Sri Lankan shares end at 7-month high on stability hopes after polls

Reuters: Sri Lankan shares closed at their highest level in seven months in a truncated session on Monday on hopes that political stability after the Aug. 17 parliamentary elections would help boost investor sentiment, brokers said.

Sri Lankans went to the polls on Monday to elect a new parliament in what amounts to a referendum on ex-president Mahinda Rajapaksa's comeback bid, with the reformist alliance that swept him from power seeking a stronger mandate.

The trading time was reduced to half from the usual five hours due to the election.

The main stock index ended up 0.4 percent at 7,492.04, the highest close since Jan. 16.

The day's turnover stood at 1.17 billion rupees ($8.74 million) on Monday, in line with this year's daily average of 1.13 billion rupees.

Foreign investors were net buyers of a net 4.79 million rupees worth of equities on Monday. But they have offloaded a net 1.08 billion rupees worth of shares so far this year.

"Heavy retail interest was there. The whole market was dominated by retail investors on the hopes of strong earnings and a stable government after the elections," said Dimantha Mathew, a research manager at First Capital Equities (Pvt) Ltd.

"We expect the market to be very positive after the elections."

Shares in Sri Lanka Telecom Plc jumped 3.59 percent, while Ceylon Theaters Plc rose 7.80 percent, pushing the index higher. 

($1 = 133.9000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anand Basu)

Sunshine Holdings posts Rs 314 m profit in Q1

Healthcare revenue for 1QFY16 grew 17.5% YoY, exceeding management expectations, and stood at LKR1.7bn. This represents 39.8% of Group turnover for the period.

EBIT margin for 1QFY16 contracted by 20 bps to 7.5% in 1QFY16mainly on account of bulk diagnostic sales to the Public sector, and supply side pressure from business partners.

The FMCG sector reported revenues of Rs 685m in 1QFY16, up 16.3% YoY, on the back of both volume and price growth, and the sector accounts for 16.4% of group revenue for the period. The branded tea business within FMCG sold 703 tonnes of branded tea, up 8.5% YoY, primarily driven by their largest brand ‘Watawala Tea’ - which is the number one selling Tea brand in Sri Lanka.

Sunshine Holdings reported consolidated revenues of Rs 4.2 b for the quarter ended 30 June 2015, up 4.9% YoY. Profit after tax grew 10.8% YoY to stand at Rs 162 m for 1QFY16, despite a 3.7% YoY contraction in PAT to Rs 314 m due to weak performance in the agri sector.

All segments, except forAgri contributed towards top-line growth during 1QFY16. Agri, still the biggest contributor to group revenue (40.3% of group revenue), contracted 10.4% YoY, with Healthcare close behind (39.8% of group revenue) grew17.5% YoY. Revenue contribution from FMCG increased to 16.4% of total in 1QFY16, against 14.8% during same quarter last year, and grew 16.3% YoY.
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Tokyo Cement adds fifth vessel to transportation fleet

Tokyo Cement, has announced the addition of a fifth vessel, MV Mohar to its fleet of cement transport ships on 11 August. 

The 22,000 metric ton, pneumatic bulk cement carrier was inaugurated byChief GuestArjuna Ranatunga, Minister of Ports, Shipping and Aviation and Guest of Honour Upul Jayasuriya, Chairman, Board of Investments, Sri Lanka.

Dr. Harsha Cabral, Chairman, Tokyo Cement Group in his speech, paid tribute to the Visionary Founder Chairman, late Deshamanya A.Y.S. Gnanam, one of the greatest industrialistsin Sri Lanka for his foresight and contribution to the development to the nation. He also thanked the distinguished gathering for their presence at this special occasion.

S.R Gnanam, Managing Director, Tokyo Cement Group, speaking at the launch event said,“Logistics is an integral part of our business, and the increase in local demand has required us to enhance our capacities not just in transportation, but manufacturing and energy generation. We are always striving to improve our business performance because doing so is Tokyo Cement’s contribution to building Sri Lanka, and ensuring strong, sustainable development.”

With an increase in production capacity of one million tonnes in Trincomalee, the new vessel will play the vital role of transporting cement to the Colombo Port, in order to distribute more efficiently to the masses.

Explaining further Gnanam said: “The cement industry is often times described as a barometer of a country’s march to economic development and prosperity. What we are currently seeing is a surge in demand for products and services which is a good indicator of market confidence. Over the last three decades, Tokyo Cement has built itself up to become one of Sri Lanka’s most valuable brands with an installed capacity of over two million tonnes of cement, over 600 employees and 20 billion rupees in assets. Our success reflects the continuing growth of Sri Lanka and its economy.”

The company’s reputation for excellence is coupled with a commitment to social responsibility. Over the years Tokyo Cement has made a number of valuable contributions to uplift the standards of the communities in which it operates. These efforts range of vocational training to school nutrition to building homes and empowering dealer networks. As Gnanam pointed out: “It’s about taking care of more vulnerable communities and fostering a sense of family and partnership.”

Tokyo Cement has always strived to bring out the best in people of all ages and abilities, from empowering communities to protecting the environment. They have encouraged academic engagement through the first ever All-Island School’s Quiz Program, to the reforestation of mangroves along at-risk coastlines, to the rehabilitation of coral reefs with recycled concrete. Further they are funding a Construction Training Academy to raise the standards of construction nationally whilst providing necessary occupational training; Tokyo Cement remains resilient in its dedication to the betterment of society.
Meanwhile, innovation remains the cornerstone of the business with the company pursuing best practices in energy efficiency. Tokyo Cement also lists many firsts including setting up Sri Lanka’s first automated cement factory, commissioning the first 10 megawatt biomass power plant in Trincomalee, becoming the first local company to achieve the ISO 14001 Environment Management Systems certification, and becoming the first cement manufacturer to achieve the ISO 9001 Quality Management Systems certification.
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Softlogic Holdings Group revenue up 62.1%

Softlogic Holdings Group revenue has increased by 62.1% to Rs 13 billion as opposed to Rs. 8 billion reported in the comparative quarter of 2014 according to the financial statements of for the three months ending June 30, 2015.

Retail sector pulled in the reins to lead in Group turnover with a contribution of 33.4% post-ODEL consolidation. ICT sector, with Samsung’s handset applications added to the sector’s product range, emerged second in revenue contribution with 29.0% followed by Healthcare Services (17.1%), Financial Services (16.6%), Automobiles (2.2%) and Leisure (1.0%).

Consolidated Gross Profit increased a strong 47.5% to reach Rs. 4.3 billion during the first three months of the financial year (Rs. 2.9 billion reported last year).

Increasing activity levels led the operational expenses to increase by 44.1% to Rs. 3.1 billion during the quarter. However, a decline in operation cost margins were noted from 26.6% in 1QFY15 to 23.7% in 1QFY16 following synergy benefits and stringent cost discipline measures. Distribution costs increased to Rs. 654.8 million (up 55.9%) while administration costs increased 41.2% to Rs. 2.4 billion for the period under review.

Finance income registered a decline of 28.8% to Rs. 301.1 million during the quarter.
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