Bogala closes disappointing 2015,but last quarter encouraging

Drop in demand for graphite in U.S. and Europe

Bogala Graphite Lanka PLC has closed what its chairman, Mr. Vijaya Malalasekera has called a "rather challenging year" ended December 31, 2015, breaking even with a marginal net profit of Rs. 0.2 million, down from Rs. 74.5 million a year earlier, due to a drop in demand for their products in Europe and the U.S. and a volatile Euro.

But he had said that the situation had looked up in the last quarter of the year and he was optimistic of a turnaround in the current financial year.

The chairman reported that despite a 50% increase in demand from the Far Eastern market compared to 2014, the substantial decline in demand from Europe, UK and the US markets and from their (German) parent company had pushed down revenue to Rs. Rs. 583 million from Rs. 607 million the previous year.

Also the product mix had changed with low margin graphite being more in demand compared to graphite that would have sold at higher margins. The drop in demand from the Middle East market too had added to their woes.

"In summary the performance during the year has been disappointing for the company when compared to earlier years," he said. "The primary factor appears to be the lack of sales that have not been forthcoming though anticipated during our budgeting process."

He reported that internationally there had been a reduction in prices of commodities and the minerals market has declined significantly. The management was taking steps to ensure better sales in a challenging environment.

Bogala CEO Amila Jayasinghe said that despite the setbacks, they were heartened by their ability to post a profitable last quarter during the year under review and they would be entering the new financial year on a positive note, better placed to respond to opportunities and challenges that may arise.

They were playing close attention to the activities of their competitors and potential new players in the country’s graphite industry. Given their resources and strategic advantages, they believed they were favorably positioned to meet the challenges ahead.

Their decision two years ago to open the Rangala mine whose accessibility makes it very competitive has paid off with the mine continuing to produce well with a capacity to produce 200 MT per year – an area of potential profit which they planned to exploit.

The year under review had seen the company moving to the Diri Savi board of the Colombo Stock Exchange and capitalizing reserves to give shareholders a one for one bonus shares pushing up the stated capital of the company from Rs. 80 million to Rs. 102 million.

Graphit Kropfmuhl GMBH (79.58%) and Alterna GK LLC (10.33%) are the main shareholders of Bogala with the Secretary to the Treasury owning 0.54%.

The directors of the company are Messrs. Vijaya Malalasekera (Chairman), Frank. E. Berger, Jayampathi Jayasinghe, Thomas A. Junker, Amila Jayasinghe, Torben Muller, Ms. Coralie Pietersz, Sugath Amarasinghe and Mohamed Adamaly.

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Nestle sustains high dividend record on CSE

Billions paid to govt. tax coffers and pumped into rural economy

Nestle Lanka PLC, one of the highest dividend paying companies quoted on the Colombo Stock Exchange, has closed 2015 with revenue up nine percent from the previous year to Rs. 35.9 billion of which Rs. 6.7 billion went to the exchequer and Rs. 7.2 billion to the rural economy and an earning per share of Rs. 76.77 the bulk of which is being paid out to its over 5,000 shareholders.

"In the light of your company’s consistent and solid performance, your directors were pleased to declare an interim dividend of Rs. 34.50 per share on Feb. 23, 2016 and are recommending a final dividend of Rs. 30 per share for your approval," Nestle Chairman Suresh Narayanan has said in the company’s recently released annual report.

The contribution to the rural economy comprised Rs. 3.6 billion to nearly 20,000 local dairy farmers for fresh milk supplied and Rs. 2.6 billion to the coconut industry for procuring fresh coconuts.

Narayanan noted that Nestle which will celebrate the milestone of a 110-year presence in Sri Lanka this year – and a global presence of 150 years – looked forward to making 2016 "the first successful year of our next 150 years."

The company’s MD/CEO Shivani Hegde described the year under review as a good one for Nestle, delivering strong results in what had been a challenging year. She reported that their "much loved power brands, Nestomalt, Milo and Maggi" had played an important role in fuelling the company’s growth.

"Nespray which comes to consumers with the goodness of Sri Lankan milk and the Nestlé’s global expertise in child nutrition, strengthened its portfolio with the launch of Nespray Nutri-Up, a ready-to-drink product fortified with vitamins A and D," she reported.

She reported they had continued to invest in Sri Lanka’s rural economy contributing more than six billion rupees to almost 25,000 local farming families to purchase fresh milk and coconuts for their products; and remained committed to manufacturing as efficiently as possible, reducing energy consumption by 40% and water consumption by 39% over the last seven years.

The year under review saw Nestle growing revenue to Rs. 35.85 billion from the previous year’s Rs. 32.9 billion and the after tax profit to Rs. 4.12 billion from Rs. 3.79 billion.

The company’s stated capital stood at Rs. 537.25 million and retained earnings at Rs. 3.98 billion. The Nestle share traded at a high of Rs. 2,390 and a low of Rs. 1,960.40 during the year under review.

Nestle S.A. with 90.82 percent of the company is the controlling shareholder. Much of the balance in held by foreign funds with the EPF owning 0.19%. There are a handful of resident local shareholders in the top twenty list.

The directors of the company are Messer’s. Suresh Narayanan (Chairman), Shivani Hegde (MD), Jagdish Kumar Singla, Shobinder Duggal, Mahen Dayananda and Ranjan Seevaratnam.

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