Hatton National Bank, Sri Lanka March net down 13-pct

May 14, 2014 (LBO) - Profits at Sri Lanka's Hatton National Bank group fell 13 percent from a year earlier to 1.09 billion rupees in the March 2014 quarter as net interest income fell and loan losses went up, interim accounts showed.

The group reported earnings of 2.74 rupees per share for the quarter, in interim accounts filed with the Colombo Stock Exchange.

At stand alone bank level return on equity fell sharply to 8.01 percent from 14.26 percent.

Interest income fell in absolute terms 4 percent to 13.8 billion rupees in the March 2014 quarter and interest expense fell at a slower 2 percent to 7.5 billion rupees, but net interest income fell at a faster 7 percent to 5.7 billion rupees.

The interest margin fell to 4.34 percent from 5.09 percent and return on assets fell from 2.09 percent to 1.13 percent.

HNB's group loan book rose 3 percent to 361 billion rupees and financial investments - loans receivable rose 17 percent to 74.8 billion rupees.

Loan loss and impairment charges rose 40 percent to 1.44 billion rupees.

At stand alone bank level, gross non performing loans rose to 4.53 percent of risk weighted assets by end March 2014 from 3.64 percent in December.

The bank grew fee and commission income 23 percent to 1.13 billion rupees. Trading gains were a positive 278 million rupees up from a 1.01 billion rupee loss a year earlier.

Deposits grew 2 percent to 392 billion rupees.

Gross assets were up 3 percent to 536 billion rupees. Net assets fell 2 percent to 56.5 billion rupees. At stand alone bank level total capital adequacy fell to 15.08 percent from 16.52 percent, but was higher than the required 10 percent.

Janashakthi Insurance quarterly profits down

By J. Kurukulasuriya

Ceylon FT: Janashakthi Insurance Company PLC whose Managing Director is the Insurance Industry Veteran Prakash Schaffter, released its quarterly unaudited accounts to 31 March 2014, showing a small (2%) fall in 'total gross written premiums' to Rs 2,202 million over the previous year's corresponding figures.

Sector wise, the Life Insurance premia were 23% and Non Life premia were 77%. In the Non Life insurance sector, the main component was Motor Insurance which consisted of 66%, followed by Fire - 14 %, Miscellaneous - 16% and Marine insurance - 3%.

Profit for the period fell by 28% as compared to the previous year's quarter, to
Rs 155 million. An increase in 'total benefits and claims and acquisition costs', (Rs 1,636 million), partly accounted for the results. Finance cost and Admin expenses, also increased by 12%. The stated capital of the company is Rs 1,496 million, consisting of 363,000,132 ordinary shares. The 'public shareholding' as defined by the CSE, is 31.86%.

The shares traded between a high of Rs 14.60 (on 25 March 2014), and a low of Rs 12.70 (on 6 January), within the quarter.

The major shareholders of the company are Janashakthi Ltd., with 68%, Bank of Ceylon – 4%, HSBC international nominees Ltd – 3%. Among individuals, Dr T. Senthilverl holds 0.68%.
www.ceylontoday.lk

Lanka Hospitals sees 33% rise in staff costs

By J. Kurukulasuriya

Ceylon FT: The Lanka Hospitals PLC, (formerly known as Apollo Hospitals), operators of the private hospital located at Elvitigala Mawatha, Narahenpita, have reported a 17% increase in group revenue to Rs 1,145 million, but net profit after tax fell to Rs 144 million (down 18%) in the quarter ended 31 March 2014.

Cost of sales, staff costs and other operating expenses, all increased, with staff costs rising by 33% to Rs 312 million in the quarter. The cash flow statement for the quarter indicates a cash outflow of Rs 53 million for the purchase of property, plant and equipment. The bank overdraft stood at Rs 195 million.

The buildings of the group were revalued as at 31 December 2013 by A.A.M. Fathihu - F.I.V (Sri Lanka) incorporated valuer. "Only the surplus on revaluation relating to the building was incorporated in the financial statements from its effective date 31 December 2013", states the company. The revalued buildings are reflected at a value of Rs 3,225 million. 

The stated capital of the company is Rs 2,671 million. The Public Shareholding in the company is 16.73%, (37,433,261 shares).

Sri Lanka Insurance Corporation is the company's main shareholder with 55%, Fortis Global Healthcare Holdings holds 28%, and the Bank of Ceylon Unit Trust holds 0.23%.
Among individuals, the main shareholder is K. Rajakanthan - (0.23%).

Shares traded at between Rs 47.70 and Rs 40 during the quarter. There are 7,671 shareholders of whom 146 are institutions and 30 are non residents.

Gotabhaya Rajapaksa, secretary Ministry of Defence and Urban Development, is the Chairman of the Company. R. S. Cabraal is the deputy Chairman. Prof. Dayasiri Fernando is also a member of the Board.
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Amana bank reports quarterly loss

By J. Kurukulasuriya

Ceylon FT: Amana Bank a relative newcomer to the country's banking sector, (established in 2009), showed a 126% leap in 'net financing income' to Rs 308 million, but reported a loss of Rs 49 million for the quarter ended 31 March 2014, as compared to a quarterly loss of 72 million in 2013.

Net gains from trading were down 51% to Rs 32 million. Personnel expenses rose 33%, and other operating expenses 31%.

The bank reported that its core capital adequacy ratio, as a percentage of risk weighted assets (minimum requirement, 5%) was 18.4% at 31 March 2014.

The stated capital of the bank is Rs 5,866 million. The main shareholders of the company are Bank Islam Malaysia Berhad and AB Bank Ltd., both with 14.44%, Tea Exporter – Akbar Brothers Pvt Ltd., with 9.98%, and Islamic Development Bank with 9.62%. Expolanka Holdings holds 7.22%. Among individuals, Nagi Saleh Mohammed Al Faqih has 2.99%. Of the directors, Kevin Mark Pocock (alternate director to Harsha Amarasekera, PC) holds 27,084,302 shares.

The shares traded between Rs 7.10 and Rs 5 during the quarter.

The percentage public holdings is 40% of the shares.
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Tata Housing announces mixed use project in Colombo

Investment of over $400 mn into integrated development
Brotin Banerjee, Managing Director and CEO, Tata Housing with the 3D model of the proposed Mixed Used Project in Colombo


Tata Housing, India’s fastest growing Real Estate Development Company and a wholly-owned subsidiary of Tata Sons announced the launch of its mixed use township at Colombo in Sri Lanka. The project in partnership with UDA (Urban Development Authority) of Sri Lanka will commence its operations with starting construction of residences for rehabilitation of the current tenants in phase one and also launch a mix use development project at Slave Island in Colombo. The first of its kind initiative by an Indian real estate company will involve investments of over $ 400 million.

The Sri Lankan Urban Development Authority (UDA) have rehabilitated the residents of Slave Island till the time of the completion of the project and aim to eradicate underserved developments and provide better housing facility to the occupants with over 550 residences. The rehabilitated occupant will have condominium ownership and privilege of mortgage facility by ownership. In the luxury project, the project will have estimated 4 residential towers (each tower consisting of 36 floors) and approximately 650 units comprising of one, two, three, four bedroom units and duplexes and penthouses. It will also feature a commercial retail area, a commercial office space and business hotels and service apartments.

Commenting on the announcement, Brotin Banerjee, MD and CEO, Tata Housing, said, "Tata Housing clearly recognizes the opportunity for long term and sustained growth in the Sri Lankan housing market. Our investment represents our strong ties with our neighbours and urban renewal within prime locations of the country. We assure the Sri Lankan government of world class infrastructure aligned to growth needs of their economy. Our association is an endorsement of the Tata trust that holds strong globally."

Nimal Perera, chairman, UDA (Urban Development Authority) said, we are extremely glad in partnering with Tata Housing to pilot the first redevelopment project under the PPP model which provide a better quality of life for the current tenants of slave island. We are sure that the experience of Tata Housing and their thrust on quality would result in this project to be a landmark in Colombo"
Under the new project the current tenants will have access to a completely new environment enhancing the standard of life with proper ventilation, sanitary facilities and Lifts along with open spaces for the occupants. It will also provide better roads, better drainage, security and other benefits of modern living with amenities like gymnasium, community hall, kids play area.
www.island.lk

Alumex notches 13% revenue growth

‘The Alumex Group "performed exceptionally well" in the financial year ended March 31st 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, a press release said.

‘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, the release added.

‘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.

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Lanka tourism can surpass $ 2 billion foreign revenue in 2014

Sri Lanka can surpass $ 2 billion foreign revenue from the tourism industry by end of 2014, if current conditions remain stable and the influx of the tourists continue to increasing with on going tendency.

The Director General Dr. D.S. Jayaweera of the Sri Lanka Tourism Development Authority mentioned yesterday (May 12) that the steady rise in tourism numbers to reach half a million by end April (534,132) recording a 27.6% increase over the same period last year, the industry is poised to reach beyond $ 2 billion earnings by end this year. By end April 2014, earnings have reached $ 718.9 million.

An estimated 10-12% increase in domestic tourism activity this year, exceeding the six million listed last year, would add to the victory, in the backdrop of domestic travel exceeding two million by end March this year.

"We have seen a steady rise in tourist earnings over the years," he added. In 2004 earnings from the tourism industry were recorded at $ 416 million. "Last year earnings were healthy $ 1.75 billion."

This would mean that the tourism industry could contribute a greater amount to the national economy, as the industry’s foreign inputs are only 10-20%, compared with 40-60% foreign inputs in the apparel industry.
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