Taxes, re-structuring, exiting brewery hit Cargills profits in Q2

Cargills PLC, a subsidiary of CT Holdings, recorded losses for the group in its second quarter financial results amounting to Rs.144.2 million compared to the previous year’s figures that indicated profits at Rs.123.4 million during the same period. 

Cargills will be looking at furthering the dairy production as it continued to gain profitability growing by 8 per cent and in this respect would be eyeing an increase in volumes as well, the company stated. As part of its re-structuring decision, the company had accrued losses but were looking at ensuring profitability in the second half of 2014 and beyond. 

Exiting the soft alcohol sector had cost the company a loss of Rs.116 million for the quarter but recovery of these were expected upon the conclusion of the disposal of this investment, the company noted. (SD) 

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CT Holdings losses mount to Rs.191 mln

CT Holdings releasing its second quarter financial results stated it had recorded a group loss of Rs. 191 million compared to profits made during the same period last year. 

Group losses were recorded at Rs.191.3 million compared to a profit of Rs.144 million in the same period last year, the company stated. The group recorded a drop in profits with Gross Profit recorded at Rs.1.5 billion compared to Rs.1.6 billion during the same period last year. But group turnover was above last year by 8 per cent at Rs.16.07 billion. 

CT Holdings had taken initiatives to re-structure the retail sector by transferring operations and related assets to Cargills Food Company. During the second quarter of this year these were transferred to the subsidiary resulting in a one-off tax charge of Rs.101 million. 

The 25 per cent cap on VAT had also impacted on the company’s operating results in the retail sector, the company noted. 

FMCG sector performed well but was hampered by losses in the soft alcohol sector. The dairy sector had seen an investment of Rs.1.3 billion by the group during the past two years and commercial operations of brewery were scaled back during the last quarter due to the subsequent disposal of this operation. In the real estate sector, the group’s two malls namely Majestic City and the Jaffna Square were fully rented out, it was noted. 

Further the group has invested in a joint venture project currently implemented in Kotahena. In addition, CT Holdings has experienced low turnover from its restaurant business due to closure for refurbishments. On the other hand, it also opened two cinema screens at the newly refurbished Arcade Independence Square that comprises 3D viewing facilities and high quality seating. (SD) 

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Asia Capital lists 21.3 Mn shares

Asia Capital on Thursday listed the private placement of 21.3 million shares of the company by its Japanese investors. 

The company stated in a stock exchange filing that shares amounting to over 21.3 million were issued via a private placement and were listed on Thursday. 

Shares were sold at Rs.18 per share amounting to a total of approximately Rs.384 million. The shares were bought by the Japanese investors, brothers Mr. Yoshimichi Watanabe and Mr. Eiji Watanabe, the company stated. (SD)
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Govindasamy Ramanan in mandatory offer on Industrial Asphalt

People’s Merchant Bank Acting CEO/Managing Director Govindasamy Ramanan would be announcing a mandatory offer for Industrial Asphalts (Ceylon) PLC. 

This was announced to the Colombo Stock Exchange on Friday after Capital Trust Financial stated that Mr. Ramanan had bought 440, 914 shares of Industrial Asphalts on Thursday amounting to 66.15 per cent of the voting shares in issue. 

This resulted in Mr. Ramanan’s stake increasing to 66.32 per cent of the voting shares in issue. Shares were bought at Rs.201 per share. 

Mr. Ramanan making the announcement stated that he would be making the mandatory offer at an offer price of Rs.201 per share. Capital Trust Financial would be the managers to the offer. 

A corporate financial professional, Mr. Ramanan is currently the Managing Director / CEO of Capital Trust Financial and Capital Trust Wealth Management. (SD)

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Hybrids boost July vehicle registrations

Motor car registration figures for July show a significant increase with 2,551 registrations, compared to 2,256 in June and 2,305 year-on-year (yoy), with 827 brand new cars composing the figure, according to JB Securities’ market research.

“First signs of a major up tick in vehicle registrations, July numbers show a noticeable increase. It remains to be seen whether this is a monthly anomaly or signs of a trend reversal,” said JB Securities CEO Murtaza Jafferjee.

The increase was boosted by hybrid vehicles, which composed 1,942 of the 2,551 total registrations, up from 1,481 in June and 799 yoy.

Toyota led the green car wave with 1,006 pre-owned cars, from 837 in June and 465 yoy, while 106 of the 120 new hybrid registrations were also claimed by Toyota with 48 Axio Hybrid units registered compared to 14 the month before.

Honda kept to their second place in hybrid cars with 474 registrations compared to 454 in June and 323 yoy, while only claiming 6 new registrations.

Ten brand new Mercedes Benz S400 units and 2 preowned BMW Active Hybrids rounded up the luxury hybrid car category, while Honda dominated the SUV segment with a massive 328 new registrations of Honda Vezel, up from 90 in June and an almost 200 percent of its aggregate registrations of 172 until July.

Meanwhile the number of electric cars registered for July went up by just 1 compared to June.

“Electric cars were 11 units mainly Nissan Leaf. We are yet to see a Tesla import, it’s a great car,” Jafferjee noted.

He hopes the government does not increase tax rates on hybrids, as a sizable Rs.47 billion is collected as revenue each year.

“If one factors in total social cost due to better fuel efficiency, the taxation policy has been in the right direction. Nevertheless, I have a niggling feeling that the tax rate of 60 percent may go up,” said Jafferjee.

Meanwhile, brand new car registrations were led by Maruti Suzuki’s 351 units, up from 255 in June and 275 yoy; fuelled by 38 Celerios and followed by Toyota’s 175, from 82 in June and 65 yoy; with contributions by Axios and 59 Allion and Premios.

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Softlogic Finance AAA debenture draws Rs 4 bn

Softlogic Finance PLC said that its AAA rated Debenture received subscriptions of over Rs 4Billion on the opening day of its Issue of Rs 1.4Billion, and the issue was closed on the same day. The instrument that has been rated AAA by Ram Ratings (Lanka) Ltd, offered 14,000,000- redeemable, guaranteed debentures to the public at a face value of Rs 100- each and had received approval from the Colombo Stock Exchange. The issue opened for subscription on August 21, 2014, and saw substantial interest from an entire spectrum of Investors that included banks, insurance companies, institutional investors and retail investors.

A press release said: ‘The Debenture issue of Softlogic Finance was made in collaboration with GuarantCo who have guaranteed the instrument that also carries a Barclays Bank guarantee as part of GuarantCo’s structure. The Five Year Issue (2014/2019) offered attractive fixed and floating interest rates payable quarterly. The two options included; Option A –a fixed interest rate of 10% payable quarterly with an AER of 10.38% or Option B – based on a floating interest rate of three months net Treasury Bill + 1.50%, paid quarterly. The issue was managed by First Capital and legal counsel was provided by Nithya Partners. Trustees to the issue are Deutsche Bank AG and PW Corporate Secretarial are acting as registrars to the transaction.

‘The transaction is viewed by many as a ground breaking event, not only as a result of the AAA rating given to the issue, but also due to it paving the way towards more foreign participation in providing alternative solutions to developing the debt capital market in the country. Commenting on the successful culmination of the transaction Ashok Pathirage, Chairman, Softlogic Finance PLC said "We are very happy to have structured this landmark transaction that has received tremendous investor interest. We will continue to explore alternative means of funding that will be utilized to develop the very important SME sector of the country."

‘GuarantCo is owned by the PIDG members through the PIDG Trust and, in the case of DGIS, through FMO. The GuarantCo concept came from the Private Infrastructure Development Group ("PIDG") which is a multi-donor, member-managed organisation. Current PIDG members include: the UK Department for International Development ("DFID"), the Swiss State Secretariat for Economic Affairs ("SECO"), the Netherlands Ministry of Foreign Affairs ("DGIS"), the Swedish International Development Cooperation Agency ("Sida"), the World Bank, the Austrian Development Agency ("ADA"), Irish Aid, Kreditanstalt für Wiederaufbau ("KfW"), and the Australian Agency for International Development (AusAid).
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