Dunamis Capital to raise Rs1bn from listed debenture

(LBO) – Sri Lanka’s diversified investment holding company, Dunamis Capital is to raise 1.0 billion rupees from a listed debenture issue, the company said in a stock exchange filing.

The company has decided to issue 10 million debentures at 100 rupees each, subject to the necessary regulatory approvals.

The subscription list will be open on 19 November 2015 and First Capital is managing the debt issue.

The Company’s principal business activities include, providing centralized management services such as corporate planning, finance, legal and secretarial services.

Sri Lanka Hayleys Sept quarter net up 6-pct to Rs629mn

ECONOMYNEXT – Sri Lanka’s Hayleys PLC said group net profit for the September 2015 quarter rose six percent to 629 million rupees from a year ago supported mainly by strong gains in its transportation, activated carbon and textiles businesses.

Sales fell four percent to 22 billion rupees from the previous year, interim accounts filed with the stock exchange showed.

Finance income in the September quarter shot up 159 percent to 271 million rupees. Quarterly earnings per share rose to 8.39 rupees from 7.89 rupees the year before.

The group estimated liability to the 25 percent Super Gains Tax for the 2013/14 financial year at 939.7 million rupees.

In the six months to 30 September 2015, EPS rose to 15.36 rupees from 12.78 rupees the year before.

Hayleys group transportation and logistics business was the biggest contributor to profits while the activated carbon purification products business and textiles also did well.

A company statement said half-year profits were supported by strong results from the transportation and logistics, agriculture, purification products, leisure, textiles, construction materials and industrial inputs sectors.

“The transportation and logistics sector contributed a notable increase to the bottom line during the six month period from the previous year as the sector continues to grow its business interest through new business opportunities and increasing existing business lines,” it said.

The agriculture sector profitability “rose significantly” from the previous year as it continued to expand its agro base and diversify into new high export potential crops like seaweed, the company said.

“The purification products Sector also posted robust results as local and global demand for purification products continued to rise in the six month period.”

Hayley said its textiles sector continued its growth momentum after its successful restructuring and re-launch under a new corporate identity ‘Hayleys Fabric’.

“The multiple issues faced by the plantation sector, including lower prices for commodities in the world market and inclement weather, saw the sector incur a loss during the six month period,” the statement said.

“Most of the sectors continue to perform strongly despite a challenging operating environment, indicative of the resilience of the Group,” said Mohan Pandithage, Chairman and Chief Executive of Hayleys PLC.

“We look forward to gaining momentum during the remainder of the year.” (Colombo/November 09 2015)

Sri Lanka shares slip in dull trade ahead of holiday

Reuters: Sri Lankan shares ended a tad weaker in thin trade on Monday despite foreign buying as investors sold blue-chips ahead of a holiday.

The main stock index ended down 0.13 percent at 7,050.21, slipping from its highest close since Oct. 29 hit on Friday.

Foreign investors, who have been net sellers of 3.76 billion rupees worth of equities so far this year, bought a net 64.9 million rupees worth of shares on Monday.

The day's turnover was 491.8 million rupees ($3.47 million), less than half of this year's daily average of 1.1 billion rupees.

"Overall, there was low activity. Nothing much happened as many people were not in due to the holiday on Tuesday," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

Both the stock and foreign exchange markets will be closed on Tuesday for Diwali, a Hindu religious holiday.

Analysts said investors are waiting for more clarity on economic policies from the 2016 budget announcement, scheduled on Nov. 20.

Shares in conglomerate John Keells Holdings Plc fell 1.08 percent, while Distillers Company of Sri Lanka Plc lost 0.71 percent, dragging the overall index. 

($1 = 141.9000 Sri Lankan rupees) 

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

Ceylon Leather Products makes Sept quarter loss, closes export unit

ECONOMYNEXT – Ceylon Leather Products PLC (CLPL), a unit of Sri Lanka’s Environmental Resources Investment, has announced a loss in the September 2015 quarter, with a footwear exporter it bought for 418 million rupees ceasing operations.

CLPL made a loss of 42 million rupees in the September 2015 quarter compared with a profit of 66 million rupees a year ago, according to interim accounts filed with the Colombo stock exchange.

Sales in the quarter were up two percent to 1.9 billion rupees.

“Palla & Company (Pvt) Ltd., a 60 percent-owned subsidiary of the company suspended its operation with effect from 31 August 2015,” a note to the accounts said.

The accounts showed that administrative expenses in the September 2015 quarter includes payment of compensation amounting to 45.6 million rupees to employees of Palla and Company (Pvt) Ltd due to the discontinuation of the business.

CLPL announced it had bought the stake in Palla & Company (Pvt) Ltd. for 418 million rupees in January 2012.

Sri Lanka tobacco firm profits, taxes up amid consumption boom

ECONOMYNEXT - Sri Lanka's Ceylon Tobacco Company Plc, a unit of British American Tobacco said profits rose 57 percent to 3.2 billion rupees in the September 2015 quarter from a year earlier amid stronger consumption demand.

The firm reported earnings of 17.58 rupees per share for the quarter in a quarterly accounts.

For the 9-month to September it reported earnings of 46.99 rupees per share on total profits of 8.8 billion rupees.

"This performance is primarily driven by the increased levels of disposable income and consumer confidence experienced this year," the firm said in a note to shareholders.

In the first nine months out of total revenues of 82.7 billion rupees, 68.6 billion rupees went to the government as several taxes, the firm said.

Sri Lanka consolidated value added tax on tobacco with excise tax in 2014 as part of a strategies followed by during the Rajapaksa administration to progressively undermine the VAT regime.

The policy is expected to be continued by the new administration, with further undermining of the VAT regime in store, some analysts say.

Tobacco taxes were raised recently to boost state revenues.

Sri Lanka's government is deficit spending heavily by printing money, generating a Keynesian style 'stimulus' generating balance of payments troubles as the newly minted money ends up as imports.

CTC said authorities seized 10.4 million cigarettes from raids on illegal cigarettes. Due to high levels of tax, smuggling is encouraged.

The firm said the raided cigarettes had a street value of 304 million rupees.

CTC said 'Beedi' a legal product made by small businessmen, which is taxed a lower rate was also hurting taxes and its revenues.

Beedi is smoked mostly by lower income groups and blue collar workers but does not have the upmarket image built by international firms.

Sri Lanka's Kelani Valley Plantations losses widen in Sept quarter

ECONOMYNEXT – Losses at Sri Lanka's Kelani Valley Plantations shot up to 88 million rupees in the September 2015 quarter from 16 million rupees a year ago as the continued slump in tea and rubber prices took its toll.

Sales fell four percent to 1.5 billion rupees in the quarter, interim accounts filed with the stock exchange showed.

The company, a unit of the Hayleys conglomerate, said the loss per share for the September 2015 quarter was 2.60 rupees compared with a loss of 46 cents the year before.

In the six months to 30 September 2015, the loss per share rose to 3.46 rupees from 1.03 rupees the year before.

A note to the accounts said Kelani Valley Plantations estimated its liability to the 25 percent Super Gains Tax at 24.6 million rupees for the group in the 2013-14 financial year.

Smokers cough up Rs. 68.6 b to Govt. in 9 months; 27% increase

Ceylon Tobacco Company Plc (CTC) said on Friday that it had contributed Rs. 68.6 billion to the Government in the form of taxes and levies, during the nine months ended 30 September 2015, up by 27% from a year earlier.

“This performance is primarily driven by the increased levels of disposable income and consumer confidence experienced this year,” CTC said.

CTC’s revenue rose by 46% to Rs. 30 billion in the third quarter while Government revenue rose by Rs. 7.2 billion or 46% as against the third quarter of last year. First nine months at CTC revenue amounted to Rs. 83 billion, up from Rs. 64 billion a year earlier. 

It said that growth in under regulated and low-taxed products such as ‘Beedi’ remains a key threat to Government revenue contribution from the tobacco industry.

Law enforcement agencies continued to effectively curtail the spread of unauthorised and illicit tobacco products. In the first nine months of 2015, a total of 1,169 raids had uncovered 10.4 million illegal cigarettes at a market value of Rs. 343 million.

CTC’s profit after tax stood at Rs. 8.8 billion for the nine months ended 30 September 2015, up by 33% from the corresponding period of last year. In the third quarter profit was Rs. 3.3 billion, up from Rs. 2 billion a year earlier.

CTC said it remains committed to investing in the company’s key brands with a predominant focus on infusing value into the main-stream brand, John Player Gold Leaf.
The company’s flagship CSR initiative, the Sustainable Agricultural Development Program (SADP), continued to focus on alleviating poverty and empowering the livelihoods of families in rural Sri Lanka. The total number of families supported by the company as at September 2015 stood at 18,064, comprising of 69,707 beneficiaries in 16 districts.

CTC Directors have recommended a third interim dividend of Rs. 9 per share to be paid by 27 November 2015.
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