Sri Lanka’s Hayleys net up 49-pct in March 2016 quarter

(LBO) – Profits at Sri Lanka’s diversified Hayleys group surged 49 percent to 1.3 billion rupees in the March 2016 quarter amid strong net income growth, interim accounts showed.

The group reported earnings of 17.57 rupees per share for the quarter, up from 11.83 rupees per share from a year earlier.

Group revenues rose 2 percent to 24.6 billion rupees and cost of sales rose at a slower 1 percent to 18.2 billion rupees making gross profit to grew 6 percent to 6.36 billion rupees.

Other income rose to 322 million rupees, from 182 million rupees a year earlier and distribution expenses rose 46 percent to 906 million rupees.

Finance income rose to 242 million rupees, from 93 million rupees a year earlier.

Hayleys posted a profit before tax of 6.8 billion rupees for the financial year, a 7 percent increase over the previous year.

Earnings per share increased to 40.05 rupees from 34.42 rupees per share in the previous year.

The group’s income tax paid during the year inclusive of super gain tax amounted to 2.3 billion rupees and it ended the year with a group turnover of 92 billion rupees.

“Hayleys has focused on the segments with the greatest long-term growth potential,” CEO Mohan Pandithage said.

“All our sectors have shown profitability while we have further strengthened our market leadership in most of the sectors we operate in.”

The transportation sector contributed 1.5 billion rupees profit to the group bottom line and agriculture sector profits grew to 1.2 billion rupees from 1 billion rupees in the last fiscal year.

The purification sector contributed over 1.2 billion rupees in profits for the financial year.

As at 31 March 2016, net assets per share was at 411.40 rupees against 388.05 reported a year earlier.

Annualized price earnings ratio stood at 6.13 rupees at the end of financial year against 8.72 rupees recorded a year ago.

Sri Lanka's Dipped Products buys full control of Italian marketing unit

ECONOMYNEXT – Sri Lankan rubber gloves manufacturer Dipped Products said it has bought full control of ICOGUANTI S.p.A., its Italian marketing company, with an investment of 3.2 million euro (about 535 million rupees).

The firm, part of the Hayleys Group, said that with the latest investment, ICOGUANTI S.p.A., which was a 60% owned subsidiary, was now a fully owned unit of the company.

Sri Lanka appoints managers for billion dollar sovereign bond: Finance Minister

ECONOMYNEXT - Sri Lanka has appointed eight financial institutions to manage a sovereign bond of at least a billion US dollars which may go to the market next month, Finance Minister Ravi Karunayake said.

Sri Lanka may take more than a billion US dollars if the rates are favourable, he told a meeting of Sri Lanka's Foreign Correspondents Association.

Four investment banks and four non-banks were in the group, he said.

Sri Lanka has reached preliminary agreement with the International Monetary Fund for a 1.5 billion US dollar Extended Fund Facility, which is expected to get the lender's Board approval in early June.

Sri Lanka's Central Bank Governor Arjuna Mahendran had said earlier that the country would go to the market armed with the IMF deal as rates would be lower.

Conditions in international capital markets have with the US expected to raise interest rates in a June meeting of the Federal Reserve, but Sri Lanka was confident of raising funds Karunayake said.

"There is a lot of money in the Middle and Asian areas," he said.

Sri Lanka would raise more than a billion dollars if rates were favourable, he said.

Sri Lanka is expecting wrap a 500 million US dollar three year syndicated loan with Citi, Emirates NBD, HSBC as early as next week to which Credit Suisse was also joining.

Karunanayake said Sri Lanka was in talks with Credit Suisse to float another 500 million dollar loans and was also eying Sukuk and Panda bond markets.

"We are looking at all options and will be taking the best ones," Karunanayake said.

Sri Lanka has a budget limit of raising 3.5 billion dollars in foreign loans this year.

Sri Lanka rolls over maturing Treasuries, yields up

ECONOMYNEXT - Sri Lanka's 3 and 6-month Treasuries yields edged up at Wednesday's auction with bids for 12-month bills rejected, data from the state debt office showed.

The debt office sold 9.15 billion rupees of 3-month bills at 8.71 percent up 05 basis points from a week earlier and 21.5 billion rupees of 6-month bills at an average yield of 9.67 percent, up from 9.40 percent on May 11.

A total of 30.7 billion rupees of bills was sold, successfully rolling over an estimated 30.6 billion rupees of maturing bills.

Sri Lanka's central bank precipitated a balance of payments crisis by rejecting bids and purchasing Treasuries to its own balance sheet, but there has been a series of successful auctions over the last few weeks.

When the central bank buys Treasuries with printed money (central bank credit), excess credit and imports puts pressure on the rupee. Unless the cash is mopped up in forex market by dollar sales the rupee will fall.

Sri Lanka JKH March profit down 13-pct

ECONOMYNEXT – Sri Lanka’s John Keells Holdings group said March 2016 quarter net profit fell 13 percent to 4.5 billion rupees from a year ago.

Sales were flat at 24.9 billion rupees, according to interim results filed with the stock exchange.

Other operating income fell while finance costs surged 300 percent to 529 million rupees from the year before.

Diluted earnings per share for the quarter were 3.79 rupees. EPS for the year ended 31 March 2016 were 12.09 rupees.

Annual net profit fell 02 percent to 14 billion rupees while sales went up just 02 percent to 93.3 billion rupees.

Sri Lankan shares snap losses to end higher, but foreign investors sell

Reuters: Sri Lankan shares snapped three straight sessions of losses on Wednesday to edge up from a 3-week closing low despite foreign investor outflows, as investors picked up telecom and diversified shares.

The benchmark stock index rose 0.2 percent, or 12.91 points, to 6,583.49, edging up from its lowest close since May 4 hit on Tuesday. It fell 1.12 percent last week, its first weekly fall in seven weeks.

"Market ended in the green zone, but the foreign selling is worrying," said Yohan Samarakkody, head of research, SC Securities (Pvt) Ltd.

Foreign investors net sold 446.4 million rupees ($3.05 million) worth of shares on Wednesday, extending the year to date net foreign outflow to 4.71 billion rupees worth of shares.

Shares in Dialog Axiata Plc rose 0.89 percent while Hemas Holdings Plc rose 2.58 percent, pushing up the overall index.

Top conglomerate John Keells Holdings, which on Tuesday announced a share subdivision, gained 0.2 percent. After the market closed, Keells posted a 13 percent fall in March quarter earnings.

Turnover stood at 952.2 million rupees ($6.52 million), more than this year's daily average of around 797.8 million rupees. 

($1 = 146.2000 Sri Lankan rupees) 

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

Central Bank following up on Panama Papers’ Lankan names

Sri Lanka is following up on the disclosure of Sri Lankan individuals who were named in the Panama Papers leaks, Central Bank Governor, Arjuna Mahendran said.

Speaking to Daily News Business he said that Central Bank Financial Intelligence Unit (FIU) has contacted authorities in Panama to obtain an official list of these people.

“Subsequently we will take appropriate steps after concluding the Sri Lanka Customs, Inland Revenue Department and may be event the Police Department unit to commence investigations,” he said.

Several companies and individuals with links to Sri Lanka were on the list, and more than 50 Sri Lankan addresses were also identified in the papers.

On May 9, client data stolen from the Mossack Fonseca law firm in Panama was published online by the ICIJ as part of its Offshore Leaks database.

The searchable database contains a portion of the offshore financial records given to the journalists by anonymous whistle-blowers since 2013; it does not include leaked emails and other explanatory data that ICIJ reporters use to write about the offshore financial holdings of newsworthy individuals.

The so-called Panama Papers, a trove of 11.5 million financial documents tracing the Mossack Fonseca law firm’s efforts to help politicians, celebrities and criminals shield their money from taxes, contain links to Soros, who funds the journalism group that is disseminating the information. So far, the International Consortium of Investigative Journalists (ICIJ) has been silent on its benefactor’s ties to the law firm.

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Govt.’s 4 year development plan coming soon!

• PM unveils plans to release master plan in two weeks during National Summit on Foresight and Innovation address
• Medium term strategy to ensure rapid sustainable development 
• Stresses need for Sri Lanka to join global value chain, improve living standards
• Says SL can harness human resources and strategic position in the Indian Ocean to innovate
• Insists Megapolis must be large city in Asia, but also sustainable and livable
• Emphasises need for reconciliation and strengthening democracy

By Dharisha Bastians

The Government will unveil its four year development plan in two weeks, focused on rapid sustainable development to improve the country’s living standards and harness Sri Lanka’s strategic location and human resources, Prime Minister Ranil Wickremesinghe said yesterday.

Prime Minister Wickremesinghe, who participated in a Panel Discussion at #2030NOW, the National Summit on Foresight and Innovation for Sustainable Human Development last evening, said the Government was also looking to set up a Sustainable Development Council, a proposal that would be put to Cabinet and eventually to Parliament. The Premier said that Sri Lanka must join the global value chain, and the country’s economy must change and become more competitive. “We are living in an age profits alone, competition alone is not sufficient. Have to ensure people have good living standards to avoid popular revolts due to economic inequality,” Wickremesinghe explained.

He said a lot of countries had sacrificed the environment, their values and democracy for the sake of economic development. The Government was hoping to ensure development initiatives remained sustainable, Wickremesinghe added.

The Premier who addressed the session on “Reimagining Governance: An Opportunity for Sri Lanka,” posed important questions: “Can a Government have a dream? Can a Government have a vision? Just after 1947, Sri Lanka was leading Asia in economic and social development. What happened to us, that others overtook us? What happened to us, that we got left behind?”

The people of Sri Lanka want to catch up on lost opportunities, Premier Wickremesinghe noted.

“This is a challenging task, and in a democracy, to meet challenges you need consensus and a challenging team. This is why we have opted for a National Government – what we could not achieve as two separate political parties, perhaps we can achieve together,” Wickremesinghe hoped.

Outlining the two fold strategy for economic prosperity and innovation, Prime Minister Wickremesinghe said the Government was focused firstly on reconciliation and strengthening democracy. “Without reconciliation, the end of the war will never bring peace. We will never be one nation. Without strengthening democracy there will be no free flow of ideas that could lead to innovation,” he explained.

Wickremesinghe also highlighted the need to strengthen economic cooperation across the globe through free trade agreements and economic partnerships.

Since time immemorial Sri Lanka has traded with the world, but to trade with the world today the country requires an edge in a competitive market system, he explained.

“First we need to move in and ensure we have a sufficient number of FTAs which will enable you to deal with a large number of countries. We need to focus on economic and trade cooperation from Europe to Japan, including India, China, Malaysia, Indonesia, Thailand and Korea. Where all this leads for us is an agreement with the United States – of course this will be decided only after November 2016,” the Prime Minister said, referring to the US Presidential election.

Sri Lanka needed to focus on its greatest capital – human resources – and build on this resource and skills. “A policy for human development, combined with our strategic position, can lead to innovation,” the Premier told summit participants at Water’s Edge, Battaramulla at the closing session.

Wickremesinghe said part of the Government’s plan to make Sri Lanka competitive included its ambitious plans to turn the Western Province into a mega city.

“We will make it a large, livable city in the Indian Ocean. There are many issues left to be resolved, as last week’s flooding showed us – much of the disaster was man made,” he said.

The Prime Minister said the Megapolis must not only be the largest city in the Indian Ocean, but it must also rank high in sustainable development. “It must be a livable city. In South Asia now many cities are no longer livable,” Wickremesinghe explained.

As Sri Lanka puts plans in place for innovation and technology to boost economic growth, Prime Minister Wickremesinghe emphasised that it was important not to forget the countryside, and the Government would strive to modernise the rural economy.

In the war-battered Northern Province, it was not only the economic fabric that had been destroyed, but also the social fabric that tied communities together, the Prime Minister said.

“In the north now, a village is a group of houses built in one place. We have to find a way to restore the social fabric and build community in these regions. The culture in the north is strong enough to rebuild,” he asserted.

The session attended by Prime Minister Wickremesinghe was moderated by UNDP Resident Representative, Peter Batchelor and included Vice President, myForesight Institute, of the Government of Malaysia, Director of Mindlab, Government of Denmark, Thomas Prehn, Performance and Social Innovation Lead – eGov Center, Government of Moldova, Cornelia Amihalachioae and Lead, Kolba Lab, UNDP Armenia, Marina Mkhitaryan.

www.ft.lk

Sri Lanka’s John Keells Holdings to subdivide ordinary shares

(LBO) – Sri Lanka’s diversified John Keells Holdings has decided to subdivide ordinary shares of the company while making an adjustment to its warrants.

The company said in a stock exchange filing, the directors have recommended a share subdivision where by every seven existing ordinary shares will be subdivided to eight ordinary shares.

Accordingly, number of ordinary shares as well as the number of warrants in issue will be increased and the purchase price of a warrant will be reduced to 149.29 rupees from 170.62 rupees.

John Keells Holdings said the number and exercise price of employee share options in issue will also be adjusted proportionately.

The proposed subdivision is subjected to shareholder approval at an extraordinary general meeting.

A share subdivision is generally the opposite of a consolidation with the number of shares in issue being increased by a set ratio.

In turn the nominal value of the shares and the market price per share of the shares will decrease by the same ratio.

Fitch assigns ‘A(lka)’ to Sampath Bank debentures

Fitch Ratings has assigned Sampath Bank’s Basel II-compliant subordinated debentures of up to Rs 6 bn, a final National Long-Term Rating of ‘A(lka)’.

The final rating is the same as the expected rating assigned on April 26, 2016 and follows the receipt of documents conforming to information already received.

The debentures will mature in five years and carry fixed and floating coupons. Sampath Bank plans to use the proceeds to strengthen its Tier 2 capital base. The debentures are to be listed on the Colombo Stock Exchange.

The issue is rated one notch below Sampath Bank’s National Long-Term Rating to reflect the subordination to senior unsecured creditors.

The Outlook is Stable.
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Asian Alliance Insurance posts Rs 267 mn profit in Q1

Asian Alliance Insurance posted impressive growth for the first quarter of 2016.

Asian Alliance Insurance PLC recorded a profit after tax (PAT) of Rs 267.2 million for the first quarter of 2016 for Life business where profits were determined based on actuarial assessment, whilst the combined profit after tax including its fully owned subsidiary Asian Alliance General Insurance Ltd was Rs 212.4 million.

Life insurance premiums topped the billion rupee mark to reach Rs 1.4 billion, with a growth of 48% compared with the same period of the previous year,double the industry growth of 23% for the first quarter of the 2016.

The Company has stepped up the intensity of its operations with a number of industry firsts in its Life business. Amongst these, ‘eAdvisor’ which is the latest technological innovation from the country’s most innovative insurance provider, will simplify and streamline a range of functions, by eliminating paper and by enabling instant generation of Life Insurance quotations.

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Hayleys posts Rs. 6.8 billion in PBT

Hayleys has posted Profit before Tax (PBT) of Rs. 6.8 billion for the financial year 2015/16, a 7% increase over the previous year.

Earnings per Share (EPS) increased to Rs. 40.05 from Rs. 34.42 per share in the previous year. This strong growth reflects the effectiveness of the conglomerate’s focused strategy on expanding its core business sectors and ended the year with a Group turnover of Rs 92 bn. The Group’s Income Tax paid during the year, inclusive of Super Gain Tax, amounted to Rs 2.3 bn.

Hayleys PLC Chairman and Chief Executive, Mohan Pandithage said, “Hayleys has focused on the segments with the greatest long-term growth potential and I am extremely pleased to note that all our sectors have shown profitability while we have further strengthened our market leadership in most of the sectors we operate in.”

The Transportation and Logistics Sector contributed Rs. 1.5 billion Profit Before Interest and Tax (PBIT) in profits to the group bottom line. The sector has continued to drive new business opportunities both locally and internationally and has introduced a number of outstanding innovations across its business segments that boost its service offerings. Among the noteworthy new ventures is the Hayleys - Free Zone, a state-of-the-art entreport trade facility, including cold storage, which offers businesses the opportunity to value-add and repackage products for export.

Agriculture sector PBIT grew to Rs. 1.2 billion from Rs. 1 billion in the last fiscal year. The sector diversified into a number of new business areas during the last two years, which have contributed to growth.

The Purification sector contributed over Rs. 1.2 billion in PBIT for the financial year 2015/16.In addition to being a major contributor to Group profits, the sector has also lead the Group’s efforts to improve the living and economic conditions of the people in the North and North Central Province suffering from Chronic Kidney Disease (CKD). As of May 2016, Hayleys companies have contributed over Rs. 44 million towards setting up ten Reverse Osmosis (RO) plants. The ten plants provide a cumulative 100,000 litres of clean drinking water per day to 15 villages and over 20,000 people in the region.
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