Sri Lanka to get US$400mn from RBI tomorrow

COLOMBO (EconomyNext) – Sri Lanka’s Central Bank said it will get the first US 400 million dollar tranche in a currency swap with the Reserve Bank of India on Thursday, 30th April, 2015.

Another 1.1 billion US dollars has been approved by the Union Cabinet of the Indian government for augmenting the currency swap arrangement between the two Central Banks. 

“This additional amount is expected to be made available in due course,” a central bank statement said.

The currency swap facility was agreed on during the visit of Indian prime Minister Narendra Modi to Sri Lanka on 14th March, 2015.

The funds are from Reserve Bank of India’s financing facility for South Asian Association for Regional
Cooperation (SAARC) member country Central Banks.

Textured Jersey Lanka PLC recorded its highest ever annual net profit of Rs.1.3bn for the FY 2014/15

Textured Jersey Lanka PLC (TJL) recorded its highest ever annual net profit of Rs.1.3bn for the year ended 31st March 2015, an increase of 16% year on year. This result was achieved on the back of Rs. 512mn net profit for the quarter ended 31st March 2015, representing an impressive 46% year on year increase. The strong quarterly performance enabled the company to conclude the year with a record profit despite the slowdown in sales experienced in the early part of the year, attributed to unusual and extreme weather conditions in the United States. 

With demand from its main customers back on track, TJL reported a notable Rs.3.8bn in sales during 4Q FY2014/15, up 16% year on year. Improved demand conditions coupled with recently added capacity enabled TJL to optimize capacity utilisation and product mix to achieve gross profit margins of 15% for 4Q FY 2014/15 compared to 12% during the same quarter last year. This in turn allowed the company to increase its gross profit by 45% to Rs.583mn for 4Q FY2014/15 and drive its annual gross profit to Rs.1.6bn, up 11% compared to the year before. 

The strong performance at gross profit level allowed TJL to post an operating profit of approximately Rs.476mn for 4Q FY 2014/15, recording 52% year on year growth at the operating profit level. TJL’s annual operating profit for the year ended 31st March 2015 came in at Rs.1.2bn, 14% higher year on year. 

TJL continued to maintain its near debt-free balance sheet as at 31st March 2015, with a net cash position of Rs.1.9bn. Lower interest rates, combined with a marginally lower cash position versus a year before led to net finance income dropping to Rs.14mn for 4Q FY2014/15. The net finance income for the year ended 31st March 2015 came in at Rs.58mn, down 36% compared to the year before.

Despite the reduction in finance income, the quarter concluded with a net profit of Rs.512mn growing 46% year on year. The combined effect of added capacity and strong demand recovery in the latter part of the financial year coupled with solid cost and productivity management enabled TJL to report a record annual net profit of Rs.1.3bn for FY2014/15 despite challenges. 

Additionally, during the quarter TJL engaged Ernst & Young to carry out an independent valuation of Ocean India Private Limited and Quenby Lanka Prints Private Limited as a part of the initial discussions to further its acquisition plans. Additional updates will be provided on the outcome of these discussions in due course. 

Looking towards the future; recently enhanced capacity and strategic investments coming into fruition will place TJL on a solid growth platform for the coming year. As regional expansion plans move forward to secure TJL’s long term growth trajectory, the prospects of GSP Plus in the future would further augment TJL’s current momentum. 

Sri Lankan shares at over 8-wk closing high after reforms approved

(Reuters) - Sri Lankan shares edged up to their highest close in more than eight weeks on Wednesday, a day after the country's parliament overwhelmingly approved some diluted reforms, but concerns over political stability remained.

The parliament passed the reforms on Tuesday reducing some of the president's powers, in a move that did not go as far as President Maithripala Sirisena had promised but is nevertheless seen as a victory for the leader.

The main stock index ended up 0.55 percent at 7,173.37, its highest close since March 6. It has gained 3.95 percent since the central bank cut key rates on April 15, while yields on t-bills have fallen 41-51 basis points since then.

"Market is up on positive sentiment but people will be a little wary till the elections are over," said Reshan Kurukulasuriya, chief operating officer of Richard Pieris Securities (Pvt) Ltd.

The day's turnover was 974.7 million rupees ($7.33 million), compared with this year's daily average of around 1.06 billion rupees.

The market saw a net foreign inflow of 2.73 million rupees worth of shares on Wednesday, extending the net foreign inflow so far this year to 3.81 billion rupees.

Analysts said the market could be dull until the perception of political uncertainty is addressed and many investors were in a wait-and-watch mode before the parliamentary elections.

Shares of Carson Cumberbatch Plc jumped 4.17 percent, while C T Holdings Plc rose 0.08 percent.

Some analysts said the markets would stay volatile until parliamentary elections.

Investors have been cautious due to political uncertainty as Prime Minister Ranil Wickremesinghe's party does not have a majority in parliament and Sirisena promised to dissolve parliament after the end of his 100-day programme on April 23.

The index lost 6.6 percent last month, its biggest monthly drop since October 2012, as investors sold holdings to settle margin trades amid concerns about political stability and a rise in interest rates. 

($1 = 132.9000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)

Kalpitiya Beach Resort requested to postpone EGM

The Securities and Exchange Commission of Sri Lanka (SEC) yesterday requested Kalpitiya Beach Resort PLC to postpone the scheduled Extraordinary General Meeting (which was scheduled by the said Company in response to a Directive of the SEC) by another month from the date of scheduled EGM.   This was to enable the company to come up with a precise direction on the future course of action on how the company proposes to safeguard the minority shareholder interests prejudiced by the delays caused in constructing the resort hotel, Citrus Kalpitiya.

The SEC made this request from the company after perusing the circular issued to the shareholders of Kalpitiya Beach Resort PLC, in consequence of the above said directive of the SEC as the SEC was of the opinion that the alternate courses of action stated in the circular to the shareholders lacked specific direction with regard to providing adequate recourse to the minority shareholders in respect of their investment.

The company by way of a prospectus issued to the public raised approximately Rupees two hundred and eighty three million (Rs. 283 million) to part finance the construction of a resort hotel within the stipulated period of twenty four to thirty months.   The company gave this undertaking in the prospectus issued to the public on or about December 2011.   The company has been requested by the SEC that in the event the company is unable to rectify the issues in respect of the construction of the hotel, that it is required to propose a viable alternate scheme to redress the shareholders who have been prejudiced by the failure of the company to carry out its objectives as stated in the prospectus. (SEC)