Amãna Takaful's 9 Months PAT up by 36%.

Composite Insurer - Amãna Takaful PLC, recorded a profit of Rs. 24.8 million for the period of nine months for the financial year ending 30 September 2014. The company recorded a 36% increase in profit after tax and 15% growth of total revenue over the same period of the previous year. At group level, the consolidated profits grew by 13% while the profits of Rs. 56.9 million were attributable to the equity holders of the parent company, growing by 27% in comparison to the previous year.

The Life segment of the company outperformed the industry in terms of Gross Written Premium and grew by 26% over the period under comparison, supporting the company's growth, despite revenue of the General segment remaining flat. This performance enabled Amãna Takaful to increase its market share in the Life industry, while securing its position in the overall industry.

Fazal Ghaffoor, CEO, Amãna Takaful stated, "The healthy trend in the General Insurance industry, following the post war years, has been stifled significantly in 2014 to just under 2%. With Motor insurance accounting for almost two-thirds of the industry portfolio, price cutting in this class continues unabated, adversely affecting GWP growth. Furthermore, claims servicing costs and repairs continue to escalate. I believe that some sanity and floor-prices need to be implemented in a timely manner to address this issue."

The company, with prudent treasury management strategies generated an investment income of Rs. 182 million, which was 87% over the same period last year. This increase supported the profitability of the company and the group.

Amãna Takaful PLC, the only fully-fledged Takaful operator in Sri Lanka recently opened its 27th branch in Muttur, in the Eastern Province. Having further identified the increased health needs of people, Amãna Takaful recently launched 'Suwasiri' a medical insurance product with hospitalization benefits of up to Rs. 100,000/- per person. This new insurance cover was launched in September 2014 to meet the growing needs of the mass market.
www.island.lk

Sri Lankan stocks end higher, erasing early losses

Nov 20 (Reuters) - Sri Lankan stocks erased earlier losses and ended firmer on Thursday, led by diversified and food and beverage shares.

Continued foreign buying, low interest rates and hopes of better corporate earnings also helped boost investor sentiment, traders said.

The main stock index rose 0.07 percent, or 5.23 points, to 7,530.33.

"Profit-taking was there in the morning but the bourse ended positive with some bargain hunters grabbing the opportunity towards the latter part of the day," said Dimantha Mathew, manager research at First Capital Equities (Pvt) Ltd.

Analysts said they expect the market to be volatile before the next rally.

Investors were awaiting to see the direction of the market after Sri Lankan President Mahinda Rajapaksa declared a snap election in January, aiming for an unprecedented third term, analysts said.

The Central Bank of Sri Lanka kept key policy rates steady at record lows for a 10th straight month, and said stable inflation and steady credit expansion should help the economy grow by around 8 percent over this year and next.

Turnover was 1.69 billion rupees ($12.91 million), exchange data showed, more than this year's daily average of 1.44 billion rupees.

Foreign investors were net buyers of 365.9 million rupees worth of shares, extending net foreign buying so far this year to 18.94 billion rupees, exchange data showed.

Shares in Nestle Lanka Plc rose 4.82 percent to 2,236.00 rupees, leading overall gains, while conglomerate John Keells Holdings Plc rose 0.55 percent to 254.50 rupees. 

($1 = 130.9500 Sri Lankan rupee) 

(Reporting by Ranga Sirilal; Editing by Anand Basu)

Sri Lanka stocks close higher

Nov 20, 2014 (LBO) - Sri Lanka's stocks closed 0.07 percent higher with the price gains in Nestle Lanka, brokers said.

The Colombo benchmark All Share Price Index closed 5.23 points higher at 7,530.33, up 0.07 percent.

The S&P SL20 closed 2.12 points higher at 4,190.93, up 0.05 percent.

Turnover was 1.69 billion rupees, down from 1.83 billion rupees a day earlier with 92 stocks closed positive against 94 negative.

The aggregate value of all off-the-floor deals only represented 5 percent of the daily turnover.

Piramal Glass Ceylon closed 10 cents higher at 5.20 rupees, attracting most number of trades during the day.

Foreign investors bought 426.38 million rupees worth shares while selling 60.43 million rupees worth shares.

Nestle Lanka closed 102.90 rupees higher at 2,236.00 rupees, contributing most to the index gain.

Ceylon Tobacco Company closed 30.00 rupees lower at 1,101.00 rupees.

$45bn worth ITC Group’s investment in SL spurred by Indian authorities

By Sanath Nanayakkare

Economic Development Minister Basil Rajapaksa, Investment Promotion Minister Luxman Yapa Abeywardene and ITC Chairman Y.C. Deveshwar view a model of the ITC Colombo One—the luxury hotel and residences to be built overlooking the Galle face Green, Colombo. - Pic by Dharmasena Weliwita

‘We were encouraged by Indian authorities at the highest level to make a significant investment in Sri Lanka and that is one of the reasons we have decided to make an outlay of US $300 million in our maiden overseas foray in the hospitality sector, Y.C. Deveshwar, Chairman ITC Ltd. said in Colombo yesterday.

Deveshwar who heads ITC businesses in India with a market cap of over $45 billion said so while speaking at the groundbreaking ceremony of the ITC Colombo One—the iconic luxury hotel and residences, overlooking the Galle Face Green.

"Ruchir Sharma of Morgan Stanley Investment Management said in his book titled ‘Breakout Nations’ that Sri Lanka would be another economic miracle in the world. It was another factor that motivated us to invest in Sri Lanka, he revealed.

The ITC Colombo 1 is likely to offer about 350 rooms in the first phase with more than 130 luxury residences, world class banqueting and cuisine experiences.

The conglomerate’s businesses span consumer goods, hotels, paperboards, paper and packaging, agri- business and information technology.

The groundbreaking event was attended by Basil Rajapaksa, Minister for Economic Development and Y. K. Sinha, High Commissioner for India in Sri Lanka.

Investment Promotion Minister Lakshman Yapa Abeywardena and Army Commander Lieutenant General R M Daya Ratnayake were also among those present on the occasion.

"In fact, when I first visited Sri Lanka in the late 70s, an idea conceived in me to make an investment in Sri Lanka, but it wasn’t possible as there were restrictions on both ends," Deveshwar mentioned.

Commenting on the ITC Colombo 1 project, Deveshwar added, " This is Indian multi-business enterprise ITC’s tribute to the glorious and rich heritage of Sri Lanka. It will contribute to the prosperity and sustainable development of Sri Lanka. India and Sri Lanka have shared a common heritage in the subcontinent and have generations of rich socio-cultural ties. I am sure that this landmark hotel will add a jewel to the crown of Sri Lanka’s hospitality sector."

"ITC Hotels with a collection of more than 100 hotels in over 70 destinations in India have redefined the fine art of hospitality. They offer unique indigenous experiences, internationally acclaimed cuisine and spas, with globally benchmarked standards in accommodation, environment and guest safety. Inspired by ITC’s triple bottom-line philosophy of creating economic, environmental and social capital, ITC’s hotels business is committed to delivering luxury experiences with sustainable practices embedded in the premise of ‘Responsible Luxury’."

Deveshwar also stressed that the warm welcome of Sri Lankans served as a motivating factor to invest in Sri Lanka.

ITC Hotels is India’s largest luxury hotel chain and is a part of ITC Limited, a leading diversified enterprise in India. ITC Hotels has set ‘global benchmarks in its services, integrating personalization with state-of-the-art technology to deliver planet positive luxury experiences to its guests.’
www.island.lk

Fitch rates Hatton National Bank’s Senior Debt Final ‘AA-(lka)’

Fitch Ratings Lanka has assigned Hatton National Bank PLC’s (HNB; AA-(lka)/Stable) proposed senior debentures of up to LKR4bn a final National Long-Term Rating of ‘AA-(lka)’.

The assignment of the final rating follows the receipt of final documents that conform to information previously received. The final rating is at the same level as the expected rating assigned on 17 September 2014.

The debentures, which are to have tenors of three, five and 10 years and carry fixed coupons, are to be listed on the Colombo Stock Exchange. HNB expects to use the proceeds to reduce asset and liability maturity mismatches.

The debentures are rated at the same level as HNB’s National Long-Term Rating in accordance with Fitch’s criteria as they constitute unsecured and unsubordinated obligations of the bank.

HNB’s rating reflects its long operating history, strong franchise, satisfactory capitalisation and relatively higher risk appetite.

The ratings on the debentures will move in tandem with HNB’s National Long-Term Rating.

A full list of HNB’s ratings follows:

National Long-Term Rating: ‘AA-(lka)’; Stable Outlook

Outstanding Sri Lanka rupee-denominated senior unsecured debentures: ‘AA-(lka)’

Proposed Sri Lanka rupee-denominated senior unsecured debentures: ‘AA-(lka)’

Outstanding subordinated debentures: ‘A+(lka)’
www.island.lk

MTD Walkers records outstanding performance for 1H 2014

With the vision to be at the forefront of infrastructure development in Sri Lanka, MTD Walkers PLC, a leading company for construction, manufacturing and engineering in Sri Lanka, recorded an impressive growth for the second quarter of FY 2014/2015.

Compared with its performance in the previous financial year, the turnover for the second quarter ended 30 September 2014 recorded a remarkable increase of 76.5% to Rs. 7.2 billion from Rs. 4.1 billion in the corresponding period last year.

In key performance indicators, the gross profit increased to Rs. 1.5 billion, a 62.9% increase from last year, while profit after tax grew 112.9% to Rs. 805 million, the company’s best performance yet.

“The reason for this outstanding performance is chiefly due to the significant growth in our construction business with several large scale contracts being awarded to our civil engineering subsidiaries where the revenue has increased by 76.8% in the second quarter comparative to the second quarter of last year. The operating profit also improved due to the usage of effective cost management techniques at site and at an administration level. 

The cost of borrowings has also reduced due to the Group’s active efforts on reducing its interest rates on borrowings by keeping in line with reducing market rates. Our future focus will be to manage debtors by effectively improving the collection cycle, which will add to the bottom line,” said MTD Walkers Group Chief Financial Officer Viraj de Silva.

In other key financial indicators, the net finance cost was Rs. 264 million for the period under review and considering that last year’s total net finance income was Rs. 287 million, the company anticipates a further reduction in the finance cost by the end of the financial year.

The exceptional performance of the company has been reflected through a significant increase in its share price over the last few months. The share price was approximately Rs. 80 as at mid November from Rs. 34.90 reported as at 31 July 2014. Even at the current market price the company is seen to be of exceptional value to potential investors.

MTD Walkers PLC also recently announced a rights issue at Rs. 45 to acquire Wincon Development Ceylon Ltd., a property development company which has constructed 1,088 affordable housing units in the Galle District. The first project consists of 512 housing units in Wakunugoda and the second of 576 units in Habaraduwa which will be ready for sale by the end of December 2014.

The company’s civil engineering subsidiary CML-MTD Construction is also one of the five contractors that have been awarded a portion of the Northern Highway (approximately 17km) at an estimated contract value of over Rs. 40 billion and construction is scheduled to commence in December 2014.

Its other civil engineering company Walker Piling Ltd. also had a very successful second quarter with a number of new projects being mobilised. Being the oldest piling company in Sri Lanka, it is currently in the process of increasing its fleet of piling rigs from six to 10 machines by the end of the third quarter.

De Silva further stated: “We have acquired a property in St. Michael’s Road, Colombo 3 to address the expansion needs of the Group companies and to build a new head office premises to house all our subsidiaries in one location, in order to attract the synergies of being a large Group.”
www.ft.lk

NSB profit soars to Rs. 6 b in 9 months

Savings giant NSB said yesterday it has recorded a profit before tax of Rs. 6 billion for the nine-month period ended 30 September 2014, a rise of 492% from Rs. 1 billion recorded in the corresponding period last year. Net profit recorded an increase of 679% to Rs. 3.5 billion from Rs. 445 million recorded in the same period last year.

The Bank mobilised Rs.45 billion deposits during the nine-month period, recording a growth of 7.5%. Savings deposits accounted for a large share in mobilisation, which is a significant improvement in the deposit mix of the bank. The deposit base of the bank stood at Rs. 539.9 billion as at 30 September.

Total assets grew by 11.5% to Rs. 729.4 billion as at 30 September 2014. The growth was mainly supported by the issuance of a $ 250 m bond in early September. The five-year bond was priced at a 5.15% yield, which was a significant milestone for the bank, having achieved the lowest yield by a Sri Lankan issuer.

Loans and advances to customers recorded a growth of 11.7% compared to industry growth of 5% during the period. Held-to-maturity financial assets, which mainly consist of Treasury bonds, grew by 14.9% to reach Rs. 496.9 billion.

Interest income increased by Rs. 8.6 billion to Rs. 54.6 billion, recording growth of 19%, while interest expenses increased marginally by 1.2% to Rs. 40.1 billion during the nine-month period from Rs. 39.7 billion recorded in the same period last year.

Higher growth of interest income and comparatively lower increase in interest cost contributed to increase net interest income by 128% to Rs. 14.5 billion by end of September 2014 from Rs. 6.4 billion recorded at the end of September 2013. This resulted in improving the net interest margin to 2.8% by the end of September 2014 from 1.6% recorded at the end of 2013.

Return on average assets (before tax) improved to 1.1% at 30 September 2014 from 0.4% recorded at the end of 2013. Return on average equity rose to 19.5% by the end of September 2014 from 5.1% recorded at the end of 2013. The cost-to-income ratio favourably improved to 45.3% by the end of September 2014 from 66.7% recorded at the end of 2013 and the improvement was mainly due to the increase in net interest income.

The bank’s capital strength was reflected in ratios that were well above the regulatory standards for well-capitalised banks, with a Tier 1 ratio of 17.6%, and total capital adequacy ratio of 15.99% at 30 September 2014. The bank’s liquidity ratio stood at 90.9% as at 30 September 2014.

The Group’s post-tax profit increased by 518% to Rs. 3.7 billion as at end September 2014 from Rs. 592 million recorded at the end of September 2013.

The bank introduced the ‘NSB Divi Surakum’ pension plan, catering to the financial needs of all senior citizens of the country and thereby ensuring a stable retired life by means of a pension which is imperative in furnishing better living standards for the nation.

‘NSB Divi Surakum’ will be a helping hand and an immense relief to many generations in the country; from the Sri Lankan senior citizens who desired financial independence during their retirement to the young who wish for a secure retired life in the future.

Emphasising on the rural economic development, the bank introduced a ‘loan cluster’ in September 2014, which comprised of loans for small and medium scale entrepreneurs and promotion of pawning, which has supported financial inclusion.
www.ft.lk

Access Engineering in Public-Private Partnership to construct housing for public sector

The Urban Development Authority recently awarded a contract to Access Engineering PLC for the construction of 608 residential housing units for State sector employees.

The project, which is executed by the Urban Development Authority, is a result of the Government’s initiative to make housing more accessible to the public sector in Sri Lanka.

Scheduled for completion in November 2017, the project has generated wide interest with calling of applications being advertised.

This design-build contract between the Government of Sri Lanka and Access Engineering PLC is considered to be the first Public-Private Partnership initiative undertaken after 25 years to encourage the contribution of the private sector to be more involved in public sector housing.

The contract award includes investigation, design and construction of two buildings of 23 storeys that accommodate 608 residential housing units and 456 parking lots in a 2.5 acre land in Borella. The complex will comprise two and three bedroom apartments along with arranged spaces for living, pantry and modern bathroom facilities.

Keeping abreast of the green and clean Urban Development concept adopted within the city, these residential buildings will include children’s play areas, sports facilities, etc., to promote an active lifestyle within the complex.

Access Engineering PLC recently completed and handed over 1,137 housing units at Henamulla and already commenced wok on the second project comprising a further 941 housing units under the program of relocating underserved settlements in Colombo, executed by the Urban Development Authority and Ministry of Defence.
www.ft.lk

Dinal buys 13% stake in Central Industries; Sierra Cables exits

Dinal Wijemanne has on Tuesday bought a 13.12% stake in Central Industries Plc (CIND) for Rs. 103 million.

The acquisition was part of the 16% stake (1.574 million shares) of Central Industries sold by Sierra Cables Plc at day’s lowest price of Rs. 80 each. In total 1.969 million of CIND shares traded for Rs. 158.8 million.

Net asset per share of CIN at Company level is Rs. 102 and at Group level Rs. 105.Highest price of CIND in the six months ended in September was Rs. 84.50, lowest was Rs. 56.50 and closing price was Rs. 74.90.

Deals on CIND on Tuesday pushed its share price by 14.4% or Rs. 14.39 to close at Rs. 94.60 whilst it hit an intra-day high of Rs. 99. Yesterday the CIND closed down by Rs. 6.50 or 7% with mere 65,671 shares traded.

With Tuesday’s sale, Sierra Cables, which was the second largest shareholder, has exited Central Industries. However, Sierra Holdings Ltd. as per end September 2014 held a 1.8% stake as the eighth largest shareholder.

Central Finance Plc holds a 44.06% stake in Central Industries whilst related party CF Insurance Brokers hold 5.7%.
www.ft.lk