Alumax leads the field

The Alumex Group performed exceptionally well in the financial year ended 31st March 2014, with revenue growing 13% to reach Rs. 2.8 billion. Profit before tax of the group was Rs. 464 million recording an increase of 23%. Profit after tax was reported as Rs. 379 million compared with Rs. 307million in the previous year.

The year 2013 saw Sri Lanka’s GDP grow by 7.3%, with the construction sector being a major contributor. The construction sector grew at 14.4%, double the pace of aggregate GDP growth, driven by a continuing trend of investment in infrastructure, hotels and the residential sector. Macroeconomic conditions were also conducive as interest rates declined, reducing cost of capital, whilst inflation was anchored at mid-single digit levels. Modest global economic growth ensured moderate commodity prices including that of aluminium, the key raw material for Alumex.

Encouraged by the growth in the construction sector, Alumex has invested further in its distribution network and expanded into new areas across Sri Lanka. The Group also made progress in its export ventures as revenue was increased in the Maldives and India.

Despite the strong growth in construction, the industry is not without challenges. The volatility in the liquidity position in the construction sector restricted sales in the latter half of the year but a change in strategy mitigated its effects by the year end. There is also an ever present risk of low quality imports entering the market and it is important that the government is vigilant of this and takes steps to ensure that domestic industry does not suffer as a result.

Given the encouraging performance of Alumex since Hayleys acquired the Group in 2010, the company was listed in the Colombo Stock Exchange in March 2014 with an IPO of Rs 838 Million.

The Board of Directors of Alumex comprises Messrs Mohan Pandithage ( Chairman), Rohan Peris (Managing Director), S C Ganegoda, D W P N Dediwela, A A Akbarally, R P Pathirana, H H Abdulhusein, Dr. H Cabral and S Munaweera.

CSE - Press Release by ALumax

Sri Lanka stocks close higher

May 09, 2014 (LBO) - Sri Lanka's stocks closed to a near 11 month high on Friday with the turnover recording a 23 month high, brokers said.

The Colombo benchmark All Share Price Index closed 9.14 points higher at 6,284.87 up 0.15 percent. The S&P SL20 closed 10.50 points higher at 3,457.26, up 0.30 percent.

Turnover was 7.14 billion rupees, up from 935.21 million rupees a day earlier with 118 stocks close positive against 64 negative.

Expolanka Holdings closed flat at 10.30 rupees with five off market transactions of 6.27 billion rupees contributing 88 percent of the turnover.

Merchant Bank closed 1.30 rupees higher at 17.40 rupees, trading heavily on the market.

Foreign investors bought 6.43 billion rupees worth shares while selling 155.69 million rupees worth shares.

Bukit Darah closed 19.30 rupees higher at 649.10 rupees and Asian Hotels and Properties closed 2.80 rupees higher at 70.00 rupees, contributing most to the index gain.

Sampath Bank closed 2.60 rupees higher at 188.00 rupees and Commercial Bank closed 50 cents higher at 128.00 rupees.

LOLC closed flat at 80.00 rupees and John Keells Holdings closed 20 cents higher at 234.80 rupees.

JKH’s W0022 warrants closed 80 cents higher at 64.00 rupees and its W0023 warrants closed 10 cents higher at 70.00 rupees.

Ceylinco Insurance closed 45.80 rupees higher at 1,350.00 rupees and NDB Capital Holdings closed 19.90 rupees lower at 480.10 rupees.

Ceylon Tobacco Company closed 10.00 rupees lower at 1,090.00 rupees and Nestle Lanka also closed 10.00 rupees lower at 1,975.00 rupees.

Sri Lanka Telecom closed 90 cents lower at 47.10 rupees and Dialog Axiata closed flat at 9.40 rupees.

Japan's Sagawa logistics buys into Sri Lanka's Expolanka Holdings

May 09, 2014 (LBO) - Japan based Sagawa logistics group has bought a 30 percent stake in Sri Lanka's Expolanka Holdings Plc and official said with the firm expected to take its share up to 51 percent.

SG Holdings bought 586 million shares at 10.70 rupees a share Friday.

Grouo chief executive Hanif Yusoof said with the entry of the Japanese investor Explanka would become a truly global company.

Founding family members of the group, including Osman Kassim, Sattar Kassim, Shafik Kassim, Farook Kassim and chief executive Yusoof, were among the sellers.

The Japanese group is expected to make an offer to other shareholders which can take its stake above 51 percent.

The 34 year old Expolanka's core business is logistics and it has built up a network spanning 17 countries including South Asia, East Asia and Africa.

Yusoof is expected to continue as chief excutive, the firm said in a stock exchange filing.

Analysts say the interest of a Japanese firm in Sri Lanka is an indication of the island's growing importance as a logistics hub.

Dipped Products Group remains resilient in face of difficult year

The Hayleys Group subsidiary, Dipped Products, has recorded a consolidated turnover of Rs. 23 b turnover in the financial year ending 31 March 2014.

In a statement the Company said despite numerous challenges encountered during the year – including the forced closure of the latex glove manufacturing factory at Rathupaswala, since 30 July 2013 – DPL sustained its revenue base with a marginal 2.4% decline in turnover.

DPL’s Hand Protection sector reported a 9% reduction in turnover to Rs. 13.4 b from Rs. 14.7 b in the preceding financial year. However, the Sri Lankan manufacturing FOB turnover declined by 13% during the period from Rs. 8.3 b in 2012/13 to Rs. 7.2 b. The Plantation sector posted an increase in turnover, reflective of a 6% growth amounting to Rs. 10.4 b, up from Rs. 9.8 b in 2012/13

Group Profit Before Tax (PBT) for the reporting period declined by 29% to Rs. 1.5 b, in comparison with Rs. 2.2 b in the previous financial year. Contribution to PBT from the Hand Protection sector was Rs. 910 m, compared to Rs. 1.3 b in 2012/13, thus recording a decline of 32%.

The reduction is directly attributable to the losses in production at Rathupaswala manufacturing facility. Contribution from Plantations to PBT witnessed a reduction of 20%, declining from Rs. 928 m in the previous financial year to Rs. 747 m during the reporting period, due largely to the combined effects of adverse weather and wage increase.

Group Profit After Tax (PAT) declined by 35% to Rs. 1.2 b down from Rs.1.8 b in the previous financial year.

Dipped Products (Thailand) Ltd., the medical glove manufacturing operation improved its overall performance during the financial year while the contribution from Icoguanti S.p.A, DPL’s Italian marketing operation rose by 41% versus previous year.

Speaking on the performance of DPL, Chairman Mohan Pandithage credited the Group for withstanding a challenging operating environment in 2013/14. DPL has managed to overcome a very trying financial year, and has demonstrated its’ ability to sustain the business, yielding satisfactory results,” noted Pandithage.

“The Company undertook a series of quick and critical decisions during the year to sustain the immediate and future performance of DPL. As a result, in 2013/14, the Company incorporated a fully-owned subsidiary DPL Premier Gloves Ltd., a new manufacturing facility established at the Biyagama Export Processing Zone to manufacture and export rubber gloves. The new facility will be key in moving DPL to new phase of growth,” he noted.

Managing Director Dr. Mahesha Ranasoma cited DPL’s loyal customers as the core to its performance in the financial year. “We are, indeed, thankful to our customers for their support at what has been the most difficult operating period for DPL. Our customers extended their fullest support and cooperation and in turn we assure them of our commitment to serve them to the best of our capabilities in the future, as we have done in the past,” he noted.

Dr. Ranasoma further added that DPL won the ‘Best Innovative Model for CSR’ Award from JASTECA (Japan Sri Lanka Technical & Cultural Association) for its Corporate Social Responsibility project FirstLight during the financial year. The FirstLight initiative reflects DPL’s commitment towards business sustainability in which economic, environmental and social factors are integrated in order to empower smallholder rubber farmers to achieve their maximum capability as well as empowering farmer communities through capacity building activities. Through FirstLight, DPL’s mission is to introduce and promote ethically produced gloves to the world market. 

www.ft.lk

Sri Lankan shares rise to near 11-mth closing high; credit growth a concern

May 8 (Reuters) - Sri Lankan stocks rose on Thursday to a near 11-month closing high as foreign inflows and a lower interest rate regime helped boost sentiment, but the lack of credit growth has raised concerns over earnings of listed companies, stockbrokers said.

The main stock index rose 0.37 percent, or 23.13 points, to 6,275.73, its highest close since June 11. The day's gain boosted the market capitalisation by 9.69 billion rupees to 2.63 trillion rupees ($20.14 billion), led by large caps.

"We see retail investors coming into the market due to the current lower interest rates and activating their inactive accounts," a stockbroker said on condition of anonymity.

"But lower credit growth has raised questions over growth and earnings. Still the consumer spending is low and that is why we don't see companies borrowing and expanding."

Some traders are speculating about another reduction in the central bank's key interest rates if credit growth remains sluggish.

Despite a multi-year low interest rate regime, private sector credit grew 4.4 percent in February from a year earlier, the slowest expansion since May 2010. That compared with growth of 5.2 percent in January and 13.3 percent in February 2013.

The day's turnover was 935.2 million rupees ($7.16 million), less than this year's daily average of 968.9 million rupees.

Foreign investors were net buyers of 137.8 million rupees worth of stocks on Thursday, but they have been net sellers worth 6.8 billion rupees so far this year.

Shares of Nestle Lanka PLC rose 2.32 percent to 1,985 rupees, while Bukit Darah PLC rose 2.8 percent to 629.80 rupees.

The market gained 4.28 percent in April as some retail investors started buying risky assets across the board as the central bank kept policy rates steady at multi-year lows for the third straight month. 

($1 = 130.6150 Sri Lanka Rupees) 

(Reporting by Shihar Aneez; Editing by Anupama Dwivedi)

Talawakelle Plantations, Sri Lanka March net down 60-pct

May 08, 2014 (LBO) - Profits at Sri Lanka's Talawakelle Plantations Plc, fell 60 percent to 34 million rupees in the March 2014 quarter from a year earlier as margins on tea estates declined and hydro power revenues fell, interim accounts showed.

The group reported earnings of 1.44 rupees per share for the quarter.

Revenues rose 2 percent to 1.0 billion rupees in the March quarter from a year earlier and cost of sales rose at a faster 11 percent to 899 million rupees sending gross profits plunging 40 percent to 105 million rupees.

Finance expenses were flat at 25 million rupees.

Revenues from tea rose to 984 million rupees from 943 million rupees but gross profits fell to 105 million rupees from 153 million a year earlier.

Rubber revenues fell to 10 million rupees from 11.9 million generating a loss of 2.0 million rupees.

Revenues from a mini-hydro power plant fell to 4.8 million rupees in the quarter from 23.6 million rupees generating a loss of 3.7 million rupees.

Sri Lanka has seen drought conditions in many parts of the country from the second quarter of 2013.

Sri Lanka shares close up 0.4-pct

May 08, 2014 (LBO) - Sri Lanka's shares closed 0.37 percent higher for the second consecutive day with index heavy stocks gaining amid net foreign buying, brokers said.

The Colombo benchmark All Share Price Index closed 23.13 points higher at 6,275.73 up 0.37 percent. The S&P SL20 closed 12.81 points higher at 3,446.76, up 0.37 percent.

Turnover was 935.21 million rupees, down from 1.00 billion rupees a day earlier with 115 stocks close positive against 73 negative.

Distilleries closed 20 cents higher at 206.20 rupees with three off market transactions of 113.26 million rupees contributing 12 percent of the turnover.

All off market deals accounted for 38 percent of the daily turnover.

Lanka IOC closed 1.00 rupee higher at 44.00 rupees with market transactions of 95.19 million rupees contributing 10 percent of the turnover while attracting most number of trades.

ACME Printing and Packaging closed 1.10 rupees higher at 12.80 rupees and Softlogic Holdings closed flat at 12.50 rupees, trading heavily on the counters.

Foreign investors bought 366.91 million rupees worth shares while selling 229.09 million rupees worth shares.

Nestle Lanka closed 45.00 rupees higher at 1,985.00 rupees and Bukit Darah closed 17.00 rupees higher at 629.80 rupees, contributing most to the index gain.

Asian Hotels and Properties closed 2.30 rupees higher at 67.20 rupees and LOLC closed 1.90 rupees higher at 80.00 rupees.

Dialog Axiata closed 10 cents higher at 9.40 rupees and Sri Lanka Telecom closed 10 cents lower at 48.00 rupees.

Lion Brewery Ceylon closed 4.80 rupees lower at 430.20 rupees and John Keells Holdings closed 40 cents lower at 234.60 rupees.

JKH’s W0022 warrants closed 80 cents lower at 63.20 rupees and its W0023 warrants closed 10 cents higher at 69.90 rupees.

Asiri Hospital Holdings closed 50 cents lower at 22.00 rupees and Royal Ceramics Lanka closed 2.70 rupees lower at 103.20 rupees.