.33 rupees per share.

Group revenues rose 5 percent to 24.2 billion rupees and cost of sales rose 4 percent to 17.3 billion rupees. The group grew gross profit 7 percent to 6.9 billion rupees.

Other operating income rose sharply to 1.54 billion rupees, from 513 billion rupees a year earlier. Fair value gains from investment property fell to 470 million rupees from 2.0 billion rupees a year earlier.

Profits from shipping and bunkering fell to 602 million rupees from 742 million rupees, and leisure was flat at 1.9 billion rupees.

Profits from property fell to 840 million rupees 1.25 billion rupees and consumer and retail fell to 479 million rupees and 1.43 billion rupees.

Sri Lanka stocks close down 0.4-pct

May 27, 2014 (LBO) - Sri Lanka's stocks closed down 0.41 percent with telco stocks losing ground despite continued low foreign participation, brokers said.

The Colombo benchmark All Share Price Index closed 25.58 points lower at 6,267.44 down 0.41 percent. The S&P SL20 closed 15.72 points lower at 3,447.17, down 0.45 percent.

Turnover was 1.39 billion rupees, up from 291.32 million rupees a day earlier with 90 stocks closed positive against 95 negative.

Entrust Securities closed 30 cents higher at 20.80 rupees with an off market transaction of 587.40 million rupees changing hands at 20.50 rupees per share contributing 42 percent of the daily turnover.

Multi Finance closed 10 cents higher at 16.70 rupees with an off market transaction of 316.02 million rupees changing hands at 16.60 rupees per share contributing 23 percent of the turnover.

The Finance Company non-voting shares closed 40 cents higher at 7.40 rupees and Laugfs Gas non-voting shares closed 90 cents lower at 30.50 rupees, attracting most number of trades during the day.

Foreign investors bought 52.83 million rupees worth shares while selling 17.24 million rupees worth shares.

Sri Lanka Telecom closed 2.80 rupees lower at 46.00 rupees, contributing most to the index drop by reversing its gains in the previous days.

Bukit Darah closed 14.00 rupees lower at 636.00 rupees and Lion Brewery Ceylon closed 17.80 rupees lower at 432.10 rupees.

Asian Hotels and Properties closed 1.90 rupees lower at 70.20 rupees and Aitken Spence Hotel Holdings closed 20 cents higher at 77.40 rupees.

Ceylon Tobacco Company closed 8.00 rupees higher at 1,070.00 rupees and John Keells Holdings closed 90 cents lower at 233.10 rupees.

JKH’s W0022 warrants closed 1.00 rupee lower at 62.00 rupees and its W0023 warrants also closed 1.00 rupee lower at 67.90 rupees.

NDB Capital Holdings closed 29.00 rupees higher at 499.00 rupees.

Sri Lanka's The Finance Company given liquidity facility, new board

May 27, 2014 (LBO) - Sri Lanka's Central Bank, said it had given a liquidity facility to The Finance Company, and has also appointed changed the board under a new restructuring plan.

The central bank has given "a long term facility from the Sri Lanka Deposit Insurance and Liquidity Support Scheme with immediate effect," and had issued "directions for the future conduct of the business under a new restructuring plan," the regulator said in a statement.

S H A M Abeyratne, PhD, has been named Chairman and S Rajapaksha, FCA, Deputy Chairman.

A P Lekamge, MBA (Managing Director, T Senthilverl, (Non-Executive Director), R Ahukorala, MBA, Non-Executive Director, T B Ekanayake, Attorney at Law & Notary Public,Executive Director and R D Abeywickrama, ACA, Executive Director.

Chairman M P Jayawardena and C Rosa had said they were not available re-appointment, the statement said.

The Finance was a member of Sri Lanka's Ceylinco group that the regulator is re-structuring. It is one of several finance firms that that faced liquidity trouble in 2009. The Central Bank is also trying to reduce the total number of finance companies in the system.

Aitken Spence profits up 11.7%

Ceylon FT: Conglomerate Aitken Spence PLC reported a profit attributable to shareholders of Rs 3.7 billion for the year ended 31 March 2014, up 11.7% over the previous year’s profit of Rs 3.3 billion.

Profit before tax was Rs 5.4 billion and profit after tax was Rs 4.5, recording growth of 7.6% and 5.5% respectively. The diversified group’s annual revenue declined marginally to Rs 36.6 billion whilst earnings per share improved by 11.7% to Rs 9.04 for the financial year.

“The Group’s bottom line was driven primarily by the tourism sector. Sri Lanka welcomed over 1.27 million tourists during the year 2013, with a target of 1.5 million set for 2014.The boom in the tourism industry was reflected in the group’s performance with the revenue of the Tourism sector for the financial year growing by 9.4 % to

Rs 16.9 billion and profit before tax surging by 26.3 % to Rs 4.4 billion. During the period, Aitken Spence Hotel Holdings PLC, the group’s hotel owning strategic business unit, entered into a shareholders’ agreement with RIU Hotels of Spain to build a 500-room luxury resort in Ahungalla, costing approximately USD 100 million. The construction of the hotel is expected to commence during the second half of the financial year 2014/15,” the company said in a statement.

Annual revenue for the Maritime Cargo Logistics sector increased 15.3% to Rs 7.3 billion whilst profits before tax for the sector increased by 26% to Rs 709 million. Entry into a strategic partnership in Fiji for port management services through the acquisition of a 51% shareholding in Ports Terminal Ltd – the first- ever public – private partnership overseas by a Sri Lankan company recorded to date, was a highlight for the year.

Services sector reported a revenue of Rs 819.6 million for the financial year under consideration which was a growth of 11.5 %, and a profit before tax of Rs 180.5 million, a growth of 10.2% compared to the previous year. Strategic Investments sector reported a year-on-year decrease of 16.1% in revenue to Rs 15.3 billion, while the profit before tax dropped by 81.1% to Rs 159.8 million for the financial year primarily due to the Aitken Spence power plants in Matara and Horana not being operational during the reporting period consequent to the cessation of the Power Purchase Agreements. Further, a provision for impairment of approximately Rs 400 million was made in respect of the remaining assets of these two companies, which dragged down the profits of the sector.

The company disposed of the Horana power plant during the financial year, while the 100 MW power plant at Embilipitiya remained operational, albeit with lower generation due to excessive rainfall during the first nine months of the financial year. During the period under review the Group inaugurated a land mark project by investing in a luxury retirement homes complex that will comprise of 140 villas and associated high-end facilities located at a 30 acre site in Negombo. The project aims to attract Sri Lankans living overseas who wish to return to their homeland as well as foreign nationals who wish to retire and live in Sri Lanka.

“The Company has been able to deliver consistent results through a combination of strategic foresight and the capacity to transform challenges into opportunities. These qualities have been underpinned by a well-diversified business model that supports the Company’s growth trajectory” said the Chairman, Harry Jayawardena. “Our strategies for the long term and exploration of potential new areas of business factor in the Company’s responses to some of the key future trends” he added.

The Group announced a dividend of Rs 2 per share which is a 33% increase over the previous year subject to approval by the shareholders at the Annual General Meeting. Aitken Spence PLC has operations in South Asia, the Middle East, Africa and South Pacific, in diverse industries including hotels, travel, maritime services, logistics, power generation and printing, with a significant presence in plantations, financial services, insurance, information technology and apparel.

www.ceylontoday.lk

Four-year bond yield hits 32 month low ahead of Treasury bond auctions

By Wealth Trust Securities
The secondary market for Treasury bonds continued its bullish trend yesterday as yields were seen dipping further mainly driven by the liquid two 2018 maturities (i.e. 1 April 2018 and 15 August 2018) to a 32-month low of 8.40% and 8.50% respectively and the 1 July 2019 maturity to a three-month low of 8.91% against its previous day’s closing levels of 8.45/48, 8.55/60 and 8.94/96.
This was ahead of today’s Treasury bond auction, the first in nearly two months for a total amount of Rs. 5 billion consisting of Rs. 1 billion on the 1 July 2019 maturity and Rs. 2.0 billion each on the 1 January 2019 and 1 June 2044 maturities which pay semi-annual coupons of 10.60%, 13.00% and 13.50% respectively.

Furthermore, durations of 2015, 2016 and 2017 maturities continued to derive heavy demand changing hands within the range of 7.15% to 7.22%, 7.35% to 7.56% and 7.98% to 8.05% respectively.

Meanwhile in money markets, overnight call money and repo rates averaged 6.94% and 6.51% respectively as surplus liquidity in money market stood at Rs. 20.31 b yesterday.
The Open Market Operations (OMO) department of Central Bank was seen mopping up an amount of Rs. 14.50 b on a four day basis at a WAvg of 6.61% while a further amount of Rs. 5.81 b was deposited at its Standing Deposit Rate (SDR) of 6.50%.

Rupee gains marginally
The rupee was seen gaining marginally yesterday to close the day at Rs. 130.37/42 subsequent to gaining to a daily high of Rs. 130.35 on the back of the strong external sector performance announced yesterday. The total USD/LKR traded volume for the previous day (23 May 2014) stood at $ 82.17 million.

Some of the forward dollar rates that prevailed in the market were: one month – 130.87; three months -131.85; and six months – 133.27.

www.ft.lk

Ceybank Equity Funds to pay highest-ever dividend of Rs. 417 m in 2013/14

• Distributes Rs. 383 m from Ceybank Unit Trust and Rs. 33 m from Ceybank Century Growth as tax free dividends for investors

Ceybank Asset Management Ltd., the managers for Ceybank Funds, made the highest-ever dividend distribution of Rs. 417 m for investors in their equity funds, Ceybank Unit Trust and Ceybank Century Growth Fund recently. Accordingly the distribution would translate in to a dividend of Rs. 2.00 per unit of the respective Funds.

Established in 1992 Ceybank Unit Trust is the biggest balanced fund in the country with a net asset value of Rs. 5.8 b while the Ceybank Century Growth Fund is the country’s first and the biggest equity fund with a net asset value of Rs. 1 b established in 1997.

Commenting on the occasion, Ceybank Asset Management Chairman K.L. Hewage said: “It is a historical milestone for Ceybank Funds as it is the highest-ever dividend payment made by the Ceybank Unit Trust Fund since inception.”

Challenging conditions
He further stated that the higher dividend payment during the year was made amidst challenging stock market conditions.

“Our funds have outperformed the broader market, benefited by asset allocation decisions made by the fund management team. Despite the moderate market growth of 4% during the FY 2013/14 the accumulated gains realised by trading of shares over the years enabled us to declare a higher dividend payout this year. Accordingly the current year dividend represents a growth exceeding 300% over the previous year which is significantly higher than the market growth during the period.”

“It is a historical milestone for Ceybank Funds as it is the highest-ever dividend payment made by the Ceybank Unit Trust Fund since inception. The higher dividend payment during the year was made amidst challenging stock market conditions – Ceybank Asset Management Chairman K.L. Hewage”

Expressing his views, Ceybank Asset Management Ltd. CEO Chitra Sathkumara stated that the current dividend of Rs. 2 per unit for both Ceybank Unit Trust and Ceybank Century Growth Fund would translate to a dividend yield of 7.6% and 3.4% respectively to its unit holders in addition to the capital appreciation of 7.9% and 9.3% respectively during the period based on unit offer prices as at 1 April 2013.”

Commendable returns
Sathkumara further stated that the both Ceybank Unit Trust and Ceybank Century Growth Fund have achieved commendable returns for its investors over the years. “For example the total return of an investor who had invested in Ceybank Unit Trust 10 years ago as at today would be 256% (CAGR of 13.6%) while it is 351% (16.3% CAGR) if one had invested on Ceybank Century Growth Fund.”

He further stated the significant gains realised by the funds over the years have enabled the funds to maintain its regular dividend policy even during the periods of poor market
 performance. 


“The Ceybank Unit Trust has realised Rs. 2,730 m while Ceybank Century Growth Fund realised Rs. 373 m during the last five years as capital gains from the share trading”.

He further noted: “With the current dividend, Ceybank Unit Trust has paid Rs. 19.90 per unit while the Ceybank Century Growth Fund which has paid Rs. 15 per unit cumulatively, more than the investment made by the original investor. Accordingly the Ceybank Unit Trust has in total distributed Rs. 2.8 b as dividends since inception.

“Had an investor reinvested the dividends back in the Ceybank Unit Trust since inception in 1992, his investment would have grown at CAGR of 12.0% as against All Share Index growth of 9.8%, while if he had done the same with Ceybank Century Growth Fund since inception in 1997 his investment would have grown at CAGR of 15.4% as against 14.3% growth in the All Share Index.”

Stock market outlook
Commenting on the outlook of the stock market, Ceybank Asset Management Fund Manager Indika Rajakaruna stated that 2014 would be a turning year for the stock market.








“We think the low interest rates would benefit the stock market growth with better corporate earnings and attractive valuations that would encourage higher investor participation. At present we are bullish on the equities and are looking ahead for a higher total return for our unit holders in the coming years as well.”

“Both Ceybank Unit Trust and Ceybank Century Growth Fund have achieved commendable returns for its investors over the years. For example the total return of an investor who had invested in Ceybank Unit Trust 10 years ago as at today would be 256% (CAGR of 13.6%) while it is 351% (16.3% CAGR) if one had invested on Ceybank Century Growth Fund – Ceybank Asset Management Ltd. CEO Chitra Sathkumara”

Ceybank Asset Management, one of pioneer asset management companies in Sri Lanka and founded in 1991, is backed by the shareholdings of Sri Lanka’s leading State-owned Bank of Ceylon and Sri Lanka Insurance, Carsons Cumberbatch PLC and India’s pioneer unit trust fund manager, Unit Trust of India.

In addition to equity unit trust funds, the company also offers products for investors in fixed income through the Gilt Edged and Money Market Fund series. The National Savings Bank is the Trustee while the Bank of Ceylon is the Custodian for all unit trust funds managed by the company.

www.ft.lk

HNB Assurance records excellent growth in Q1, 2014: highest-ever GWP in Q1

HNB Assurance PLC lived up to its  reputation as the fastest growing insurer in Sri Lanka by recording a growth of 24% in its turnover measured by Gross Written Premium in the quarter ended 31 March 2014.

Its Life Insurance GWP grew by 34% outpacing the Life Insurance market which grew by only about 10% in the first quarter of 2014. The Company’s achievement in the General Insurance sector was equally impressive as it recorded a growth of 16% while the General Insurance market recorded a decline by about 1%.

The combined GWP of Rs. 1.14 billion achieved in the quarter turned out to be the highest ever recorded by the Company in a single quarter. The combined GWP achievement of Rs. 538.3 million in the month of March also established a new record as the highest-ever GWP recorded in a month.

HNB Assurance Managing Director Manjula de Silva said: “This outstanding achievement is attributed to the renewed focus and energy with which the two recently segregated Life and General distribution teams commenced their operations.”

He is hopeful that the momentum built during the first quarter will be carried through during the entire year enabling the Company to end its last year as a composite Company on a high note.

The Company was also able to deliver an 8% growth in its Profit After Tax. The profit declared for the period of Rs. 53.9 million is derived entirely from the General Insurance business as the Company recognises a profit from Life Insurance only after the year – end actuarial valuation is completed.

HNB Assurance PLC is one of the fastest growing insurance companies in Sri Lanka with a network of 51 branches. HNBA is a composite Insurance company with a rating of A (lka) by Fitch Rating Lanka for “National Insurer Financial Strength Rating” and “National Long- term Rating”.

HNBA is also rated within the Top 100 Brands and Top 100 companies in Sri Lanka by LMD and HNB Assurance recently won International awards for Brand Excellence and HR Excellence and also won many awards for its Annual Reports at the Award ceremonies organised by the Institute of Chartered Accountants of Sri Lanka, ACCA Sri Lanka (Association of the Chartered Certified Accountants) and SAFA (South Asian Federation of Accountants)

www.ft.lk

Sri Lanka stocks edge up from 2-week low; turnover at 2-month low

May 26 (Reuters) - Sri Lanka stocks edged up in thin trade on Monday from a two-week low hit in the previous session led by Sri Lanka Telecom PLC, but turnover slumped to its lowest in two months.

The main stock index ended 0.20 percent, or 12.71 points, firmer at 6,293.02, edging up from its lowest close since May 8 hit on Friday.

The day's turnover slumped to its lowest since March 24, bourse data showed. It stood at 291.3 million rupees, well below this year's daily average of 1.02 billion.

Stockbrokers said the low turnover was due to sluggish foreign participation owing to holidays in the United States and Britain.

The bourse saw a net foreign inflow of 46.04 million rupees ($353,100) on Monday, extending year-to-date net foreign inflow to 1.83 billion rupees.

Stockbrokers expect the market to gain in the near future due to lower interest rates after the central bank kept key rates at multi-year lows on Tuesday for the fourth straight month, as expected.

Shares of Sri Lanka Telecom PLC rose 1.46 percent to 48.80 rupees, pushing up the overall index.

The market has been on a rising trend since mid-March as many investors were compelled to return to the stock market because low interest rates have made fixed-income assets less attractive, stockbrokers said.

However, analysts have raised concerns over sluggish economic growth due to lower credit growth and consumer spending.

Despite a multi-year low interest rate regime, data showed private sector credit grew 4.3 percent in March from a year earlier, the slowest expansion since May 2010.

The latest trade data, released on Monday, showed imports have gained 8.2 percent in March, while exports hit a record high of $1.07 billion helping to narrow the March trade deficit by 15.5 percent compared to a year ago.

Central bank Governor Ajith Nivard Cabraal on May 19 said Sri Lanka's private sector credit growth would pick up to around 15 percent by the end of this year and continue to improve through 2016.

($1 = 130.4000 Sri Lanka rupees) 

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

Sri Lanka stocks close up 0.2-pct

May 26, 2014 (LBO) - Sri Lanka's stocks closed up with telco and other index heavy stocks gaining despite low foreign participation, brokers said.

The Colombo benchmark All Share Price Index closed 12.71 points higher at 6,293.02 up 0.20 percent. The S&P SL20 closed 3.46 points higher at 3,462.89, up 0.10 percent.

Turnover was 291.32 million rupees, down from 804.00 million rupees last Friday with 84 stocks closed positive against 100 negative.

John Keells Holdings closed flat at 234.00 rupees with an off market transaction of 24.52 million rupees changing hands at the same market price contributing 8 percent of the daily turnover.

JKH’s W0022 warrants closed 70 cents higher at 63.00 rupees and its W0023 warrants closed 10 cents higher at 68.90 rupees.

The Finance Company closed 1.70 rupees higher at 14.00 rupees and its non-voting shares closed 1.00 rupee higher at 7.00 rupees, attracting most number of trades during the day.

Foreign investors bought 56.14 million rupees worth shares while selling 10.10 million rupees worth shares.

Sri Lanka Telecom closed 70 cents higher at 48.80 rupees and Asian Hotels and Properties closed 2.10 rupees higher at 72.10 rupees, contributing most to the index gain.

Lion Brewery Ceylon closed 9.90 rupees higher at 449.90 rupees and Ceylon Tobacco Company closed 10 cents higher at 1,062.00 rupees.

Oil palm firms Selinsing closed 97.50 rupees higher at 1,697.50 rupees and Indo-Malay closed 96.00 rupees higher at 1,796.00 rupees.

HNB closed 90 cents lower at 157.10 rupees and Commercial Bank closed 10 cents lower at 126.40 rupees.

Aitken Spence Hotel Holdings closed 80 cents lower at 77.20 rupees and John Keells Hotels closed 10 cents lower at 14.90 rupees.

Lanka Indian Oil Company closed 60 cents lower at 41.40 rupees.