Touchwood given further time on undertaking by senior counsel

The Commercial High Court yesterday gave former Chairman/CEO of Touchwood PLC Lanka Kiwlegedara time till August 25th, to submit statement of affairs and all other documents pertaining to Touchwood PLC, upon the firm undertaking given by Counsel Nihal Fernando PC.

During the hearing before Commercial High Court Judge Amendra Senevirathna yesterday, the judge said that the extension was only made on the personal undertaking of Nihal Fernando, PC, as he is a senior and respected counsel.

Nihal Fernando, PC, appearing on behalf of Kiwlegedara for the first time yesterday informed court that preparation of the statement of affairs and all other documents would be submitted in due course as his client needed more time to prepare the document.

He said that he received the framework for the necessary documents on August 6 and as such Kiwlegedara had no time to prepare the said documents.

Counsel Hafeel Farisz appearing for the liquidator said the statement of affairs was a legal document listed under winding up rules of 1939 and as such the framework was a legal mechanism which any company being wound up was aware of.

He further said by the letter dated June 15 Kiwlegedara had in fact informed the liquidator that he would submit the statement of affairs within two weeks which the liquidator is yet to receive.

During the hearing which took a heated turn at times, Counsel Avindra Rodrigo appearing on behalf of the Petitioner said the request for further time was a delaying tactic used by Kiwlegedara.

“They took us through a ten month process of winding up and thereafter he has failed to give a single document to the liquidator or to court. The fact that during the last hearing they agreed to submit all the documents and an order made in this regard was completely disregarded. This is contempt of court,” he said.

He further said none of the documents ordered by the court in its previous order were submitted.

“Not one document has been given. The order was to give all documents pertaining to the assets of the company including the statement of affairs which the counsel appearing on that day undertook to do,” he said. Judge Senevirathna reiterating the view of Counsel Rodrigo said there had been many opportunities given to Kiwlegedara to provide the said documents to the liquidator.

Fernando, PC, said he was appearing for the first time and therefore requested for more time in order to submit the said documents.

Fernando, PC, further said the company was willing to corporate with the liquidator to dispose all assets and settle the creditors.

“We will be able to revive the company back again with the help of the liquidator,” he said. The company has enough assets to settle all the depositors, we have assets in Thailand and we will go with the liquidator and look at ways of selling them. These are all valuable assets,” he said. Counsel V.K. Choksy appearing for another creditor also said that Kiwlegedara has been given enough time to produce the said documents pertaining to the assets, but has failed to do so.

Thereafter the court called on the liquidator Sudath Kumara who said the only document he had received so far was a bank statement from Hatton National Bank, which had a balance of Rs.3, 000. However, all parties agreed that since a senior counsel was appearing and making an undertaking, a further date may be granted.

Having heard submissions by all parties, Judge Senevirathna ordered Kiwlegedara to submit all documents pertaining to the assets of the company, and the statement of affairs to be submitted by August 25 to the liquidator.

The Judge said that he was making the extension only due to the application made by Nihal Fernando, PC, who undertook to present all documents.

The next hearing was fixed for 27th August,1.30 pm .
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Dialog consolidates performance with a Net Profit of Rs3.0Bn in 1H 2014

Dialog Axiata PLC announced, Friday 08th August 2014, its consolidated financial results for the six months ended 30th June 2014. Financial results included those of Dialog Axiata PLC (the “Company”) and of the Dialog Axiata Group (the “Group”) post-consolidation with subsidiaries Dialog Broadband Networks (Pvt) Ltd (“DBN”), and Dialog Television (Pvt) Ltd (“DTV”).

The Group recorded strong growth in revenue across Mobile, Digital Pay Television and Fixed Line businesses to reach Rs16.7Bn in Q2 2014 and Rs33Bn for 1H 2014 respectively, representing an increase of 2% Quarter On Quarter (“QoQ”) and 7% Year to Date (“YTD”). 

On the backdrop of strong revenue growth and lower operating costs, Group EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) increased 12% QoQ with Q2 2014 EBITDA being recorded at Rs5.3Bn. Group EBITDA for 1H 2014 was recorded at Rs9.9Bn featuring an EBITDA margin of 30.2%.

Group NPAT (Net profit After Tax) for Q2 2014 was posted at Rs1.7Bn, an increase of 31%
QoQ on the back of growth in Group EBITDA and lower depreciation. Group NPAT for 1H 2014 was recorded at Rs3.0Bn, an increase of 15% YTD largely due to 1H 2013 performance being impacted by foreign exchange losses.

At an entity level, Dialog Axiata PLC (“the Company”) featuring the Mobile, International and Tele-Infrastructure segments of the Group portfolio continued to contribute a major share of Group Revenue (85%) and of Group EBITDA (90%). Underpinned by the contribution from its 9 Million over Mobile subscriber base, Company Revenue grew by 1% QoQ to reach Rs14.4Bn in Q2 2014, with revenue for 1H 2014 being recorded at Rs28.6Bn, up 6% relative to the corresponding period in 2013. Company EBITDA reached Rs4.7Bn in Q2 2014 and Rs8.9Bn for 1H 2014 respectively, representing an increase of 13% QoQ and 1% YTD, largely driven by growth in revenue and lower operating costs. Company NPAT for Q2 2014 increased by 35% QoQ to reach Rs2.0Bn on the back of higher EBITDA. Company NPAT for 1H 2014, was posted at Rs3.5Bn compared to a NPAT of Rs2.7Bn recorded for the corresponding period in 2013 largely due to 1H 2013 performance being impacted by foreign exchange losses.

Dialog Television (DTV) the Digital Pay Television business of the Dialog Group continued its positive performance trajectory to reach a revenue figure of Rs2.2Bn for 1H 2014, exhibiting growth of 30% on a YTD basis. On the back of strong revenue performance EBITDA for the same period grew 70% YTD to be recorded at Rs506Mn. DTV Net Profit for 1H 2014, driven by growth in EBITDA was recorded at Rs222Mn, compared to a Net Profit of Rs10Mn posted for the corresponding period in 2013. The company’s Pay TV subscriber base grew by over 102,000 subscribers YoY to be recorded at 390,000 as at end Q2 2014.

Dialog Broadband Networks (DBN) featuring the Group’s Fixed Telecommunications and
Broadband Business recorded revenue of Rs3.0Bn for 1H 2014, representing an increase of 2% YTD. Following the expiration of VAT credits recognised during the previous year, DBN EBITDA contracted 41% YTD to reach Rs507Mn. DBN’s Net Loss for 1H 2014 was recorded at
Rs655Mn relative to the Net Loss of Rs97Mn in the corresponding period of 2013. Negative
movement in NPAT performance was underpinned by the decline in EBITDA in combine with the increase in depreciation stemming from Fixed 4G LTE related investments.

Group capital expenditure for Q2 2014 amounted to Rs2.5Bn and was focused on coverage and capacity expansion alongside the extension of the Group’s Optical Fibre Network. Group Free Cash Flow (FCF) was recorded at Rs2.5Bn for Q2 2014 on the back of improved EBITDA and lower Capex spend during the quarter. The Dialog Group continued to maintain a structurally robust balance sheet with the Net Debt to EBITDA ratio at Group level being maintained at 1.20x as at end of June 2014.

Hayleys ups revenue by 17% in 1Q 2014/15 - Maintains Growth Momentum

Sri Lankan stocks up for 3rd session; hovers near 3-yr high

(Reuters) - Sri Lankan stocks rose to a near three-year closing high on Friday as hopes of a policy rate cut and further fall in interest rates led investors to snap up banking and diversified shares amid continued buying by foreign investors.

The main stock index edged up 0.15 percent, or 10.05 points to 6,918.23, its highest close since September 13, 2011. It has risen 17 percent so far this year.

"The market continued its run on low interest rates, good results and continued foreign buying," said a stockbroker requesting not to be named.

Foreign investors bought a net 346.6 million rupees worth of shares on Friday, extending the year-to-date net foreign inflow to 12.03 billion rupees.

Turnover was 1.58 billion rupees ($12.14 million), more than this year's daily average of about 1.11 billion rupees.

Stockbrokers said investors had "no option" but to buy into stocks due to low interest rates as the market is expecting another rate cut during the Aug. 15 policy rate announcement.

Central bank chief Ajith Nivard Cabraal on Thursday said there was a greater chance of a cut, rather than a hike, in key policy rates, a day after yields on one-year government debt fell, below the rate of 6.50 percent at which the central bank mops up liquidity from commercial banks.

Hopes over strong earnings, declining interest rates and continued buying by foreign investors have helped boost interest in risky assets in the $22 billion-worth stock market.

Gains were led by Distilleries Company of Sri Lanka Plc which rose 2.99 percent to 210.90 rupees a share while DFCC Bank rose 2.51 percent 175.40 rupees.

The index has been in the overbought region since July 3, as local investors moved funds from fixed income to riskier assets such as shares because of low interest rates and foreign buying. 

(1 US dollar = 130.1700 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

Sri Lanka stocks close up 0.1-pct

Aug 08, 2014 (LBO) - Sri Lanka's stocks closed 0.15 percent higher with Distilleries gaining amid strong foreign buying, brokers said.

The Colombo benchmark All Share Price Index closed 10.05 points higher at 6,918.23, up 0.15percent. The S&P SL20 closed 11.84 points higher at 3,801.87, up 0.31 percent.

Turnover was 1.58 billion rupees, down from 2.24 billion rupees a day earlier with 112 stocks closed positive against 84 negative.

Access Engineering closed 50 cents higher at 27.50 rupees with an off-market transaction of 62.64 million rupees changing hands at 27.50 rupees per share contributing 4 percent of the daily turnover.

The aggregate value of all off-the-floor deals represented only 8 percent of the turnover.

John Keells Holdings closed 80 cents lower at 239.20 rupees with market transactions of 174.03 million rupees contributing 11 percent of the turnover.

JKH’s W0022 warrants closed 1.00 rupee lower at 71.00 rupees and its W0023 warrants closed 2.00 rupees lower at 77.00 rupees.

Central Investments and Finance closed 10 cents lower at 2.50 rupees, attracting most number of trades during the day.

Foreign investors bought 471.37 million rupees worth shares while selling 124.72 million rupees worth shares.

Distilleries closed 5.90 rupees higher at 210.90 rupees, contributing most to the index gain.

DFCC Bank closed 4.30 rupees higher at 175.40 rupees and Lanka Orix Finance closed 20 cents higher at 4.30 rupees.

Ceylon Tobacco Company closed 9.10 rupees lower at 1,150.20 rupees and Lion Brewery Ceylon closed 9.80 rupees lower at 614.00 rupees.

Nestlé Lanka posts Rs 976 m net profit for Q2

Nestlé Lanka PLC recorded a revenue growth of 7.1% (YoY) for Q2 2014, posting a total revenue of Rs 8.1 billion in the second quarter of the year.

The Company announced a net profit of Rs 976 million for the quarter benefitting from stable currency and commodity prices.

The second quarter for the year 2014 saw Nestlé continue to uphold its commitment as a leader in nutrition, health and wellness by fortifying its Maggi Chicken noodles and Maggi Curry noodles with Vitamin A, in celebration of the brand's 30th anniversary. Nestlé Lanka further enhanced its product portfolio with the launch of Nescafé Alegria, 'Café style coffee made magically simple'; a coffee solution which offers an authentic, premium barista coffee experience with the simplicity, convenience and speed of a classic coffee machine.

Nestlé also continued to remain steadfast to its commitment of creating shared value in Q2. Nescafé Alegria, geared to add significant value to our existing portfolio. Despite continuous challenges in the marketplace, Nestlé Lanka has been successful in maintaining a good revenue growth and consolidating its position as a leader in Nutrition, Health and Wellness in the country.

We remain cautiously optimistic while continuing our efforts to maintain our growth and performance for the remainder of the year," said Ganesan Ampalavanar, Managing Director of Nestlé Lanka PLC.
www.dailynews.lk

Adam Investments exits from PC Pharma

Adam Investments Ltd. yesterday exited from its recent investment PC Pharma Plc.

The company said it sold a 31% stake amounting to 31.46 million shares at prices ranging from Rs. 2.10 per share to Rs. 2.90 per share.

In early July, Adam Investments bought a 5.4% stake in PC Pharma at Rs. 1.90 per share and a 26% stake in late June at a price ranging between Rs. 1.20 and Rs. 1.60. Most of the selling then came from British American Technologies.

Market sources believe yesterday PC Pharma shares were collected by a large number of retailers and select high net worth investors. Overall 46.8 million PC Pharma shares changed hands via 653 trades for Rs. 107.3 million.

In the first nine months of FY14, PC Pharma made a Rs. 102 million loss and had retained loss of Rs. 71.5 million.
www.ft.lk

DFCC’s Rs. 5 b debentures snapped up

DFCC Bank’s Rs. 5 billion debenture issue yesterday closed on its official opening day itself following an oversubscription.

The bank said it has received applications for over Rs. 5 billion and the issue closed yesterday whilst the basis of allotment will be notified in due course.

The issue involved 30 million senior, unsecured, redeemable, rated debentures of Rs. 100 each with an option issue a further 20 million debentures in the event of an oversubscription of the original amount.

Rated AA- by Fitch Ratings, this public issue was attractively structured giving investors the opportunity to select between three options for receiving interest: 8.50% payable annually; 8.33% payable semi annually and 8.24% payable quarterly.

The funds raised from this Issue will be utilised for the medium to long term lending activities of the bank, whilst mitigating DFCC’s interest rate risk by reducing maturity mismatches. In addition it will supplement the diversification of the borrowing base and further strengthen the SME loan portfolio through the ability to offer fixed rates of interest.

DFCC said the decision to go public with this Issue was to provide retail and institutional investors with an alternative investment opportunity to earn a fixed rate of interest at their chosen frequency of payment.

The issue was structured by the Long Term Funding and Capital Markets Division of the bank and managed by Capital Alliance Partners Ltd., while the Registrar to the issue is SSP Corporate Services Ltd.
www.ft.lk

Touchwood’s bank balance is a paltry Rs. 3,000!

* CEO fails to submit key documents; asks for more time

* Amidst protest and objections, parties agreed to get the case called again on 27 August

* Commercial High Court of Colombo Judge insists no more extensions

The case concerning the winding-up of troubled Touchwood Investments Plc came up yesterday and the Commercial High Court was told that the company’s bank balance had only a paltry Rs. 3,000.

This was revealed in the course of the proceedings where Touchwood CEO Lanka Kiwlegedara and the liquidator were present and legally represented.

On the last occasion when the case was called in Court Judge Amendra Seneviratne ordered the CEO of the company being wound-up CEO to be present in Court on 7 August and to handover all the documents pertaining to the assets of the company on or before the said date.

Even though the CEO of the company was present in Court on 7 August no documents had been submitted to the liquidator before then and no documents pertaining to the assets of the company were submitted or filed in Court on the said date.

Counsel appearing for the CEO and company Nihal Fernando P.C. submitted that the present CEO had only been appointed to the company after the winding-up petition was filed in Court and therefore he is not fully aware of certain assets and documents of the company.

Counsel further stated that the CEO would be willing to assist the liquidator in the process of liquidation and if necessary to travel to the Agarwood plantation in Thailand with the liquidator.

Counsel for the company further stated than at least one month more would be required to locate the documents, books and statement of affairs of the company and handover the same to the liquidator.

Counsel for the Petitioner Avindra Rodrigo objected to any more time being granted to handover the Statement of Affairs and other documents to the liquidator stating that the company already had two months since the date of the winding-up Order to locate and handover the documents and further time would only delay proceedings.

Counsel also stated that the CEO was absconding from the date of the Order and has failed to give any documents of the assets of the company to the liquidator. Counsel also stated that even though two months have lapsed since the Order not a single document has been handed over to the liquidator.

Upon inquiry from Court Counsel, for the liquidator and the liquidator himself confirmed this position. Liquidator addressed Court and further stated that up to date the company had only handed over the details of the local bank accounts of the company and further stated that the bank accounts of the company have a total of Rs. 3,000. It was further stated when the liquidator visited the company premises on 15 June the company and its CEO undertook to handover all the documents, assets, deeds, etc. of the company in two days from then.

As sufficient time had already been given to the company to handover the documents and assets of the company, Counsel for the Petitioner Rodrigo objected to the requests made by the Counsel for the company to grant further time.

Judge too questioned the need for further time as the winding-up has been significantly delayed due to Company’s failure to honour their statutory obligations. Court suggested to the Counsel of the company to list down the documents that will be handed over to the liquidator on 8 August to which the Counsel for the Petitioner could not agree due to difficulties in locating all the documents, etc.

Amidst protest and objections, parties agreed to get the case called on 27 August and Court ordered the company to handover all the documents pertaining to the assets of the company, books, title deeds to the liquidator on or before 5 p.m. on 25 August. Court further stated that no more extensions will be granted on 27 August for the company to handover all of its documents, books, title deeds, etc. to the liquidator.
www.ft.lk

Textured Jersey 1Q FY15 profits drop on temporary slowdown; recovery already on track

Textured Jersey Lanka PLC (TJL) yesterday reported a top line of Rs. 2.7 b for the quarter ended 30 June (1Q FY2014/15), 7% lower than that of last year.

According to Bill Lam, Chairman of Textured Jersey, as cautioned in the last review, the main reason for this was the spill-over effects of the temporary slowdown in the US demand due to abnormal weather in the early part of the calendar year.

He further stated that the drop in volumes had a compounding effect on the bottom line, contributing to a 32% year-on-year drop in net profit to Rs. 164 m for 1Q FY2014/15. 

However, demand from the US has already recovered and TJL expects its original performance trajectory to regain momentum in the coming quarters.

During the quarter under review, as a result of the drop in sales volumes, gross profit came in at Rs. 219 m, representing a margin of 8.2%, compared to 12.1% in the corresponding quarter of last year. The cascading effect of the reduced gross profit resulted in operating profit for the quarter reducing to Rs. 123 m compared to Rs. 228 m during the same period of last year. This was despite administrative and distribution expenses reducing by 18% year-on-year to Rs. 107 m for 1Q FY2014/15.

TJL’s strong cash generation ability enabled the company to maintain its near debt free balance sheet as at the quarter end, with a strong net cash position of Rs. 1.86 b, up 5% from a year before. However, owing to lower interest rates and exchange rate fluctuations during the period, net finance income for 1Q FY2014/15 was Rs. 17.6 m, 26% lower than that of last year. According to Lam, the combination of the net finance income and Rs. 20.6 m of non-operating income consisting of the technical service fees from Ocean India brought the net profit for the period to Rs. 164 m, still 32% lower than the corresponding period of last year.

Lam concluded by stating that with the US demand back on track, combined with the 10-12% capacity additions and the savings from the multi-fuel boiler plant, TJL should be able to regain its growth momentum and continuously add value to the shareholders in the upcoming quarters.
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NDB Capital’s new moves get shareholder nod

NDB Capital Holdings (NCAP) yesterday announced that two special resolutions were approved in the Extraordinary General Meeting (EGM) held.

Special Resolution 1: Approval for the ordinary shares of the company to be de-listed from the official list of the Colombo Stock Exchange (CSE) and to be purchased by National Development Bank (NDB) at a price of Rs.600 per share from shareholders who may wish to divest of their shareholding

Special Resolution 2: Approval for the company name to be changed from NCAP to NDB Capital Holdings Limited.
www.ft.lk

Corporate results update

Nestle Lanka (NEST) reported a net profit of Rs.976m for 2Q2014 (+24% YoY), resulting in a net profit of Rs.2,079m for 1H2014 (+22% YoY)

Commercial Development Company (COMD) reported a net profit of Rs.31m for 2Q2014 (+11% YoY), resulting in a net profit of Rs.52m for 1H2014 (+2% YoY)

Access Engineering (AEL) reported a net profit of Rs.545m for 1Q15 (down 2% YoY)
Serendib Hotels (SHOT) reported a net loss of -Rs.0.7m for 1Q15 (vs. a net loss of -Rs.65m for 1Q14)

Dolphin Hotels (STAF) reported a net profit of Rs.16m for 1Q15 (vs. a net loss of -Rs.19m for 1Q14)

Sathosa Motors (SMOT) reported a net profit of Rs.36m for 1Q15 (down 26% YoY) 

CIC Holdings (CIC) reported a net profit of Rs.156m for 1Q15 (vs. a net loss of -Rs.75m for 1Q14)

HNB Assurance (HASU) reported a net profit of Rs.54m for 2Q2014 (down 1% YoY), resulting in a net profit of Rs.108m for 1H2014 (up 3% YoY)
Source: CT CLSA Securities
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Record 1Q for SUN with Rs. 326 m profit

Sunshine Holdings PLC has reported PAT of LKR 326 million for the quarter ending 30 June 2014 (1QFY15), up 161.0% YoY compared to LKR 125 million in the same quarter last year. 

Reported top line stood at LKR 4.0 billion in 1QFY15, compared to LKR 3.5 billion in 1QFY14, up 14.7% YoY. EPS was LKR 1.03 for 1QFY15, up 110.5% YoY.

EBIT margin saw a significant improvement in 1QFY15, up to 10.9% against 6.0% in the same quarter last year. The growth in both revenue and profitability mainly stems from the group’s Agri sector, especially due to the improvement in its tea plantations.

Profit to equity holders (PATMI) is up 111.3% YoY to LKR 138 million in 1QFY15, and PAT grew 161.0% YoY. Majority of the growth in PAT is on account of the strong performance of the Agri sector which has a limited impact at the PATMI level due to low effective holding. But Vish Govindasamy, Group Managing Director of SUN, emphasised that the 

Healthcare sector is still the largest contributor to PAT in 1QFY15 with LKR74 million, which represents 53.9% of total PATMI.

Net Asset Value per share increased to LKR 37.32 as at end 1QFY15, compared to LKR 36.23 at the beginning of the year (FY14). It stood at LKR 35.29 at the end of 1QFY14.

Business segments:
Healthcare
Healthcare remains the largest contributor to group PATMI with reported PAT of LKR74m in 1QFY15, contracting 5.1% YoY and representing 53.9% of total group PATMI. Revenue amounted to LKR 1.4 billion in 1QFY15 up 4.1% YoY. This represents 35.5% of total group revenue. Growth in Healthcare revenue is similar to what was seen during FY14, and the healthcare sector in Sri Lanka (Pharma), which only grew 2.1% YoY for FY14, as reported by IMS. The retail segment, represented by Healthguard Pharmacies grew 12.3% YoY in 1QFY15. The growth was mainly driven by two new outlets in Thalawathugoda and Orion City opened during FY14. Healthguard opened another new outlet in Ethul Kotte in Mid-June. This outlet will start contributing to the top line from 2QFY15 onwards.

The segment witnessed a slight contraction in PAT margins to 7.8% in 1QFY15 from 8.6% in the same quarter last year. This is largely due to the increase in staff related costs (up 4.1% YoY).


Agri business
The Agri sector with revenues of LKR1.9bn in 1QFY15, up 25.0% YoY, contributed 47.2% of the total group revenue. Management attributes the strong topline growth mainly to its tea segment which saw higher volumes aided by favorable weather, and increased quantities of bought crop. Palm Oil volumes (+1.2% YoY) remained steady during 1QFY15.

PAT for the quarter amounted to LKR231m in 1QFY15, against LKR 11 m in the same quarter last year. The growth in PAT, which is close to 20x is attributed to the profitability of the tea segment which benefited from favorable weather conditions, and buoyant market prices for its teas. It should be noted that 1QFY14 was an exceptionally poor quarter for WATA due to the impact of heavy rains and floods, in a wage impact year.

Nevertheless, the Palm Oil segment which made LKR185m PAT for 1QFY15, continued to be the largest contributor with 80.1% of WATA PAT coming from the Palm Oil.

FMCGThe FMCG sector reported revenues of LKR 589 million in 1QFY15, up 11.6% YoY, on the back of both volume and price growth. The sector accounts for 14.8% of group revenue for the quarter. The branded tea business within FMCG sold 0.6m kgs of branded tea, up 5.4% YoY, primarily driven by their premium brand ‘Zesta’. The division also markets edible oil under the ‘Oliate’ brand and bottled water under ‘Zest’ brand.

PAT from the FMCG segment contracted 46.5% YoY to stand at LKR 29 million in 1QFY15, with margin of 4.9% in 1QFY15, compared to 10.3% in the same period last year. The dip in profitability came in the back of an increase in both Admin (+ 55.5% YoY), and Selling & Distribution (+27.2% YoY). Management believes that passing the total cost increase to its customers will negatively impact the sustainability of the volume growth, and hence decided to absorb a major part of it, given its long term growth goals.

Other
Packaging revenues amounted to LKR 84 million, up 52.7% YoY in 1QFY15, on the back of new orders. As opposed to same quarter last year, the metal packaging company was able to attract new orders from 2 giant confectionary producers in Sri Lanka. The packaging company managed to break-even during 1QFY15 with a PAT of LKR39k, against a loss of (LKR7m) in the same quarter last year. The improvement in margin was due to higher capacity utilisation.

Revenue for the Renewable energy division witnessed a dip of 44.4% YoY to LKR15m in 1QFY15 due to low rainfall during the period. The mini-hydro plant, which is in its second year of operation made a negative PAT of (LKR6m), due to lower revenue, as majority of the cost is fixed.

Outlook
For FY15, we expect revenue growth to be largely driven by our core business segments. Our Healthcare segment will focus on aggressively growing its Wellness brands business. The group also expects more traction from the new products which were introduced during FY14. We also plan to expand our healthcare retail sub segment by adding another two stores to the chain. In FMCG, we are bullish on our bottom of the pyramid strategy, in which we target to convert the unbranded tea consumers with our ‘Ran Tea’ brand. This segment is estimated to consume approx. 14 million kgs a year. We will continue to expand our edible oil and bottled water business.

Agri growth will mainly be driven by the palm oil segment, in which we intend to further increase the yield through good agri practice. In our road map towards 10MW, the group plans to add another two mini-hydro plants with a combined capacity of 5MW, at a cost of LKR 1.2 billion. The two projects are currently pending its PPA’s from the CEB.
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