Sri Lanka Dipped Products makes Rs79mn loss in December quarter

ECONOMYNEXT - Sri Lankan rubber gloves manufacturer Dipped Products slipped into the December 2015 quarter, reporting a loss of 79 million rupees compared with profits of 326 million rupees a year ago.

Sales fell 19 percent to five billion rupees over the period, according to interim results filed with the stock exchange.

The firm made a loss per share of 1.32 rupees in the quarter against earnings of 5.45 rupees the year before.

In the nine months to December 2015, Dipped Products EPS fell to 1.26 rupees with net profit down 91 percent to 75 million rupees and sales down by a quarter to just under 16 billion rupees.

Sri Lankan shares end 4-day winning streak

Reuters: Sri Lankan shares ended a tad weaker on Wednesday, snapping four straight sessions of gains, led by losses in large caps amid poor sentiment due to global economic concerns.

The main stock index ended down 0.36 percent at 6,402.80, slipping from its highest close since Jan. 14 hit on Tuesday.

"We expected things to be positive. But it came down earlier than we expected with the negative sentiments on global markets after the recent gains," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

Turnover was 363.9 million rupees ($2.53 million), well below this year's daily average of 852.2 million rupees.

The index had fallen 7.1 percent this year through Wednesday as foreign investors, unnerved by global concerns over China's economy, cut their exposure.

Foreign investors sold a net 6.97 million rupees worth of shares on Wednesday, extending the year-to-date net foreign outflow to 198.7 million rupees.

Analysts said a rising trend in local interest rates has been a concern and local stocks could come under further pressure.

Yields on treasury bills rose between 7 and 23 basis points at a weekly auction on Tuesday with yields on 182-day and 364-day t-bills rising to more-than-two-year highs, signalling a further rise in market interest rates, which move in tandem with the yields.

Shares of market heavyweight John Keells Holdings Plc eased 0.75 percent, Distillers Company of Sri Lanka Plc fell 1.78 percent and Hemas Holdings Plc lost 2.30 percent.

($1 = 143.9500 Sri Lankan rupees) 

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

Rising costs, slow sales hinder Sri Lanka Haycarb profit growth

ECONOMYNEXT – Sri Lanka’s Haycarb said net profit rose 10 percent to 170 million rupees in the December 2015 quarter from a year ago as energy saving measures helped maintain profitability despite rising costs and slow sales.

Sales of the multinational coconut shell activated carbon manufacturer grew 2.5 percent to 2.9 billion rupees, unaudited results filed with the stock exchange showed.

Basic earnings per share for the December quarter were 5.74 rupees.

EPS for the nine months ending 31 December 2015 rose to 14.41 rupees with net profit up three percent to 428 million rupees from the year before while sales grew five percent to 8.8 billion rupees.

"The company operated under adverse market conditions in its export markets," Haycarb Managing Director Rajitha Kariyawasan said in a statement.

This was because of the economic downturn and currency devaluation and volatility in its major markets in Europe, Russia, China and Australia and continued depressed conditions in the gold industry.

"In addition the high cost of charcoal imports to Sri Lanka and the increase in charcoal prices in Indonesia and Thailand impacted the profit margins," Kariyawasan said.

"Given the challenges in the external environment, focus on lean manufacturing practices and the savings that continue to accrue from energy saving initiatives launched previously helped to maintain profitability."

Haycarb’s environmental engineering arm, Puritas (Pvt.) Ltd., extended business in to the small and medium scale water and waste-water purification systems in Sri Lanka and in the region.

This resulted in a "significant increase" in revenue and profitability in the quarter, Kariyawasan said.

In an effort to strengthen raw material supply networks Haycarb introduced an environmental friendly charcoaling facility in Thailand during the third quarter.

The company will continue to build partnerships through providing technology and funding for environment friendly charcoaling in all its manufacturing locations, Kariyawasan said.

New product development and marketing initiatives together with significant growth in Puritas is expected to boost sales and profits in the short to the medium term, he said.

Textured Jersey Lanka net up 79-pct in Dec quarter

(LBO) – Profits at Textured Jersey Lanka, a fabric maker, rose to 672 million rupees in the December 2015 quarter up 79 percent from a year earlier, the firm said.

Textured Jersey reported earnings of 1.02 rupees per share for the quarter in accounts filed with the Colombo Stock Exchange.

In the nine months to December it reported earnings of 2.04 rupees per share on profits of 1.3 billion rupees, up 64 percent.

Revenues in the December quarter rose 48 percent to 5.6 billion rupees, cost of sales rose at a slower 40 percent to 4.6 billion rupees.

The firm’s gross profits rose 103 percent to 976.7 million rupees. Finance costs rose to 12.0 million rupees from 940,000 rupees.

“The Group gross margin growth is driven by the sustained growth of the acquired entities that were successfully turned around in H1, innovations and increased value additions and execution excellence across the entire Group structure,” the Group said.

“It has further optimized its working capital and remained unleveraged with a net cash surplus of Rs. 2.1Bn.”

Textured Jersey Lanka as a standalone company has recorded a net profit of 402.0 million rupees, which was a 7 percent growth delivered on a top line of 3.9 billion rupees.

“The bottom-line growth is driven primarily from improved operating efficiencies, which is reflected in the gross profit growth of 23 percent.” the company further said.

Rs 10B T Bond auction

Ceylon Finance Today: Central Bank of Sri Lanka (CBSL) plans to raise Rs 10,000 million by selling Treasury (T) Bonds to the market at a primary auction to be held on Friday (5 February).

Those comprise 2020 maturities of Rs 2,000 million in value; Rs 3,000 million worth of 2030 maturities and Rs 5,000 million worth of 2041 maturities respectively.

This will be the third consecutive T Bond auction where CBSL on behalf of the Government of Sri Lanka (GoSL) will be offering 2020 maturities, after rejecting offers made for this tenure in the immediately two preceding auctions held, which, incidentally, were the first two T Bond auctions held for the current year, discounting Friday's to be T Bond auction.

The probable reason for CBSL's rejection of offers made for the 2020 maturity may have had been due to CBSL feeling that the market was asking for higher yields. The last time CBSL sold the 2020 maturity was at an auction held on 23 December, 2015. At that auction, this maturity fetched a WAY of 9.79%, 23 basis points (bps) more than the WAY fetched the last time it was purchased, which was on 18 December, 2015.

Meanwhile, the other two maturities on offer at Friday's auction, namely the 2030 and 2041 tenures, were last sold in the primary market in auctions held on 28.1.16. and 8.1.16. respectively, incidentally those being the two T Bond auctions held thus far for the year (other than the to be held T Bond auction of Friday's).In the 28 January, 2016 auction, the 2030 maturity fetched a WAY of 11.53%, seven bps more than the WAY fetched for this same tenure at the 8 January, 2016 auction. Similarly, the 2041 tenure was last sold at an auction held on 8 January, 2016. In that auction, this tenure fetched a WAY of 12.09%. The 2041 maturity was not offered to the market last year.

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NDBIB raises a record LKR 60bn in 2015

NDB Investment Bank (NDBIB), raised a mammoth LKR 60Bn in debt and equity capital for its valued clients during the year 2015. This is an all-time high for NDBIB surpassing the previous high of LKR 42 Bn achieved in 2013. NDBIB's stellar performance amidst volatile market conditions provides ample testimony to its prowess and leadership in both debt and equity capital markets in Sri Lanka.

Commenting on the successful year, Darshan Perera, CEO of NDBIB, stated "The record performance of NDBIB in 2015 is a direct result of the strength and quality of the team that has been built over the years. NDBIB is proud to have set the benchmark in investment banking in the country and will continue to improve capabilities to better serve our clients".

Heightened level of activity in the debt capital markets were a significant catalyst to NDBIB's performance, particularly in the listed corporate debenture space where NDBIB recorded a 55% market share raising over 46 Bn in 2015. NDBIB also acted as financial advisor and arranger to a syndicated loan facility to finance a luxury resort project in the Maldives amongst its other debt raising initiatives.Furthermore, Resus Energy undertook an exercise to restructure its balance sheet in order to unlock shareholder value via a leveraging and share repurchase exercise utilising NDBIB's advisory expertise. NDBIB also acted as a joint manager to the largest IPO to be carried out on the CSE in 2015 raising LKR 750 Mnfor People's Insurance with healthy levels of investor appetite. Performance was also boosted by activities in the M&A space where NDBIB advised on two transactions valued at approximately USD 33 Mn.

Ms. Kaushini Laksumanage, COO of NDBIB, mentioned "Year 2015 has been a volatile one and we're proud about being able to successfully raise record levels of capital for our clients. We have worked diligently and very closely with our clients to capture the most optimum market window to execute transactions amidst all the volatility". (NDBIB)

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