Sri Lanka’s Access Engineering buys stake in property firm for Rs800mn

ECONOMYNEXT – Sri Lankan construction group Access Engineering said it had bought a 50% stake in Blue Star Constructions (Pvt) Ltd. for 800 million rupees.

Blue Star owns over one acre of property at Buthgamuwa Road, Rajagiriya, a fast developing Colombo suburb, it said n a stock exchange filing.

Blue Star plans to do a mixed development condominium project on the property, it said.

“While this investment has synergies with the core business, it will enable Access Engineering to further strengthen its presence in the fast growing and promising property development sector, adding a complimentary segment to its operations,” the statement said.

Sri Lanka Treasuries yields up across maturities

ECONOMYNEXT – Yields on Sri Lankan treasury Bills rose across the board at Wednesday’s auction with the 03 month bill yield up 09 basis points to 8.80%, the debt office said.

The yield on 06 month treasury Bills went up 08 basis points to 9.75% while the yield on 01-year bills were up 04 basis points to 10.52% from the last time they were sold at the auction on May 18, 2016.

The debt office, a unit of the central bank, said it got bids worth 86 billion rupees and accepted bids of 24.5 billion rupees.

Sri Lanka's Tokyo Cement net up 24-pct in March

ECONOMYNEXT - Profits at Tokyo Cement Plc, which operates grinding plants in Sri Lanka, grew 24 percent to Rs691 million in the March 2016 quarter from a year earlier, helped by revenue and margin growth.

The group reported earnigns of Rs2.03 per share. In the year to March, it reported earnings of Rs5.73 on total profits of Rs1.92 billion, which were up 14 percent.

In the March quarter, revenues grew 8 percent to Rs8.2 billion, cost of sales grew at a slower 4 percent to Rs6.1 billion and gross profits grew 23 percent to Rs2.0 billion.

Tokyo Cement imports clinker to make cement at grinding plants in the country and re-sells imported raw cement.

Global commodity and energy prices have fallen over the past year as the US dollar strengthened with tighter US policy, but the rupee has also depreciated following money printing and a rate cut by the Central Bank, reducing some of the benefits of external inflationary conditions.

Sri Lankan shares fall for 3rd straight day on rising interest rates

Reuters: Sri Lankan shares edged down on Wednesday for a third straight session as rising interest rates weighed on risky assets, while lack of new catalysts and concerns over foreign outflows also dented sentiment.

Treasury bill yields rose between 4 and 35 basis points to near three-year highs in two weekly auctions through Wednesday despite the central bank leaving key policy rates steady for a third straight month on May 20.

Foreign investors were net sellers of 35.4 million rupees ($239,189.19) worth of shares on Wednesday, extending their year-to-date net equities selling to 5.62 billion rupees.

The benchmark Colombo stock index ended 0.12 percent, or 7.76 points, weaker at 6,542.75, its lowest close since April 29. The index declined 0.94 percent during last week.

"The market is moving sideways. All are waiting for something to happen to boost sentiment. Still there is no positive sentiment for investors to come in," said a stock broker asking not to be named.

Another broker said a rise in interest rates could be detrimental to risky assets if they jumped beyond 12 percent. The average prime lending rate (AWPR) edged up 15 basis points to 10.15 percent in the week ended May 27.

Analysts said market sentiment remained weak as investors were waiting for catalysts such as a big foreign direct investment or initial public offering or inflows from the International Monetary Fund (IMF).

Turnover stood at 618.1 million rupees, well below this year's daily average of around 793.1 million rupees.

Shares in Dialog Axiata Plc fell 2.68 percent while those in Lanka ORIX Leasing Company Plc dropped 2.93 percent, dragging the index down.

Top conglomerate John Keells Holdings' shares ended 0.06 percent weaker and accounted for 41 percent of the day's turnover.

($1 = 148.0000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anupama Dwivedi)

Sunshine Holdings reports strong results in FY16, improves bottom line of all segments

Diversified conglomerate lays groundwork for expansion by attracting FDI and via new investments in international FMCG operations and healthcare retail outlets

Diversified conglomerate Sunshine Holdings PLC has posted a strong performance for the year ending 31 March 2016 (FY16), improving the Profit After Tax (PAT) of all its business segments, while laying the foundation for further expansion with a number of new investments and initiatives.

According to results issued to the Colombo Stock Exchange (CSE), for FY16, Sunshine Holding’ PAT grew to Rs. 1,218 million, a significant 16.3% improvement year-on-year (YoY).

Net Asset Value per Share increased to Rs. 42.78 as at end FY16, compared to Rs. 39.24 at the beginning of the year (FY15). Earnings per Share (EPS) too improved to Rs. 4.34 in FY16 from Rs. 3.62 in FY15.

Despite challenges, particularly in the Agribusiness sector, Consolidated Revenue was up by 6.7% YoY to Rs. 17,422 million. Three of the five divisions – Healthcare, Fast-Moving Consumer Goods (FMCG) and Packaging – reported double digit growth in revenue while the Renewable Energy division too improved its revenue. The Agribusiness sector enhanced its PAT despite a reduction in the top-line – as part of a strategic move to reduce volumes and further enhance focus on quality in the Tea sub segment.

Healthcare, represented by Sunshine Holdings’ fully-owned subsidiary and one of the country’s largest distributors in the healthcare space – Sunshine Healthcare Lanka Ltd. (SHL) – was the main contributor to Group revenue in FY16 (accounting for 41.1% of the total). It expanded well above the growth of the overall market. Revenue was up by 17.9% YoY to Rs. 7,161 million in FY16 while PAT was Rs. 327 million, an improvement of 41.2% YoY.

The FMCG sector, represented by Watawala Tea Ceylon Ltd. (WTC), the country’s largest branded tea company, reported a revenue of Rs. 3,440 million for FY16, a growth of 18.0% YoY. This was on the back of both price and volume growth, the latter largely driven by Watawala Tea – the country’s single largest tea brand. PAT from FMCG grew 7.7% YoY, to Rs. 423 million in FY16.

Agribusiness, represented by Watawala Plantations PLC – the country’s largest manufacturer of palm oil and one of the largest Regional Plantation Companies (RCPs) – saw its PAT expand to Rs. 518 million, up by 32.5% YoY. The increase in profitability of the sector, despite severe challenges, was a result of a prudent strategic move by Watawala Plantations to cut down on its output of tea (which translated into reduction in Revenue), and to curtail losses by further improving quality.

Packaging and Renewable Energy Divisions – represented by Sunshine Packaging Ltd. and Sunshine Energy Ltd. respectively – too achieved substantial improvements in both the top line and the bottom line. Sunshine Packaging’s Revenue was Rs. 362 million in FY16, an improvement of 34.1% YoY while its PAT was up by Rs. 40 million – to Rs. 16 million. Sunshine Energy expanded its revenue to Rs. 120 million in FY16, a 6.9% growth YoY while its PAT too increased by Rs. 12 million to Rs. 32 million.

“Sunshine Holdings takes much pride in this strong financial performance, particularly since it represents bottom line growth across all our business segments, despite significant challenges in some sectors,” Sunshine Holdings Group Managing Director (GMD) Vish Govindasamy said. “More importantly, these results have been achieved while laying the foundation for sustainable future growth – through investments aimed at enhancing the competencies of our staff, distribution networks and infrastructure.”

In FY16 the FMCG segment invested Rs. 88 million for international expansion alone and the international marketing team will be leveraged to expand the lucrative export business.

In Healthcare, a number of new agencies are expected to be added during FY17 to further strengthen the product portfolio. The rapid expansion of the outlet network of Healthguard, the country’s premier urban pharma, wellness and beauty retail chain, fully owned by Sunshine Holdings’ healthcare arm will continue, with six new outlets expected to be opened in FY17. Therefore together with the eight Healthguard outlets opened in FY16, the network will stand at 30 outlets by end FY17. The Healthguard online store, opened during FY16 is also expected to support future top and bottom line growth.

As part of its efforts to become the first healthcare retailer in Sri Lanka to provide a service of an international standard, Healthguard also opened a dedicated training centre in early FY17, further stepping up its HR initiatives to enhance the competencies of employees.

Members of the Sunshine Holdings Group have also succeeded in attracting substantial Foreign Direct Investment (FDI) recently to further enhance and expand operations. The Group set up a commercial dairy operation in March 2016 – Watawala Dairy Ltd. – together with Duxton Asset Management, with a $ 3 million FDI infusion from the latter. In May 2016, the packaging arm of the group – Sunshine Packaging Lanka Ltd. also attracted FDI of $ 2 million from Primeco Holdings Ltd. – a conglomerate incorporated in Hong Kong.
www.ft.lk

Softlogic Holdings records impressive profit growth in FY16

Softlogic Holdings Plc has posted impressive growth in profits as well as turnover in the financial year ended on 31 March 2016.

Profit before taxation for the year recorded an exceptional growth of 41.8% to Rs. 3.2 billion whilst the recurrent PBT for the quarter, excluding fair value adjustments, was Rs. 770.9 million as opposed to Rs. 311.2 million reported during the comparative quarter.

Profit after tax for the year was Rs. 2.2 billion, up 23.5% whilst recurrent PAT for the quarter, excluding fair value adjustments, was Rs. 502.3 million (up 165.5%). Prime contributors to the growth were the Group’s almost fully owned subsidiaries, Retail sector - which is involved in electronics and consumer durables and fashion retailing with its first-in-class local and foreign franchises - contributed 33.1%, and ICT – which is involved in Samsung, Microsoft/Nokia and Dell-- contributed 28.6%.

Healthcare Services added in 17.7% to Group topline whilst Financial Services contributed 16.7%.

“The businesses we are in show tremendous potential for continued growth. Our operations could get affected in the short term with challenging economic conditions currently witnessed in the country but as a conglomerate we are engaged in the right products and services unrivalled by other industry players and we are hence confident -- with an economy that shows resilience and strong potential for significant growth -- our businesses will also, assuredly, grow in tandem with or much faster than the economy,” Softlogic Holdings Plc Chairman Ashok Pathirage said.

“We recognise the scope of the retail market and our forward thrust will be concentrated in this particular area going forward. The other sectors are continuing to grow and all our investments in them will ensure a chain of value creation hitherto not seen,” he added.

Softlogic’s consolidated turnover continued to progress according to plan with strong growth of 41.7% to Rs. 56.1 billion during FY2015/ 16 whilst the quarter recorded a 18.3% increase in turnover to Rs. 13.9 billion. Group Gross Profit registered a strong growth of 32.1% to Rs. 18.7 billion for the year with the quarter witnessing an improvement of 23.0% to Rs. 5.0 billion.

Operating Profit increased 51.1% to Rs. 6.4 billion for the year with the quarterly operating profit registering a 65.6% growth to Rs. 1.6 billion. Key contributors to Group Operating Profit for the year were Healthcare Services, Financial Services, Retail and ICT.

EBITDA advanced 44.8% for the year to Rs. 8.2 billion from Rs. 5.7 billion reported last year. Quarterly EBITDA was Rs. 2.1 billion, up 50.5%.

Softlogic Holdings PLC is one Sri Lanka’s fastest growing conglomerates engaged in Healthcare Services, Retail, Financial Services, ICT, Automotive and Leisure & Restaurants employing over 9,000 people in 47 companies across the Group. 

www.ft.lk

People’s Leasing and Finance plans to venture overseas

People’s Leasing and Finance (PLC), a fully owned subsidiary of the Peoples’ Bank announced its ambitious plan to foray into Southeast Asian region.

PLC’s Deputy Chairman Pradeep Amirthanayagam announced this plan participating at the bell ringing ceremony to commence trading at the Colombo Stock Exchange (CSE) yesterday.

The market opening ceremony was organized as part of the company’s celebrations to mark two decades in the financial services industry.

“As a leading non-bank financial institution in Sri Lanka with an asset base of over Rs.120 billion and a net profit of Rs.4 billion, we are proud to say that we have created value for both the market and the country and it is with utmost pride that we celebrate 20 years of existence today.

“Our parent company Peoples Bank, the most progressive financial institution in the country has propelled and given us the impetus to grow the way we were able to grow.” Amirthanayagam said.

People’s Leasing and Finance CEO D.P Kumarage the company’s financial performance exceeded expectations and is expecting a credit growth of 10 to 15% in the coming year. The company was able to continue its growth momentum despite continued pressure on interest margins, and other industry related rules and regulations.

“People’s Leasing and Finance is also hoping to go into a merger with People’s Merchant finance PLC, however, no final decision has been taken yet in this regard,” Kumarage added.

The company has the honour of being the highest rated non-bank financial institution in the country with two international ratings.

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Access Engineering concludes 2015-16 on solid ground

Access Engineering PLC wrapped up the FY 2015/2016, with a solid performance.

At a Group level cumulative revenue for the year 2015-16 was recorded at Rs. 17.6 billion, a growth of approximately 7% over the previous year. At a company level this was recorded at Rs. 11.6 Bn, a marginal growth of 3.2% over the corresponding cumulative period. A salient feature during the period is the 38% growth recorded by the production of construction related material contributing Rs. 1.5 Bn to company’s top line after the elimination of inter-segment revenue.

During the quarter ended March 31, 2016 revenue was recorded at Rs. 4.5 Bn & Rs. 3 Bn respectively at Group & Company level. The average gross profit margins at the Group & Company level for both the cumulative period & the quarter were well above 20%.

Total Comprehensive Income After Tax for the Group & the Company for the FY 2015-16 recorded at Rs. 2.5 Bn & Rs. 2.1 Bn is a growth of 6.5% & 19.7% respectively.

During the FY 2015-16, the company’s 100% owned subsidiary Access Realties (Private) Limited generated a profit before interest and tax of Rs 152.2 million while it’s 84% owned subsidiary Sathosa Motors PLC generated a PBIT of Rs 471.6 million. The 80% owned Access Projects (Private) Limited generated a PBIT of Rs 250.1 million and the contribution from the Company’s Associates amounted to be approximately Rs 10.1 million.

As at for 31st March 2016, the total asset base of the company amounted to Rs 30.3 Bn and Rs 25.2 Bn at Group and Company level respectively. The equity attributed to the owners of the company was recorded at Rs 17.4 Bn at the Group level while it was Rs 15.9 Bn at Company level. This had been translated in to a Net asset per share of Rs 17.46 at Group level and Rs 15.94 at Company level.

The Company declared a final dividend of Rs. 0.50 per share on 25th May 2016 which is payable on 14th June 2016. This is in addition to the interim dividend declared and paid in December 2015 amounting to another Rs. 0.50 per share.

The Board of Directors of Access Engineering PLC comprises of Sumal Perera, Chairman, Christopher Joshua, Managing Director, Rohana Fernando (COO), Shevantha Mendis, Dharshana Munasinghe, Dilhan Perera, Ranjan Gomez, Professor, Malik Ranasinghe, Niroshan Gunaratne and Dinesh Weerakkody.

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