WATA posts LKR 409m PAT for 1HFY15, up 32% YoY, despite tough 3Q for tea

Watawala Plantations PLC (CSE: WATA) reported revenues of LKR5.3bn for the nine months ended 31 Dec 2014 (9MFY15), up 16.6% YoY. Net profit or PATfor 9MFY15 amounted to LKR409m, against LKR311m in the same period last year.WATA was able to post strong bottom line performance in a challenging environment for the plantation sector due to better than expected performance in Palm Oil.

Profit for the 3rd quarter (3QFY15) amounted to LKR147m, down 30.9% YoY due to challenges in the Tea sector which was adversely affected by heavy rains.

Palm Oil contributed LKR593m to the group bottom line in 9MFY15 which helped WATA to cover its losses in the tea and rubber sectors. Profit for3QFY15 alone amounted to LKR172m, agrowth of 23.2% YoY.

Revenue for 9MFY15 amounted to LKR1.2bn, up 9.1% YoY. The growth in revenue is attributed to 6.3% YoY increase in crop which amounted to 6.94m kg, and a19.9% YoY increase in NSA. The average NSA for 9MFY15 was LKR163 per kg. We attributes the increase in crop to better yield as a result of Good Agri Practices, and new fields yielding Fruit. Palm Oil revenue for 3QFY15 amounted to LKR404m, up 12.7% YoY.

Tea segment, the largest revenue contributor which accounted for over 67.9% of the total revenue, increased 22.4% YoY to LKR3.6bn in 9MFY15, mainly on the back of improved volumes. Weather conditions were favorable for tea during 1QFY15, but not so much in 2QFY15 and 3QFY15.For 9MFY15, own crop was up 7.6% to 4.98m kg, and bought crop increased 11.7% YoY to 2.96m kg. The NSA for 9MFY15 stood at LKR403 per kg, down 3.6% from same period last year. Instability in key export markets such as CIS, and the Middle East has put pressure on auction prices. For 9MFY15, the Tea segment had madea loss of(LKR210m), compared to a loss of (LKR197m) in 9MFY14.
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Asian Alliance Insurance PLC takes up 70 million shares from General Insurance

Asian Alliance Insurance PLC subscribed to and took up 70 million shares from its wholly owned subsidiary Asian Alliance General Insurance Limited at Rs. 10 per share.

This is to comply with Sri Lanka’s insurance industry amendment act.
www.adaderana.lk

Passikudah Beach Resorts legal proceedings settled amicably

Citrus Leisure PLC has amicable settled the legal proceedings before the Valaichennai District Courts against a predecessor in title of Passikudah Beach Resorts, a fully owned subsidiary of Citrus Leisure PLC.

According to the settlement entered into in courts, Citrus Leisure PLC has paid a sum of Rs. 80 million to the party which instituted legal proceedings.

Accordingly, the total consideration paid by Citrus Leisure PLC for the property at Passikudah amounts to Rs. 248,780,250. The current market value of the property as at 12 January 2015 is Rs. 317,500,000.
www.adaderana.lk

Sri Lanka shares rebound from 1-mth low close ahead of monetary policy

Jan 26 (Reuters) - Sri Lankan shares recovered on Monday from a one-month closing low hit in the previous session, but trading volume fell to a four-week low as investors awaited direction from the monetary policy and supplementary budget later this week.

The main stock index ended 0.54 percent or 39.45 points up, at 7,316.08, edging up from its lowest close since Dec. 24 hit on Friday.

The day's turnover was 338.2 million rupees, the lowest since Dec. 29 and less than a quarter of last year's daily average of 1.42 billion rupees, exchange data showed.

"People are waiting for the policies of the new government, the monetary policy and the budget," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

The central bank will unveil its first monetary policy under the new government on Tuesday and Finance Minister Ravi Karunanayake will announce a supplementary budget on Thursday.

President Maithripala Sirisena has pledged pay hikes for the state sector, reduction in the prices of 10 essential goods, and cuts in the cost of living through the budget.

Foreign investors were net buyers of 4.06 million rupees ($30,781) worth of shares on Monday. They bought a net 22.07 billion rupees worth of stocks last year.

The market has been on a downward trend, after hitting a near four-year high on Jan. 9, due to political concerns after the new government said it would hold parliamentary elections after April 23.

The reappointment of Thilak Karunaratne as the head of the market regulator also weighed on the index after the government said he would investigate suspect stock market deals. However, Karunaratne told Reuters he would not be "on a witch hunt".

Shares in top conglomerate John Keells Holdings Plc rose 2.29 percent, while Nestle Lanka Plc gained 3.59 percent, pushing the overall index up.

($1 = 131.9000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anupama Dwivedi)

Sri Lanka’s forex reserves down to US$8.3bn: Central bank

Jan 26, 2015 (LBO) - Sri Lanka's forex reserves fell to 8.3 billion US dollars in November 2014, down from 8.8 billion US dollars in October, Central Bank data showed.

The bank says the country has outflows on account of foreign debt service payments amounting to 2,054.2 million US dollars and IMF-SBA payments amounting to 704.4 million US dollars.

The Island’s foreign reserves were up in August 2014 at 9.2 billion US dollars amid weak credit growth and since then it was falling steadily as domestic credit picked up.

From January to November 2014, the balance of payment (BOP) is estimated to have recorded a surplus of 1,628.3 million US dollars compared to 581.7 million US dollars in the corresponding period of 2013.

The BOP for the eight months of January to August 2014 recorded a surplus of 2.1 billion US dollars data showed.

Ceybank Century Fund records 37% growth in 2014

Sri Lanka’s biggest ‘growth’ fund, Ceybank Century Growth Fund with net asset over Rs. 1,200 million, recorded a strong year, growing by 37% for the year 2014 exceeding the growth in benchmark All Share Index by 10.6%. The All Share Total Return Index recorded growth of 26.3% for 2014 driven by historical low interest rates that attracted increased investor participation. 

Commenting on the performance, Fund Manager Indika Rajakaruna noted the ‘Tactical asset allocation with increased exposure on growth sectors enabled the Fund to outperform the market in 2014’. He noted that the beginning of year 2014 which came with lots of uncertainty and lack of investor confidence challenged the asset allocation decisions.

However stabilisation of the interest rates at present levels improved the local investor sentiments that resulted in higher equity market activity levels during the year. Though the presidential elections and its outcome would have a temporary impact on the sentiments, Rajakaruna expects reduction of the energy prices in line with the fall in global oil prices, demand stimulating policy framework set out by the Government and continuation of reasonably lower interest rates would improve corporate earnings and the introduction of structural reforms to the economy would help to strengthen the investor sentiments on the medium term.

Rajakaruna went on to note that when investing in the equity market one may also need to take in to consideration the long term performance. “The average net return to an investor, who had invested in Ceybank Century Growth fund 10 years ago with reinvesting all the dividends would have been 20% p.a as at December 2014, much higher than the long term interest rates and inflation that prevailed during the same period.” He said. 

Therefore he proposes investors to look at a unit trust as a gateway to plan for long term financial needs of any individual, be it your retirement or your child’s education.

Ceybank AML CEO Chitra Sathkumara said, “Ceybank Century which is Sri Lanka’s first equity fund, has become the largest equity unit trust fund in the country, and has given 20% p.a. return to its investors over the last 10 years. When the financial markets are changing and interest rates have fallen to single digits, the Sri Lankan public cannot remain passive in their savings habits and have to look at other avenues of investments like Unit Trusts, and begin to assume both risks and rewards in this new investment environment. Equity Unit Trusts offer higher long term returns and risks are minimised through diversification.” Sathkumara further said, “Unit Trusts are a simple, cost effective investment product and public trust is created by strong, pro-investor regulation by the SEC which encouraged to take prudent risk.”

Ceybank Century Growth Fund is managed by the Ceybank Asset Management Ltd., one of pioneer asset management companies in Sri Lanka founded in 1991, backed by the shareholdings of Sri Lanka’s leading State-owned Bank of Ceylon, and Sri Lanka Insurance, Carson Cumberbatch PLC and Unit Trust of India. In addition to the Ceybank Century Growth fund, the company also manages four other funds catering to a wide spectrum of risk return needs of investors, with a balanced fund, a money market fund and two gilt edged funds.
www.ft.lk

First Capital Treasuries announces Rs. 500 m debenture issue

First Capital Treasuries Limited, a Primary Dealer licensed and appointed by the Central Bank of Sri Lanka and a subsidiary of First Capital Holdings PLC, has announced that it intends to issue subordinated, unsecured, redeemable debentures with a principal value of Rs. 500 million maturing in five years and bearing an interest rate of 9.5% per annum payable annually. The issue will open on Tuesday 27 January 2015. 

Debentures are priced at a face value of 100 each and will be listed on the Colombo Stock Exchange. The debenture issue is rated BBB+ while the issuer, First Capital Treasuries Limited, is rated A- by Lanka Rating Agency. First Capital Limited, the corporate debt structuring and placement arm of the group, will be managing the issue and Bank of Ceylon will act as Trustee to the issue.

First Capital Group Chief Executive Officer Dilshan Wirasekara said the company plans to utilise the funds raised through the debenture issue to achieve the following objectives;
Enhance the long term funding base of the company by way of tier 2 capital and increase capital adequacy, which will allow the company to grow its core business and allow further leverage on government securities whilst being well above the regulatory directives by Central Bank of Sri Lanka.

To minimise interest rate risk and liquidity risk by issuing fixed rate debentures for a period of five years, thereby reducing the maturity mismatch on the balance sheet.

First Capital Treasuries is licensed and appointed by the Central Bank of Sri Lanka to deal exclusively in government securities and currently stands at a commanding position as the leading non-bank Primary Dealer in the country. The company was incorporated in August 1982 and is the primary dealer arm of First Capital Holdings PLC, an investment bank pioneer in debt and equity markets.

Over the first half of the financial year 2014/15, First Capital Treasuries reported an increase in profits after tax from Rs. 673 million to Rs. 843 million. While the company declared dividends of Rs. 41 per share (Rs. 19 per share 2013/14) totalling Rs. 631 million to the shareholders during the period under review. Over the first half of the financial year 2014/2015 First Capital Holdings PLC reported a consolidated turnover of Rs. 1.7 billion and consolidated profit after tax of Rs. 868 million.

“We have done remarkably well during the current financial year and as the pioneer and leading non-bank Primary Dealer, we are extremely proud that we are the first Primary Dealer to offer a listed debenture to all our valued investors,” concluded Wirasekara.
For more details and to download the prospectus please visit: www.firstcapital.lk.
www.ft.lk

Pradeshiya Sanwardena Bank Rs. 2.5 b debenture issue oversubscribed

The Rs. 2.5 billion listed debenture issue of Pradeshiya Sanwardena Bank (RDB) has been oversubscribed and closed on Friday.

RDB intends to raise funds through this Debenture Issue to increase the Tier II Capital of RDB in order t maintain the Capital Adequacy requirements as stipulated by CBSL. The proceeds of the issue will be utilised for future expansion of RDB in terms of operations and asset base.

The issue offered 25 million unsecured subordinated redeemable five year debentures at Rs. 100 each. Three types of debentures were on offer for the investing public. Type A carried a fixed rate of Nine per centum (9.00%) per annum (before any tax) (Annual  Effective Rate of 9.00% on the principal sum); Type B offered a fixed rate of Eight point Eight One percent (8.81%) per annum (before any tax) payable biannually (Annual Effective Rate of 9.00%) and Type C- offered a fixed rate of Eight point Seven One percent (8.71%) per annum (before any Tax) payable quarterly (Annual Effective Rate of 9.00%)
The issue opened on 16 January 2015. By 22 January the issue had drawn applications requesting for 2.498 billion debentures. Final figure of oversubscription and basis of allotment will be announced shortly.

Type A had drawn 12 applications requesting for Rs. 2.137 billion debentures, Type B saw five applications requesting for Rs. 361 million worth of debentures and Type C drew four applications worth Rs. 130,000 worth of debentures.

Managers and Registrars to the Issue were Merchant Bank of Sri Lanka & Finance PLC, Corporate Advisory & Capital Markets Division.
www.ft.lk

Softlogic Finance goes for Rs. 400 m Rights

Softlogic Finance Plc plans to raise Rs. 401 million via a 10 for 28 rights issue priced at Rs. 30 each.

The company at present has 37,453,951 shares in issue and the Rights proportion of ten new ordinary shares for every 28 held will see issuance of 13,376,411 new ordinary shares.

Central Bank approval has been obtained for the Rights Issue which will be now subject to CSE and shareholder approval.

Funds raised will be used to expand the lending activities of Softlogic Finance and fulfill the capital adequacy requirements which have arisen as a result of the recent expansion of the business.
www.ft.lk

MTD Walkers’ Rs. 2.4 b Rights Issue oversubscribed

The Rs. 2.4 billion Rights Issue of MTD Walkers Plc was oversubscribed, comfortably drawing applications for over and above the number of shares offered under the rights.
MTD Walkers Plc issued 53,290,428 new ordinary voting shares in the ratio of 466 shares for every 1000 shares held by the existing ordinary voting shareholders at an issue price of Rs. 45 per share raising capital amounting slightly over Rs. 2,398 million. Consequently, MTD Walkers Plc’s ordinary voting shares increased to 167,647,568 shares. The subscription was closed on 22 January.

While the primary objective behind the rights issue was to raise funds to acquire 100% equity capital in Wincon Development Ceylon Ltd., the company intends to duly exploit this opportunity to finance its growing working capital requirements of the group from the excess funds received from the Rights Issue.

Speaking on the successful Rights Issue, the Executive Deputy Chairman of the group, Jehan Amaratunga, stated: “The overwhelming response to the Rights Issue demonstrates the confidence and trust placed on MTD Walkers Plc by our shareholders, which enables us to forge ahead with our growth plans. The Rights Issue has given us the opportunity to diversify the group operations and further advance as an infrastructure solutions provider following our commendable performance recorded this year so far. The trust and support displayed by our shareholders towards our strategic direction and future plans have been very encouraging.”

MTD Walkers Plc, with its subsidiary companies, CML-MTD Construction, Northern Power Company, Walkers Piling and Walker Sons and Co. Engineers, is engaged in multidisciplinary infrastructure activities locally and overseas. The acquisition of Wincon Development Ceylon Ltd. signals its foray into real estate and property development given its belief of future upside.
www.ft.lk