India’s Oberoi hotels group keen to return to Sri Lanka

ECONOMYNEXT - India’s Oberoi hotels group wants to return to Sri Lanka and is interested in partnering with owners of island properties that are well located, a senior company official said.

“Anyone wants to speak to us of great locations they have, we would love to partner with them,” Kapil Chopra, President of The Oberoi Group told a tourism forum in Colombo.

“We’re open to equity partnerships, management contracts, we’re open to buying out owners,” he said.

While historically the Oberoi group has taken equity stakes in hotels they operate, it is also happy to do pure management contracts, Chopra said.

The Oberoi group built a hotel in Colombo in the 1970s but subsequently quit the island in the middle of an ethnic conflict whose end in 2009 led to a boom in arrivals.

Chopra said Sri Lanka has “room for growth” having received almost 1.8 million tourists in 2015 compared with Thailand’s 25 million and India’s seven million.

Almost a quarter of visitors were staying for a week or two “which means a good length of stay,” he told the Tourism, Hotel Investment & Networking Conference (THINC) organised by HVS, a hospitality consulting firm.

“And real estate valuations (in Sri Lanka) are a fraction of what they are in India. These are three things that make it a very attractive market for us.”

For the Oberoi group location of hotels was critical.

“We want each one of our hotels to be unique – we’re a luxury operator. We cannot compromise on location because we can’t compromise on the overall experience.”

Sri Lanka's Dialog may buy Airtel unit with share swap: report

ECONOMYNEXT - Sri Lanka's Dialog Axiata may acquire a unit of Bharti Airtel in the island by issuing its own stock for shares of the smaller player, a media report said.

India's Economic Times newspaper citing unnamed sources said the stock could be issued to a Singapore based unit of Airtel and negotiations were ongoing.

Axiata had already merged its Bangladesh units with Airtel.

Economic Times said Airtel said there was no development to report now and Dialog had declined to comment on "news which are of a speculative nature."

The reports said Dialog had 10 million customers and Airtel 2 million, raising concerns over competition.

Sri Lanka's Telecom minister Harin Fernando said earlier this month that authorities had been sounded out over the take-over.

However critics say Sri Lanka's telecom regulator had also already supported anti-competitive practices and stifled competition with floor rates.

Sri Lanka's Sunshine Holdings Dec net up 69-pct

ECONOMYNEXT - Profits at Sri Lanka's Sunshine Holdings Plc, which has interests in consumer goods, farming, pharmaceuticals and power rose 69 percent to 175 million rupees in the December 2015 quarter from a year earlier.

The group reported earnings of 1.30 rupees per share. In the nine months to December the group reported earnings of 3.77 rupees per share, on profits of 508 million rupees, which grew 25 percent.

The group said revenues grew 5 percent to 4.2 billion rupees, costs rose at a slower 4 percent to 3.1 billion rupees allowing gross profits to grow 10 percent to 1.13 billion rupees. In 2015, there was a one-off 61 million rupee write off of goodwill.

In the 9 months gross profits rose 13 percent to 3.1 billion rupees.

Chairman Vish Govindasamy, said healthcare revenues grew 17.2 percent to 5.3 billion rupees and after tax profits grew to 264 million rupees from 174 million rupees.

Consumer goods revenues grew 19.7 percent to 2.5 billion rupees and after tax profits grew to 343 million rupees from 245 million rupees.

Agricultural revenues fell 12.6 percent to 4.6 billion with tea and palm oil prices falling, but after tax profits grew to 450 million rupees from 409 million helped by a focus on quality, Govindasamy said.

In Sri Lanka palm oil prices are kept up with import duties.

Power sector revenues had grown to 104 million rupees from 88 million with better rainfall.

Sri Lanka Hayleys group December quarter net down 27-pct

ECONOMYNEXT - Sri Lanka Hayleys group said December 2015 quarter net profit fell 27 percent to 534 million rupees from a year ago,

Sales were virtually flat at 23.6 billion rupees, according to unaudited accounts filed with the stock exchange.

Earnings per share for the quarter were 7.12 rupees.

EPS for the nine months ending December 31, 2015 were 22.48 rupees with net profit flat at 1.7 billion rupees and sales also flat at 68 billion rupees.

“The group’s results reflect the challenges faced by the plantations and hand protection sectors during the nine months in review,” a statement said.

“The plantation sector faced a number of challenges during the year including the global commodities crash which caused lower tea and rubber prices , and lackluster demand from traditional markets, compounded by inclement weather in Sri Lanka.”

Hayleys glovers business also faced “significant mixed challenges” from the global market as Sri Lanka faced relatively higher input prices compared to competing countries, the statement said.

“The company has already initiated a number of projects to move into more value added hand protection products to overcome the price sensitivity in the mass produced glove segments.”

Sri Lankan stocks end at over 3-wk low on weak global cues

Reuters: Sri Lankan shares fell for the fourth straight session on Thursday to end at a more than three-week low, as weaker global markets weighed and as investors stayed off risky assets on concerns over rising domestic interest rates.

Turbulence tore through global markets on Thursday as investors sought the safety ofJapanese yen, gold and top-rated bonds while dumping U.S. dollars on bets the Federal Reserve could be done with raising interest rates.

Sri Lanka's main stock index ended 0.78 percent or 49.58 points weaker at 6,314.82, its lowest close since Jan. 20.

"Weak economic conditions are the main cause for the lack of confidence among the investors, and also the investors are expecting interest rates to go up further," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

The key index has fallen 8.4 percent this year through Thursday.

Yields on t-bills rose between 8 and 17 basis points at a weekly auction on Wednesday, with the 182-day and the 364-day t-bill yields rising to over two-year highs, signalling a further rise in market interest rates.

Some investors are shifting to fixed interest rate-bearing assets due to a gradual rise in interest rates, analysts said.

Foreign investors were net buyers of 22.2 million rupees (about $154,273) worth shares on Thursday, but they have been net sellers of 188.7 million rupees worth of equities so far this year.

Turnover was 207.2 million rupees, less than a third of this year's daily average of 749.99 million rupees.

Shares of conglomerate John Keells Holdings Plc fell 2.4 percent, while Hemas Holdings Plc lost 4.9 percent and the biggest listed lender Commercial Bank of Ceylon Plc dropped by 1.40 percent. 

($1 = 143.9500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

India tops tourism arrivals overtaking China

Tourist arrivals to Sri Lanka in January 2016, saw a 24.3% increase as against the previous year’s corresponding month. By end January there were 194,280 arrivals.

After a long period India once again topped the arrivals list overtaking China. The number of arrivals from India grew 26 percent to 28,895 in January 2016 from a year ago while that from China. Chinese arrivals recorded 26,083 which is an all time record 122.3%. United Kingdom remained the biggest contributor from Europe with a 21% increase and accounting 16,253 visitors last month while Germany grew 23% to 12,760. Gulf arrivals was disappointing accounting 10,109.

Despite direct air services Kuwait arrivals saw a minus growth. However in comparison to 2015 January it has seen a 14% increase. Both Thailand and Pakistan arrivals also saw a major decline with arrivals dropping.

Also despite the former Sri Lanka Tourism Promotions Bureau officials spending millions of rupees and conducting road shows and going on tours,the Russian market also saw a dip in arrivals. (SS) 

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Sri Lanka’s John Keells Hotels December net down 13-pct

ECONOMYNEXT – Sri Lanka’s John Keells Hotels said net profit fell 13 percent to 365 million rupees in the December 2015 quarter from a year ago.

Sales of the company, a unit of the John Keells Holdings group, were virtually stagnant at 2.8 billion rupees, interim results filed with the stock exchange showed.

Sales were stagnant at both Sri Lankan and Maldivian hotels but profits were up slightly in the Sri Lankan hotels and down in the Maldivian resorts.

Earnings per share for the December quarter were 25 cents.

EPS for the nine months ending December 2015 fell to 58 cents from 61 cents with net profit down five percent to 846 million rupees and sales virtually stagnant at eight billion rupees from a year ago.

Sri Lanka’s Lighthouse Hotel December net up 44-pct

ECONOMYNEXT – Sri Lanka’s Lighthouse Hotel, part of the Jetwing Hotels group, said net profit rose 44 percent to 50 million rupees in the December 2015 quarter from a year ago.

Sales rose 14 percent to 225 million rupees over the period, interim results filed with the stock exchange showed.

Earnings per share of the hotel, in which a state pension fund and two banks hold 24 percent, were 1.02 rupees for the December 2015 quarter.

EPS for nine months ending December 2015 fell six percent to 1.17 rupees although sales went up seven percent to 543 million rupees with the firm suffering a foreign exchange loss of 11 million rupees from conversion of a foreign currency loan.

The accounts show the Employees Provident Fund has an 11.05 percent stake of Lighthouse Hotel, Bank of Ceylon 9.78 percent and National Savings Bank 3.43 percent.

A note to the accounts said construction of an additional four dwellings with a new swimming pool at Jetwing Kurulubedda, a boutique hotel in Galle, had been completed and in operation from October, 2015.

Lanka Tiles December quarter net up 173-pct

ECONOMYNEXT – Sri Lankan floor tile maker Lanka Tiles said December 2015 quarter net profit shot up 173 percent to 533 million rupees from a year ago as it continued to benefit from the ongoing construction boom.

Sales rose 11 percent to almost two billion rupees with exports down but domestic sales up by almost 12 percent, interim results filed with the stock exchange showed.

Lanka Tiles had record sales in December 2015 enabling it to clear stocks, its Managing Director Mahendra Jayasekera said.

The firm’s floor tile plants are running at full capacity, he told EconomyNext.com, with the group diverting more of its production to the local market.

The interim accounts show the company, now part of the Royal Ceramics group, kept costs about the same but tax costs were sharply lower in the December 2015 quarter compared with the year before.

Quarterly earnings per share were 10.6 rupees. In the nine months to 31 December 2015, EPS rose to 18.94 rupees from 10.06 rupees the year before.

Net profit rose 88 percent to just over a billion rupees while sales rose six percent to 4.6 billion rupees in the nine month period from the year before.

Sri Lanka Access Engineering Dec quarter net flat

ECONOMYNEXT – Sri Lanka’s Access Engineering said December 2015 quarter net profit rose 2.6 percent to 545 million rupees from a year ago with modest growth in core construction earnings outpaced by that from a vehicle importing subsidiary.

Sales rose 2.8 percent to 4.2 billion rupees in the quarter, interim results filed with the stock exchange showed.

December quarter profit from its Sathosa Motors unit rose sharply to 250 million rupees from 174 million rupees while other income fell by almost half.

Earnings per share for the quarter were 54 cents. In the nine months to 31 December 2015 EPS rose to 1.83 rupees from 1.71 rupees.

In the nine month period, net profit rose 6.8 percent to 1.8 billion rupees while sales rose 10.6 percent to 13 billion rupees from the year before.

Access Engineering’s Horizon Holdings Venture and Horizon Knowledge City Limited units made losses.

Sri Lanka Treasuries yields up, Rs28bn sold

ECONOMYNEXT - Sri Lanka's 12-month Treasuries yield rose 08 basis points to 7.95 percent at Wednesday's auction, the state debt office said, with data indicating that a successful auction may have been held.

The 6-month yield rose 17 basis points to 7.57 percent. Three month bills were not offered.

The debt office sold 28.04 billion rupees of bills made up of23.5 billion rupees in 6-month bills and 4.5 billion rupees of 12-month bills.

There is an estimated 28 billion rupees of maturing bills this week, indicating that this week's auction may have been successful after a long series of failures, where large volumes of money was printed week after week injecting liquidity to the banking system.

However it is not known whether the central bank purchased bill over and above maturing bills. Data of central bank purchases at auctions are no longer made to the public at the close of the auction.

In the mid-1990s, auctions of Treasury bills and bonds were started to stop central bank credit (printing money) and end financial repression and currency collapse.

Central bank credit used to finance the budget deficit and keep interest rates down was identified as the core problem with Sri Lanka's economy as far back as 1966 in a report by Indian economist B R Shenoy.

Sri Lanka's Central Finance net up 19-pct

ECONMYNEXT - Profits at Sri Lanka's Central Finance Plc, a non-bank lender rose 18.9 percent from a year earlier to 1.17 billion rupees in the December 2016 quarter helped by lower loan loss provisions, interim accounts showed.

The group reported earnings of 10.95 rupees per share. In the nine months to December it reported earnings of 30.79 rupees per share on total profits of 3.2 billion rupees which grew 17 percent.

In the December quarter interest income grew 4.3 percent to 3.2 billion rupees, interest expenses fell 5.4 percent to 952 million rupees and net interest income rose 9 percent to 2.2 billion rupees.

Loan loss provisions fell 61 percent to 219 million rupees from a year earlier.

Leases and hire purchases grew from 50.1 billion to 56.2 billion rupees over the past nine months.

Group gross assets grew from 71 billion rupees to 77 billion and net assets to 27.5 billion rupees from 25.1 billion.

Distilleries Company posts Rs. 1.78 bn profit in Q3,2015

Distilleries Company of Sri Lanka (DCSL) posted Rs. 1.78 billion profits for third quarter of 2015.This is an increase of 10.7% as against same corresponding period last year. Revenue from spirits increased to Rs 18.9 billion which saw a 37% increase.

During the period under review beverages brought Rs 6.1 billion in profit before tax (PBT).

The Financial services are too made a made profits of Rs. 224 million which saw an increase of Rs.10 million as against the same period last year. However the company saw a dip from the plantation sector where it has a Rs 310 million loss.

DCSL Group lead by its flagship Distilleries Company of Sri Lanka manages diversified blue chip portfolios.

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Litro Gas posts Rs. 6 bn profits in 2015

Litro Gas has posted a record year with gross profits of over Rs.6 billion with significant increases in volumes (22pct) and market growth (acquiring a total 485,548 new connections).

The market leader has grown its reach, to make LPG available in all areas of the island through a network of over 5,000 dealers.

"It is of utmost importance that Litro Gas be available in all rural areas,"Chairman Shalila Moonesinghe said.

"In doing so Litro Gas has maintained the highest safety standards ensuring that quality products are delivered to all our valued customers."

Litro Gas Lanka Managing Director Muditha Peiris said Litro Gas managed to grow its market by creating over 485,000 new connections. "This has led us to a record year in 2015 with gross profits of over Rs.6 billion." Highest ever volumes were also seen during 2015 with the company recording volumes of over 209,000 metric tons. This amounts to another record in terms of volume growth of over 22pct.

"We continue to invest in our people to ensure that safety is maintained throughout our value chain" . "We have upgraded our cylinder refurbishment facilities in order to deliver a better product." Peiris mentioned referring to the company's new investments in cylinder maintenance and re-painting. "With these improvements Litro Gas will improve its quality and standards".

Litro Gas continues to focus on its staff ensuring there is continuous development and growth within the organization. 2015 has seen many staff being promoted within the organization recognizing their exceptional skills.
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Sri Lanka targets 4.2 mn arrivals by 2020

Tourism Hotel Investment and Investment Conference 2016 kiked started on February 10, 2016 and would continue till February 11 at the Galle Face hotel. Among the many aspects brought out in the conference, it was impressed upon that Sri Lanka with all it has to offer should try to bring in more brands into the country. Managing Director India and regional VP south Asia, Star wood Hotels and resorts stated that bringing in more branded hotels into the country will automatically increase the desirability of the country and create a suitable environment to reach an upper-end market.

It was mentioned in the presentations carried out throughout the conference that Sri Lanka hopes to reach a target 4.2 million tourist arrivals into the country by the year 2020 which would bring in around 200 new hotels and an addition of 11,000 rooms to the hotel industry. Minister of Tourism Development, John Amarathunga said that by the year 2020 the tourism sector will be employ over 640, 000. While the total contribution of travel tourism to the country's GDP is forecasted to elevate itself by 6.1% to 10.5%of GDP by the year 2026.

Speaking at the inaugural session, Chairman MRICS, Manav Thadani said that although Sri Lanka is known as a leisure destination and around 86% of the tourists arriving at the country are leisure bound, it is Business travel which is around 13 % that shows a growing trend.

The conference represents a mix of fourteen countries out of the total of 170 participants.

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Shangri-La to build third hotel in SL

Shangri-La, Asia Pacific's leading luxury hotel chain, is looking at building a third hotel in Sri Lanka.

This was disclosed by Vice President of the group, Madhu Rao who met the Minister of Finance, Ravi Karunanayake yesterday.He had indicated that they are happy with the investment climate in Sri Lanka and would look at reinvesting in Sri Lanka.

"This would be by way of another hotel and other investments," a Finance Ministry official said. The first hotel in Hambantota would be opened end of this year while their second hotel US$ 500 million mixed development project at Galle Face would be ready by end 2017.(SS)

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Ceylinco General, Ceylinco Life post Rs. 27 bn premium income

The Colombo Stock Exchange included Ceylinco Insurance amongst the S & P Sri Lanka 20 index constituents at the annual index rebalance announced in December 2015. Ceylinco General Insurance Ltd and Ceylinco Life Insurance Ltd, announced excellent results for the year ended December 31,2015, recording yet another remarkable year.

Ceylinco Insurance joint Managing Director and Chief Executive Officer Ajith Gunawardena said during 2015, the company recorded a premium income of Rs.13.5 billion Rs.13,557 million), recording an impressive growth of 11.4 %, which signifies an increase of Rs.1.4 billion over the previous year. "Last year's performance was exceptional, and one of the best results recorded in the recent past,"he said.

Elaborating on the Life Insurance company's results, Joint Managing Director and Chief Executive Officer R Renganathan said Ceylinco Life Insurance Ltd achieved a premium income of Rs.13.4 billion (Rs.13,456 million), recording an impressive growth of 12.1%, or Rs.1.4 billion over 2014.Our performance represents a consolidation of our leadership in the life insurance industry for the 12th consecutive year."

The overall premium income of Ceylinco General and Ceylinco Life reached Rs.27 billion, indicating an increase of Rs.2.8 billion or an overall growth of 11.7% over the previous year.

Ceylinco General Insurance Managing Director Patrick Alwis said: "Ceylinco General Insurance paid claims amounting to Rs.6.4 billion during 2015, providing full settlement of all genuine claims in the quickest possible time, signifying an increase year on year of 14% in settled claims."

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Cargills profits surged to Rs 1.2 bn

Cargills Ceylon PLC, a CT Holdings Company, reported a turnover of Rs 18.0 billion for the third quarter ending on December 31, 2015.

Group Gross profit for the nine months ended was Rs 5.7 billion while Operating profit reached Rs 2.4 Billion. Net profit for the nine months was Rs 1.2 billion.

The Retail business saw a strong turnaround for the nine months ended backed by a positive consumption.

Environment reinforced by strong focus on enhancing service levels and driving efficiency across the value-chain. The Retail sector reports an Operating Profit of Rs 1.2 Billion on a gross turnover of Rs 41.4 billion for the nine months ended.

The FMCG Sector has continued a stable performance with gross turnover reaching Rs 12.9 billion for the nine months ended while Operating Profit was Rs 1.1 billion. The double-digit growth reported by our agriculture, dairy and livestock processing businesses indicates category growth driven by our strong portfolio of national brands.

The Restaurants business is consolidating its upward trend bolstered by enhanced consumer spend.

The sector recorded a top line of Rs 2.1 billion for the nine months under review while Operating Profit was Rs 104.1 million.

The performance of the Group for the nine months ended demonstrates the results of concerted efforts to enhance business efficiency and productivity.

This would be further strengthened in the year ahead while the investment strategy would be focused on consolidating the business potential of every sector in line with future growth opportunities.
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