Sri Lanka Treasuries yields flat

ECONOMYNEXT - Sri Lanka's Treasuries yields were flat at Wednesday's auction with the 3-month bill barely rising 02 basis points to 9.01 percent, data from the state debt office showed.

The debt office offered 25.5 billion rupees of bills and sold 28.19 billion rupees of bills, indicating that yields would have fallen it more had not been accepted.

The estimated maturing bill volume was around 26 billion rupees.

About 35 percent of the outstanding 737 billion rupees of bills are now held by the central bank.

The monetary authority rejected real bids and repaid them with printed money to inject rupee reserves in to the banking system, drive credit and imports to unsustainable levels and generate a balance of payments crisis, rupee collapse and high inflation.

Sri Lankan shares hit more than 10-wk closing high; Keells up on foreign buying

Reuters: Sri Lankan shares closed at a more than 10-week high in brisk trade on Wednesday as heavy buying by foreign investors in index heavyweight John Keells Holdings buoyed sentiment across the board.

The benchmark Colombo stock index ended 0.52 percent higher, or up 33.64 points at 6,543.75, its highest close since May 31.

"Foreign interest in John Keells boosted sentiment," said Prashan Fernando, COO at Acuity Stockbrokers.

John Keells Holdings jumped as much as 3.15 percent intraday as foreign investors net bought around 720,000 shares, before closing 2.1 percent higher.

Shares have risen on hopes economic fundamentals would improve after the central bank on July 28 raised its main interest rates by 50 basis points each in a surprise move aimed at curbing stubbornly high credit growth.

Foreign investors net bought 100.4 million rupees ($690,034) worth of shares on Wednesday, extending the net foreign inflow to 1.35 billion rupees worth of equities in the last 11 sessions.

Foreign investors have so far net sold 3.46 billion rupees worth of shares this year.

Turnover stood at 751.6 million rupees ($5.16 million), slightly higher than this year's daily average of around 733.1 million rupees.

Among other gainers, Ceylon Tobacco Company Plc rose 1.62 percent.

Analysts said investors also shrugged off a Supreme Court order asking parliament to stop considering a bill to raise the value-added tax as the draft had not followed due process.

The move could put in jeopardy the government's ambitious fiscal consolidation plan to reduce the budget deficit to 5.4 percent of gross domestic product from last year's 7.4 percent. 

($1 = 145.6000 Sri Lankan rupees) 

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

Sri Lanka's Continental Insurance seeks public listing

ECONOMYNEXT - Sri Lanka's Continental Insurance, has sought a public listing, its holding company Distilleries Corporation of Sri Lanka said.

Under Sri Lanka's regulations, all insurers have to be listed after their life and general businesses are split.

The firm had applied for a listing after the end of the balacne sheet date (June30), the firm said in an interim accounts filing.

Distilleries in accounts filed with the Colombo Stock Exchange said revenues in its financial services business rose to Rs656 million in the June 2016 quarter from a year earlier.

Profits were barely changed at Rs73.7 million, from Rs73.4 million a year earlier. 

Sri Lanka's Distilleries group net up 9.5-pct, core firm show gains

ECONOMYNEXT - Distilleries Company of Sri Lanka, which has interests in beverages, insurance and agriculture, said profits rose 9.5 percent from a year earlier to Rs1.92 billion, with the core beverage firm sales going up.

The group reported earnings of Rs6.41 for the quarter.

At the core alcohol company net revenue rose 31.8 percent to Rs6.1 billion, the cost of sales rose 35 percent to Rs3.3 billion and the firm grew gross profits 27 percent to Rs2.86 billion.

Industry analysts say sales of the 'quarter bottle' (185 millilitres/33.5 percent alcohol) of hard liquor have been growing after the new administration hiked taxes on strong beer.

Construction workers and others who consumed the 500 millilitre strong beer (with 8.8 percent alcohol) had switched back to hard alcohol after the tax hike.

In 2015, there was a crackdown on illegal arrack, made by some distilleries with connections to members of the ousted Rajapaksa regime.

The firm said pre-tax profits in beverages rose to Rs2.7 billion from Rs2.1 billion, financial services was flat at Rs73 million and diversified was down Rs145 million from Rs346 million.

Losses in plantations fell to Rs35 million from Rs102 million, but telecom lost Rs253 million, up from Rs156 million.

Distilleries is planning to make its subsidiary Melstacorp its parent and be listed as a pure alcohol play.

LOLC goes for Singapore Stock Exchange listed $ 150 m bond issue

LOLC yesterday announced plans to issue corporate notes or bonds worth Singapore Dollars 175 m or $ 150 million listed on the Singapore Stock Exchange.

The company said it has identified the issue of corporate notes/bonds under a Multicurrency Medium Term Note Program as a viable source of funding.

LOLC intends to establish the program on the Singapore Stock Exchange and issue foreign currency denominated notes/bonds for SGD 175 million or $ 150 million there under. These notes/bonds will be listed on the Singapore Stock Exchange. The proposed date of the registration of the program on the SSE was 8 August.

Notes/bonds will not be issued on this date and further disclosures will be made prior to the issue.

LOLC said these bonds/notes will not be directly or indirectly offered or sold in Sri Lanka.

LOLC has received approval from the Central Bank and the issue will take place upon receipt of approval from the SEC.

www.ft.lk

Piramal Glass Ceylon (PGC) PLC invests Rs 3 bn on capacity enhancement

Piramal Glass Ceylon (PGC) PLC has announced its results for the 1st Quarter of F2017 with Rs. 1,656 million of Revenue and Rs. 110 million of Profit After Tax.

The total revenue during the first quarter of FY 2017 showed an overall growth of 11%.

The positive momentum achieved in the domestic market during previous year continued this year too with the quarterly growth depicting 9% as against the F16 Q1. The Domestic sale of F17 Q1 was Rs 1,318Million as against Rs. 1,207 million in the previous year similar period.

The Export Market sale was Rs. 338 million as against Rs. 290 million of the previous year reflecting a growth of 16%. The actual growth potential had to be curtailed to facilitate domestic market requirements. During this quarter the company has mainly concentrated on the high value niche exports.

During this quarter the company main concentration was towards building stocks in preparation for the forthcoming closure of the factory in Q2, F17 for capacity enhancement and refurbishment. The strategy towards same was to build in-house manufactured stocks for proprietary bottles and to import generic bottles.

Sanjay Tiwari CEO, Managing Director of Piramal Glass Ceylon said, “We would be back in operation by end of the 2nd Quarter with enhanced capacity and are confident in giving our customers a better choice of bottles in more exciting designs and shapes.”

During this quarter substantial portion of the domestic sale was met through trading. The company’s objective was to ensure that the customer requirement would be catered with the least disruption during the coming period. Thus in most cases the trading margins were not attractive. The major imports were done from its parent company Piramal Glass Limited, India.

The Gross Profit margin for the period under review was at 18% as against 22% in the corresponding quarter previous year. This decrease was contributed by the above explained trading scenario& the several unforeseen interruptions in the production processes due to ageing furnace.

Currently the relining of furnace with an expansion of capacity to 300 MT per day, refurbishment and repair work on downstream facility is in progress. The company is investing Rs 3 billion for the above modernization and expansion.

www.dailynews.lk

DFCC delivers increased profitability in 1H

DFCC recorded favourable growth in the first half of FY2016 ending June 30, 2016, with a consolidated profit after tax of Rs 1,721 million which is 16.1% over the Rs 1,482 million recorded in the comparable period ended June 30, 2015. The total assets of the Group stood at Rs 263,234 million as at June 30, 2016 compared to Rs 247,109 million on December 31, 2015.

During the period under consideration, net interest income increased by 9.4% to Rs 3,831 million from Rs 3,503 million in the comparable period, while net fee and commission income grew by 14.7% to Rs 600 million from Rs 523 million. Other income was derived largely from dividends derived from the investment in Commercial Bank of Ceylon PLC, supplemented by dividend from other equity securities classified as available-for-sale. Hence, Dividend income recorded was Rs 569 million compared to Rs 558 million in the comparable period.

The impairment allowance during the current period was Rs 644 million compared to Rs 531 million in the comparable period. The increase in the impairment charge during the period was as a result of provisions made on account of two large exposures based on available objective evidence. However, recovery processes are being pursued to minimize any actual losses that may arise from such exposures. The ratio of impaired loans to total loans as at June 30, 2016 was 5.5% compared to 5.1% as at December 31, 2015. The cumulative allowance for impairment for loans and advances was maintained at a healthy level of 70% of impaired loans and advances as at June 30, 2016.

Operating expenses were Rs 2,178 million in the current period, a decrease of 7% over Rs 2,344 million in the comparable period. Stringent cost control and efficiency measures continue to remain a priority in the bank’s operations.

www.dailynews.lk

Rocell to cease operations in Ever Paint

The Board of Directors of Royal Ceramics Lanka have decided to cease the operations of Ever Paint and Chemical Industries (Private) Limited with immediate effect and to dispose of the assets thereof.

Ever Paint and Chemical Industries is a fully owned subsidiary of Royal Ceramics Lanka PLC. and the said company was engaged in the business of manufacturing and marketing of paints and allied products.

The immediate impact to the Group on this cessation of business is estimated at Rs.226 million based on the estimated disposable value of the assets of the said subsidiary company.
www.dailynews.lk

Dipped Products 1Q profits down

Dipped Products PLC (DPL) posted Rs. 5.4 billion in group turnover during the 1Q 2016-17, compared to Rs.5.7 billion for the same period of the previous year. Group profit before tax (PBT) for the period was Rs. 12.5 million, from Rs. 176 million recorded for the 1Q last year.

The Hand Protection segment contributed Rs. 3.21 billion to revenue, a 1 percent increase against 1Q in 2015-16.Contribution to PBT from the segment was at Rs. 134 million, 32 percent lower for the same period of the previous year.

The Plantation segment reported Rs. 2.26 billion in revenue, a 13 percent reduction from the previous year and a loss of Rs. 122 million, compared to a loss of Rs. 20 million posted for the 1Q last year.

Dr. M Ranasoma commenting on the Hand Protection sector results said their industrial glove manufacturing facility, D P L Universal Gloves has begun commercial production and in a position to step up serving customer orders.

The low tea crop recorded and the lower rubber prices prevailed during the period impacted negatively to the Plantation sector performance.

Established in 1976, Dipped Products is one of the leading non-medical rubber glove manufacturers in the world, and accounts for a 5 percent share of the global market. The company’s products now reach 68 countries.
www.dailynews.lk

Hayleys Q1 revenues up, PBT above Rs. 1 billion

Hayleys PLC, posted Rs.1.03 billion in Profits Before Tax (PBT) for the first quarter of the 2016/17 financial year. Revenue reached Rs. 24.13 billion, continuing the topline growth momentum from the last financial year.

The Agriculture, Purification Products, Construction Material,Eco Solutions, and Power and Energy Sectors saw appreciable profit growth over the same period in the previous year. All sectorsmade positive contributions to the bottomline except for the Plantation sector, where industrywide challenges continue to dampen sector performance.

During the period, the Leisure Sector acquired a Maldivian luxury resort in the South Ari Atoll close to the popular KudarahThila dive site. The Kudarah Island Resort which has 51 luxury villas is the group’s first leisure sector investment outside Sri Lanka and will be operated under its flagship Amaya Resorts and Spas.

Hayleys Chairman and Chief Executive Mohan Pandithage said the acquisition of the Kudarah Island Resort fulfills a long felt need to operate a resort in the Maldives to compliment the diversity under their Leisure Sector.

www.dailynews.lk

Sunshine Holdings achieves highest-ever revenue, profits for 1Q

Achieving its highest-ever Group Revenue and Earnings Per Share (EPS) for a single quarter, diversified conglomerate Sunshine Holdings PLC has concluded the first quarter of its 2017 Financial Year (1Q 2016/17) on a high note.

For the quarter ended June 30, 2016 Sunshine Holdings boosted Profit After Tax (PAT) by a significant 30% year-on-year (YoY) to Rs. 408 million and increased Group revenue by 11% YoY to Rs. 4.6 billion.

The Group also improved Profit to Equity Holders by an impressive 27% YoY to Rs. 207 million, as well as its earnings per Share (EPS) by 27% YoY to Rs. 1.53.

The five sectors in which the diversified conglomerate operate are; Healthcare (Sunshine Healthcare Lanka Ltd. and Healthguard Ltd.), FMCG (Watawala Tea Ceylon Ltd.), Agribusiness (Watawala Plantations PLC), Packaging (Sunshine Packaging Ltd.) and Renewable Energy (Sunshine Energy Ltd.).

“This strong performance amidst economic and business volatility and challenges – especially in Agribusiness – reflects the solid fundamentals of Sunshine Holdings and its business units,” Group Managing Director (GMD) – Vish Govindasamy said. “The high growth trajectory of Sunshine Holdings is evident in the Group achieving its highest-ever Group revenue and EPS for a single quarter during the concluded financial period. With the expansion efforts and strategic initiatives which are underway, the Group is well poised for further growth acceleration in the medium to long term.”

Healthcare, the largest sector of the Group, which accounted for 42.4% of Group turnover for 1Q 2016/17, increased its revenue by 18% YoY. As a result of having to absorb exchange rate fluctuations (due to price controls on pharmaceuticals) Healthcare PAT however was down 6.1% YoY in 1Q 2016/17.

The FMCG sector revenue grew 14.4% YoY, with continued growth in the domestic market in which its brands – Zesta, Watawala Tea and Ran Kahata – collectively have over 35% market share. PAT however was adversely affected by pickup in tea prices and the cost of rollout of ‘Zesta Connoisseur’ to Shangri-La properties worldwide.
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