Sri Lanka sells Rs3.3bn in 09 year bonds; 07 year bonds rejected

May 19, 2015 (LBO) – Sri Lanka has sold 3.29 billion rupees of nine year bonds after calling bids for two billion rupees of bonds, the state debt office said.

The debt office on Tuesday sold the bond maturing on 15 March 2025 at weighted average yield of 9.01 percent.

The bond has received 14.67 billion rupees of bids, Central Bank debt office said.

All bids received for the seven year bonds which offered another 2.00 billion rupees were rejected at the auction.

At the last auction held on 12 May 2015, four year bonds were sold at an average yield of 8.15 percent.

Sri Lankan shares at 11-week high; banks lead

May 19 Sri Lankan shares closed at their highest level in 11 weeks on Tuesday, led by banking and diversified stocks on the back of strong earnings, brokers said.

The main stock index rose 0.15 percent, or 11.18 points, to close at 7,266.20, its highest close since Feb. 27.

"Market is up because of the earnings, banking sector was very good. The sector is moving heavily with large caps playing a major role," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

Tuesday's turnover was 1.56 billion rupees ($11.7 million), more than this year's daily average of about 1.12 billion rupees.

Foreign investors were net buyers of shares worth 273.4 million rupees on Tuesday, extending the year to date net foreign inflow to 6.01 billion rupees in equities.

Political uncertainty due to Prime Minister Ranil Wickremesinghe-led UNP not having a parliament majority has been a drag on the market, though the trend reversed after the central bank cut key monetary policy rates to record lows on April 15.

The index has gained 5.29 percent since the rate cut.

Shares of Aitken Spence Hotel Holdings Plc rose 5.32 percent, while Ceylon Tea services Plc rose 9.15 percent.

Shares in Seylan Bank Plc rose 3.09 percent while conglomerate John Keells holdings Plc rose 0.25 percent. 

($1 = 133.3000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Anand Basu)

DFCC Group posts a record Rs. 4.4 b pre-tax profit in FY15

DFCC Group has posted a record Rs. 4.4 billion pre-tax profit in the financial year ended on 31 March 2015.

Provisional results released yesterday for FY15 showed what DFCC described as “a record performance” that was achieved amidst a challenging business environment, marked by intense competition and declining interest margins.

Despite having to channel a substantial amount of time, effort and resources to merger activities, the bank retained its focus on its core business, resulting in this strong performance.

Group profit after tax increased 38% to Rs. 4.4 billion from Rs. 3.2 billion. Although there was a drop in net interest income, caused primarily because DFCC’s development banking model precluded the bank from maintaining current and savings accounts unlike other commercial banks, overall operating income before VAT and NBT grew by 33% to Rs 6.1 billion from Rs. 4.6 billion. The growth in operating income was driven by a combination of increased fees and other income, and stringent control of costs.

At the same time, Earnings per Share grew by 38% to reach Rs. 16.46 from Rs. 11.89. Meanwhile, total Group assets surpassed the Rs. 200 billion mark rising to Rs. 211 billion from Rs. 175 billion in the previous period.

Besides DFCC Bank’s and DFCC Vardhana Bank’s exceptional performance, the other subsidiaries in the DFCC Group - DFCC Consulting, Lanka Industrial Estates and Synapsys, and the joint venture - Acuity Partners, also reported excellent results and contributed positively to the Group’s performance.

The current year marks the 60th anniversary of DFCC Bank Plc and the Group will look at various options in transforming to a Universal Bank, including an amalgamation between DFCC Bank Plc and its commercial banking subsidiary - DFCC Vardhana Bank Plc, after receiving all the required approvals. During this journey, the DFCC Group will remain faithful to its roots in Development Banking.
www.ft.lk

Sri Lanka IOC unit in losses after state directed fuel price cut

COLOMBO (EconomyNext) – Lanka IOC, a unit of Indian Oil Corporation lost 1.06 billion rupees in the March 2015 quarter interim accounts showed, following a state directed price cut and spiking oil prices.

The firm reported a loss of 2.0 rupees for the quarter, up from 1.8 billion rupee profit a year earlier. In the December quarter the firm reported a 610 million rupee profit.

In the March quarter revenues fell 25 percent to 15.8 billion rupees following a price cuts and costs fell at a slower 17 percent to 16.1 billion rupees leaving the firm with gross loss of 365 million rupees.

Oil prices fell sharply last year but picked in the first quarter by about 20 dollars a barrel after Sri Lanka's new administration asked oil companies to cut prices.

A price formula was promised for retail fuel by June.

State-run Ceylon Petroleum Corporation lost 4.0 billion rupees in the quarter.

When imported oil is sold at a loss, which is then financed by credit which is in turn backed by liquidity provided by the Central Bank, the exchange rate comes under pressure from increased non-oil imports and foreign reserves are lost.

Market pricing oil generates a matching reduction in non-oil imports provided no central bank credit is extended and higher prices may also reduce or slow the growth in oil imports.

Haycarb in Rs 11.9 billion turnover, PAT Rs 873 m in 2015

Sri Lankan multinational Haycarb PLC reported revenue of Rs. 11.9 billion, profit before tax of Rs. 1,070 million and profit after tax of Rs. 873 million for 2014/15. The earnings per share of equity holders of the company were Rs. 23.39 for the year. Haycarb is the pioneer manufacturer of coconut shell activated carbon in any coconut producing country with......manufacturing facilities in Sri Lanka, Thailand and Indonesia supported by marketing offices in the USA, UK and Australia. The company contributes net foreign exchange revenues with its value adding processes, whilst remaining a leading and technologically superior manufacturer in its chosen segment.

Haycarb PLC and Hayleys PLC Chairman Mohan Pandithage said that Haycarb has consolidated its position as a leading manufacturer of coconut shell based activated carbon and a provider of total solutions in related areas and has achieved a profit before tax of over Rs. 1 billion for the 3rd consecutive year.

Haycarb PLC Managing Director, Rajitha Kariyawasam said that the company operated in a challenging external environment during the year under review. He said, "The increase in price of the primary raw material, coconut shell based charcoal impacted the profitability of the Sri Lanka and overseas operations, as the prevailing market conditions prevented the company from passing the increase in raw material and other input costs to end customers adequately. The markets continued to be affected by the depressed gold mining industry and low-cost competition from countries such as Philippines, Indonesia and India. The depreciation of currencies in key markets in which we operate, notably in the second half of the year, contributed to the erosion of margins. "

Kariyawasan added that in this background, several initiatives contributed to the recovery of profitability, especially in the last quarter of the year.

Haycarb Group crossed the significant milestone of 40,000 MT of installed manufacturing capacity per year with the commissioning of the new plant in Indonesia and a major thrust on lean initiatives targeting productivity improvements. The lean projects launched by technical and manufacturing teams to achieve cost savings, notably through energy saving initiatives helped the company to retain its competitiveness. The increase in market share of value added carbons, and the growth in its non-traditional markets and purification systems were positive factors that helped to achieve the overall results. During the year, the company focused on expanding its supply chain network for coconut charcoal in Sri Lanka and Indonesia, consequently reducing dependency on India. The supply chain relationships and sustainability were strengthened by providing the technology and financing to install environmentally friendly charcoaling pits under the initiative Haritha Angara to selected suppliers in countries we operate in.

Kariyawasam said that performances by the operations in Thailand and in Indonesia contributed significantly to overall group performance. The allocation of value added sales supported by enhancement of production capabilities, processes and systems together with initiatives to grow the local markets helped to achieve the notable results. 

Similarly, the Group's Environmental Engineering Company, Puritas (Pvt) Ltd showed a significant growth in its revenue, PBT and operational footprint.

Puritas SathDiyawara, the flagship CSR initiative of the Haycarb Group, provides purified drinking water to families in the North Central Province where it is estimated that over 400,000 persons are affected by the Chronic Kidney Disease (CKD). Haycarb Group commissioned the first Sath Diyawara Project to provide purified drinking water to over 1500 people, through a Reverse Osmosis (RO) Purification Plant and water distribution system in Maithreepura ,Padaviya. Kariyawasan said that it was encouraging to note that in view of the success of this initial project that our parent company, Hayleys pledged to install a total of 10 similar Projects to service over 15,000 people. We are proud to announce that Puritas SathDiyawara has won the prestigious 'Asia Responsible Entrepreneurship Award 2015' under the category SME CSR from Enterprise Asia in recognition of this initiative.

Kariyawasan re-iterated the growth potential of the activated carbon industry in view of the continuous emphasis and awareness on environmental sustainability worldwide. Haycarb's strength in the industry as a leading player renowned for quality, reliability and consistentperformance in its entire spectrum of activated carbon products and purification solutions, positions the company to capture the growing opportunities in this industry.

The Board of Directors of Haycarb PLC comprises: Messrs Mohan Pandithage – Chairman, Rajitha Kariyawasan – Managing Director, Dhammika Perera, Arjun Senaratna, Sarath Ganegoda, Jeevani Abeyratne, Dushantha Ranaraja, Nimal Perera, Dr. Sarath Abayawardana, Sujeewa Rajapakse, M. S. P. Udaya Kumara and Brahman Balaratnarajah.
www.ceylontoday.lk

Singer to raise Rs 3b in debenture issue

Singer Sri Lanka will raise Rs 3 billion via a listed debenture issue. Accordingly, the company will issue 20,000,000 Rated, Unsecured,Redeemable senior debentures with an option to a further 10,000,000 debentures at an issue price of Rs 100 each.

The subscription list of the issue will open on May 29. Agora Securities Pvt Ltd and NDB investment Bank are the managers to the issue.
www.dailynews.lk

Central Finance to raise Rs 3b from debenture

Central Finance will raise Rs. 3 billion via a listed debenture issue. Accordingly, the company will issue 20,000,000 rated, Secured, redeemable debentures with an option to a further 10,000,000 rated, secured, redeemable debentures at an issue price of Rs 100 each.

The subscription list of the issue will open on the May 27.
www.dailynews.lk

Hayleys MGT posts Rs 90m PAT

Hayleys MGT- Knitting Mills has recorded a profit after tax of Rs. 90 million (US$ 680,000) for the financial year ending March 31, 2015, delivering a profit growth of 149% and a top line growth of 6% year on year.

FY 2014/15 marked the first year of the company recording a surplus after consecutive losses during the recent past. The company was also able to generate a cash profit of Rs 412 million (US$ 3.1 mn) in the year under review.

The changes made in the top management continued to show results by attracting business to fill capacity and though improved performance on quality and on-time delivery. Cost reduction measures, productivity improvements, system and process improvements were some of the main contributory factors for the better performance.

The positive results shown from the first quarter of 2014 gave confidence to institutional investors to make significant investments, shareholders to oversubscribe a rights issue and the banking sector to enhance credit facilities which helped the company to significantly improve its cash flow position as well as restructure loans.

During the year, the company also made significant investments to up-grade production technology, information systems, enhanced effluent treatment facility and training and development of the staff. One of the key differentiations made during the year was to set up an innovation center to develop new fabric which became a tremendous success to attract new business. These fabrics are now sold under a special brand named ‘Inno’.

The company has planned further investments during the ensuing year and is looking forward to increasing the stakeholder value.
www.dailynews.lk