Sri Lanka tourist arrivals up by 31 percent records highest in July 2015

Sri Lanka's tourist arrivals reached a record highest rising 31.2 percent in July this year compared to the same period last year, the data released by the Sri Lanka Tourism Development Authority (SLTDA) showed.

The month recorded 175,804 tourists arriving in the country compared to the 133,971 arrived in July 2014.

In the first seven months of this year 1,005,855 tourists visited the island, an increase of 16.8 percent compared to the 861,324 recorded for the same period in 2014.

Arrivals from North America increased 12.8 percent to 8,158 in July. Arrivals from US were up 19.1 percent to 4,161 while arrivals from Canada increased 6.8 percent to 3,997 during the month. For the year arrivals from North America increased 15.2 percent.

Tourist arrivals from Western Europe increased 18.3 percent in July with the arrival of 64,905 tourists, compared to the 54,857 tourists arrived in the same month last year. Most of the tourist arrivals from Western Europe were from the UK recording 23.7 percent increase in the month.

Arrivals from Eastern Europe increased 16.7 percent with the arrival of 7,378 tourists in July 2015 compared to the 6,323 arrived in July 2014. However, tourist arrivals from Eastern Europe declined this year by 9.5 percent due to the economic recession in Russia and the crisis in Ukraine.

Arrivals from Middle East declined significantly by 167.6 percent with 16,053 visitors arriving in July 2015 compared to the 5,998 arrived a year ago.

Tourist arrivals from East Asia increased 37.8 percent as 35,572 visited the country compared to the 25,810 visited in July 2014. Arrivals from China compared to last year increased 65.5 percent with the arrival of 25,120 visitors while arrivals from Japan declined 12.7 percent.

Arrivals from South Asia increased by 36.3 percent as 36,360 tourists visited the island in July 2015. Of those arrived from South Asia, 24,681 were from India corresponding to an increase of 28.0 percent.

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LIOC profits hit hard by fuel price reduction

Sri Lanka’s only private oil company, the Lanka Indian Oil Corporation (LIOC) PLC last week reported a drastic reduction in the profit earned for the quarter ended June 30th 2015. The LIOC recorded a profit after tax of Rs.171 million during the said period this year as opposed to Rs. 1.2 billion during the second quarter of last year, which amounts to approximately 86% of drop in profit.

Speaking to The Nation Gain on the issue, Dakwale stated that the LIOC had been facing losses ever since the Government revised fuel prices through its interim budget in January this year.

“We continue to face a loss of Rs.15 to 20 per litre because of this issue. We have called for a price reduction in accordance to the world price. In this case, the prices are reduced way below the actual amount,” he said.

When asked on the remedial measures planned by the company to address the situation, Dakwale stated that they had conveyed their concerns to the Government on several occasions. “The government is in the process of formulating a pricing formula. We would take our next step once we study the formula,” he said. 

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Jo’burg stock exchange selects MillenniumIT solutions

MillenniumIT, the provider of ultra-low latency, agile and resilient capital markets solutions and part of London Stock Exchange Group, said the Johannesburg Stock Exchange has selected MillenniumIT to provide the technology for its derivatives and fixed income markets.

The move will extend JSE’s use of MillenniumIT’s next generation integration platform (MAP), the Millennium Exchange trading platform and Millennium Surveillance products beyond equities, providing an integrated multi-market and ultra-low latency solution in support of the JSE’s strategic objective of integrated trading and clearing, the Colombo-based company said.

MillenniumIT’s integrated technology will be rolled out to further markets within JSE, including equity derivatives, currency derivatives, commodity derivatives, bonds and bond derivatives. Mack Gill, CEO, MillenniumIT, said: “MillenniumIT was initially tasked with improving efficiencies and reducing latency in JSE’s equities market and as a result we have established a long-standing partnership with this exciting international exchange.

We’re delighted to extend this partnership with JSE into five additional markets, helping them streamline their trading infrastructure and maintain market integrity across fixed income and derivatives”. Leanne Parsons, Director of Trading and Market Services, Johannesburg Stock Exchange, added: “The efficiencies, scalability and risk management gains we achieved in our equities markets when we moved our technology infrastructure onto MillenniumIT’s platform in 2012 was outstanding: our member firms benefited from executing trades up to 400 times faster than previously. Since then, MillenniumIT has helped us to further improve our latency with a co-location facility.” 

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SLT Broadband launches first ever Terabyte Data package in Sri Lanka

Sri Lanka Telecom (SLT), the flagship national ICT solutions provider and the leading broadband service provider, recently launched the Terabyte Data package offering its broadband uses the highest data volume given so far by an Internet company in Sri Lanka.

SLT Broadband Internet users are now offered with up to 1225 Gigabytes or GBs (1.2 Terabyte or TBs) data volume per month. This includes two brand new packages “Web Inspire” and “Web Premier” offering 675 GB and 1225 GB, respectively for attractive monthly rentals and is ideal for heavy Internet users that include individuals or small and medium businesses, a company media release said.

“The company made these new high data volume packages available in the market to respond to the demand of Internet users for more data volumes while experiencing ultra-fast SLT broadband internet access,” SLT’s Chief Marketing Officer, Ajantha Seneviratne said.

SLT said it has also taken several initiatives in the recent past including significant enhancements to its Internet speed of up to 16 Mbps and offering unmatched data bundles of up to 400 GBs for its existing package offerings. Customers making use of or wishing to use SLT’s ultra-fast broadband Internet via Fibre, LTE and ADSL can greatly benefit from the new unmatched high volume packages which can also be used for shared data for multiple devices.

Mr. Seneviratne explained that the company is giving the consumers a choice of the biggest ever broadband deals to suit every lifestyle. “We believe these options to larger audiences will help them to save expenses spent on Internet access, especially because we offer up to Terabytes of data volume packages which can be shared among office colleagues and also be used on multiple devices.”

He quoted cost savings, unmatched data bundles, shared data for multiple devices and uninterrupted high speed accesses as direct value creations to the SLT consumers. www.sundaytimes.lk

Govt .target of 2.5 million tourists by 2016 could fall short by around 400,000; report says

Three proposed potential integrated resort projects would've boosted arrivals

The government target of attracting 2.5 million tourists by 2016 may fall short by around 400,000, says a stock market research report. It said proposed gaming centres (under the earlier administration) centering on mixed development projects would have raised the inbound numbers and more importantly, their spending profile.

It said the three potential integrated resort projects proposed under the last regime would have made a substantial impact on the country’s present visitor profile attracting more affluent guests and change the industry as a whole while promoting the country as a foremost tourist destination in the region.

“Under the previous regime three integrated resorts driven mainly by gaming/casinos was proposed to change Colombo’s landscape and possibly help attract the government’s ambitious 25 million arrivals. The three projects were Waterfront Properties by JKH, Crown Casino by James Packer and Queensbury by local high net worth investor Dhammika Perera. However, the present ruling government restricted renting out space for any new casino related purposes, taking into consideration the deterioration of cultural and social values and adverse social effects which trickle down from the casino industry,” a BRS Equity Research report has said, adding that only local conglomerate John Keells Holdings is going ahead with the construction of the mixed development project minus the gaming facilities.

Following other Asian destinations such as Macau and Singapore the government legalized gaming zones in 2010 and as per external research the introduction of casinos has helped to grow the foreign tourist arrivals, specially tourists from India and China. “With high entry barriers to casino operations in India, the development of a gaming hub in the city of Colombo would have contributed to a higher growth in Indian arrivals given its geographical proximity to India and giving Sri Lanka significant competitive edge,” the report added.

The number of smaller to midsized hotels is increasing around the country, which will lead to a mini price war whereby the existing operators are pushed to lower their room rates at the cost of occupancies in order to maintain yield. “Further on the high end segment with several international brands entering the industry, we believe brand loyalty would affect occupancies of the local hotel operators in the future. However, overall service standards of the industry is set to improve along with the new competition,” the report added.

Colombo, the capital of Sri Lanka is a gateway to the country due to the presence of the international airport and the growing number of shopping options and city hotels. Colombo has eight operational malls with a built-up area of nearly 0.66 million square feet and an average vacancy rate of some 5 per cent.

“Restoration projects undertaken by the Urban Development Authority (UDA) at heritage sites such as the Independence Square and Colombo racecourse has increased the retail, cinema and dining options in Colombo. However, despite the growth in retail options the city still lacks high-end shopping malls to entice the affluent traveler by providing them a holistic retail experience within one luxury shopping mall. Sri Lanka is currently promoting itself to the growing number of Chinese tourists and studies show that most Chinese tourists are shopping centric and tech savvy with a love for major brands,” the report said.

New high end shopping malls are set to enter the city’s landscape via development projects only by 2018. The projects are undertaken mainly by companies of the likes of John Keells Holdings, Overseas Realty, Silver Needle Hospitality Group and Shangri-la.

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CIC Group considers new ‘significant’ investments in core area of agriculture for export

CIC Holdings PLC, which says first quarter 2016 results have been impressive particularly in its core area of agriculture, is considering significant investments in the areas of dairy and value added vegetables for export.

While feasibility studies in this context are underway, the company said in a statement that it has commenced a project to supply corn to the local feed industry with a capital expenditure of approximately Rs. 700 million and a projected equity pay back of approximately six years.“CIC is also currently upgrading its binder business with new technology to help the company successfully face the market challenges of the future. The company will continue to look at other avenues for investment provided its returns cross the hurdle rates set by the board of directors,” the statement said.

Group profit after tax (PAT) was Rs. 395.9 million for the first quarter of the financial year ending 2015/16, sharply up by 94 per cent from the corresponding period of the previous financial year. The group also recorded revenue of Rs. 6.51 billion, an increase of 15.6 per cent.

CIC said it also reduced expenses in Q1 and the group’s finance cost reduced due to the maximization of savings and the efficient utilization of borrowed funds. Commenting on CIC’s performance, Harsha Amarasekera, Group Chairman, said, “In the first quarter of 2015/16, CIC has continued its momentum of growth, and several sectors have performed above last year. I would like to commend the senior management and Board of Directors, for effectively implementing our revised strategy, and ensuring the group’s continued profitability. As we look ahead to the future, we shall focus on exploring new partnerships and export opportunities, and we will also seek to implement the use of new technology to take the group forward”.

Agriculture and ss Livestock sector achieved an operating result of Rs. 473 million in the first quarter of 2015/16, up by 54 per cent over the first quarter of the previous financial year. “The increase in profitability is attributed to the performance of the agribusiness companies in the group, including the dairy sector and CIC Feeds, which showed a notable improvement from the previous year.” 

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Touchwood owns over 2000 acres in Sri Lanka

By Sunimalee Dias

Liquidator extends date to find maintenance firm

All lands in Sri Lanka belonging to liquidated firm Touchwood Investments PLC have been identified by its court appointed liquidator who is currently searching for a company to maintain these.

Liquidator Sudath Kumar speaking with the Business Times on Tuesday said that they have already identified all lands belonging to Touchwood Investments PLC amounting to approximately 2000 acres and were working on finding a maintenance firm for these lands.

Lands were identified in Badulla, Matale, Kandy, Ratnapura and Kalutara according to the available information before the liquidator and these would be maintained aimed at giving back to the depositors the produce. Mr. Kumar explained that they had advertised for maintenance rights on these 2000 acre lands for which proposals were called for ending July 31. However, it was pointed out that they were yet to receive any proposals from any parties since most found this to be a complicated matter and required time to study the documents prior to making any commitments.

In this respect, at the next hearing of the Touchwood Investments PLC case the liquidator noted he would request court for an extension of the date since he was unable to find a maintenance firm as yet. 

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Singer revenue up 28% in 1H

Singer Sri Lanka recorded Rs. 18 billion in revenue, a 28% surge in the first half of the 2015 financial year compared to the previous year.

The Group's continued initiatives and expansion and overall improvement in the business environment has contributed to the growth momentum.

Setting up new shops and renovating existing ones, introducing and securing new brands, products, dealers and distributorships has helped the Group consolidate its position as one of the nation's leading retailers in consumer durables. Singer Sri Lanka's new brands and distributorships of Dell, Sony, Mitsubishi and Sharp contributed Rs. 1,246 million in revenue in the first half of 2015 when compared to Rs. 99 million during the previous year.

The Group Net Profit for the first half witnessed a growth of 141% to Rs. 660.3 million when compared with the previous year. Also noteworthy is the increase in the company's first half Net Profit to Rs. 508.5 million, an increase of 130%.

However, Group CEO, Singer Sri Lanka, Asoka Pieris said, "While the figures for 2015 are encouraging and show a marked increase in profits from the previous two years, the overall profit figure is still 3% below that of 2012, which was the highest profit recorded at half year."

The Group's second quarter revenue rose to Rs. 9.4 billion reflecting a growth of 29% over the corresponding period in the previous year.

Leading this continued growth trend is the Group's Communication and the Digital Media segment which grew by 79%.

The company's new subsidiary Singer Digital Media (Pvt) Limited specializing in mobile phone sales and computers to the trade channel contributed Rs. 1,402 million through revenue to external parties.

Other segments driving Singer's impressive results include the Agro segment which grew by 66%, Furniture by 25%, Sewing and Kitchen related products grew 37% and 39%. The largest segments, White goods and Electronics also grew by 17% and 14% respectively.

Revenue from the Group's public listed subsidiary Singer Finance (Lanka) PLC grew by only 2% due to lower lending rates. However, good volume growth and corresponding reduction in borrowing rates lead to a growth in net income increasing net profitability by 60%.

The company remains confident of its position as the nation's retail giant in consumer durables, continuously engaging in enhancing its world class brands and product portfolio offering. Providing customers unrivalled convenience and choice. Singer Sri Lanka continues to set the benchmark for 'trusted excellence'.

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Overseas Realty 1Q, 2015 profits hit Rs 1.5b mark

Overseas Realty (Ceylon) PLC reported a Group Net profit of Rs 1.5 billion for the first six months ended June 30, 2015, a marginal decline of 2% over the corresponding period of 2014.

The Group recorded a revenue of Rs 1.8 bn a decrease of 31% over the corresponding period of last year, due mainly to the recognition of lower apartment sales at Havelock City.

The Revenue from leasing grew by 15% to Rs. 984 mn in comparison over last year due to high occupancy levels and average rentals at the World Trade Center (WTC), with Other Services Revenue contributing Rs. 82 mn an increase of 40% resulting in a group revenue of Rs. 1.8 bn.

Piling work of Havelock City Phase three and Phase four comprising four more residential towers with 644 luxury apartments was launched in May 2015.

The Group Net Asset Value per share as at June 30, 2015 increased by 6% to Rs. 30.52 and the Earnings per Share stood at Rs. 1.68.

The profit attributable to equity holders of the parent increased by 5% to Rs. 1.46 bn.The group expects to maintain high occupancy levels throughout the year at the WTC and hopes to launch construction of Havelock City Phase three at the end of this year.

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Mercantile Investments toasts 50th anniversary with strong performance

Mercantile Investment and Finance PLC (MI), considered one of the strongest finance companies in the country with over 50 years in business, has returned a strong performance in the year ended March 31, 2015, with gross income up five percent to Rs. 4.29 billion although the profit after tax was down slightly to Rs. 631.3 million from Rs. 675.4 million a year earlier.

MI which was founded by Mr. George Ondaatjie and is largely owned by his family celebrated its 50th anniversary in July 2014 with the company saying in its latest annual report that its success over the years is attributable to its "unique business model that exemplifies strategic thinking and precise execution."

The Group is a major player in the country’s hotel industry with three quoted hotel companies, Tangerine Beach, Royal Palms Beach Hotels and Grand Hotel Nuwara Eliya under its umbrella along with the unquoted Nilaveli Beach Hotel, its first hotel property. A new 3-star hotel in the city has also been recently launched in Wellawatte by the group.

The company’s Chairman Saro Weerasuriya expected the prevailing economic transformation to speed up once the political climate stabilized and economic policy takes full effect within the next year.

"The national economy growth forecast looks very positive and therefore we can expect GDP growth levels to hover around 7% even in the medium term. This should pave the way for corporates to thrive (and) exploit emerging opportunities to their advantage," he said.

"We have kept to our promise of generating stakeholder value and therefore celebrate this fiftieth year in business with a great sense of accomplishment," MI Managing Director Gerard Ondaatjie said in the report.

He said the year had seen growth in the licensed finance company sector fuelled by the resurgence of the economy in key sectors and improved spending power of people.

"This sustained constant demand for credit, particularly to provide finance to purchase both brand new and registered motor vehicles. Demand for non-traditional lending such as personal loans, property mortgage loans and microfinance showed potential and was a lucrative area of focus for the sector," he said.

Fixed deposits had seen growth momentum, and were a preferred investment choice of most as opposed to property market and stock market investment, he added.

Ondaatjie saw MI’s pre-tax profit of Rs. 912 million, up 11% from a year earlier as "satisfactory" and the after-tax profit of Rs. 631 million, down 7% from a year earlier as a "moderate" decline.

The closely-held company paid Rs. 89 million in dividends, up from Rs. 30 million during the previous financial period. Ondaatjie said that while recording sound financial results and retaining profits, the company had ensured consistent increase in shareholder funds which exceeded Rs. 7.5 billion as at Mar. 31, 2015.

"I can once again assure all our shareholders of our unwavering commitment towards business excellence which will enhance their returns in the years to come," he said.

The year had seen MI making only modest gains on its quoted share portfolio costing slightly over Rs. 3 billion and with a market value of over Rs. 3.9 billion with trading gains down to Rs. 13 billion from the previous year’s Rs. 81 million.

"Despite the gradual pick up in the stock market, the persistent volatility in price movements hampered the possibility of realizing expected share trading gains," Ondaatjie said. "However, fair value of available for sale financial assets increased substantially to Rs. 781 million year-on-year on account of the boost in the stock market."

Nilaveli Beach Hotels, an Ondaatjie company, with 20.83% of MI is its largest shareholder. Members of the Ondaatjie family, Messrs. G.G. Ondaatjie, Ms. A.M. Ondaatjie and T.J. Ondaatjie own 15.88% each. Mercantile Fortunes, an associate company owns 13.67% and the founder, Mr. G.L.A. Ondaatjie owns 8.93%. Other shareholders in the top 20 list have minor stakes going down from 12,525 shares to 10.

The stated capital of the company is a modest Rs. 36 million with total assets running at over Rs. 28.4 billion and total liabilities at slightly over Rs. 20 billion including customer deposits of Rs. 13.7 billion, up from Rs. 11.4 billion the previous year.

The directors of the company are Messrs. S.H.J. Weerasuriya (Chairman), G.G. Ondaatjie (MD), Mahes Amarasekera (Deputy MD), Shermal Jayasuriya (Finance Director), Ms. Angeline Ondaatjie, Travis Ondaatjie, Ms. Punyakanthi Tikiri Kumari Navaratne, Hasantha Perera, Sanjaya Bandara and P.C. Guhashanka.

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