Tourism sector drags down Sri Lanka Aitken Spence June net

ECONOMYNEXT - Sri Lanka’s Aitken Spence group said June 2016 quarter net profit fell 69% to Rs249 million from a year ago with its key tourism business hit by higher costs and lower returns.

Sales rose 31% to Rs7.5 billion over the period, according to interim results filed with the stock exchange.

Earnings per share fell to 61 cents from Rs1.04.

The group’s tourism business made a loss while the maritime and logistics business almost tripled profits.

“Investments in hotel sector projects such as Heritance Negombo, Turyaa Chennai and RIU Ahungalla, and the related debt servicing costs alongside diminished returns from hotel operations in the Maldives and the garment sector, negatively affected pre-tax profits,” a statement said.

“Low returns from the Maldives operation as a result of stagnant tourist arrivals and dilution of rates together with investments made towards a number of new projects have adversely affected the returns of the first quarter.”

The tourism sector has shown promise in the first quarter with an increase in the top line from the year before, amid unfavourable conditions in foreign operations, the statement said.

The coming months are expected to continue this trend with the recent unveiling of Heritance Negombo, and the launch of RIU Ahungalla, a 500-room hotel developed in collaboration with global hospitality leader RIU, it said.

”The maritime and logistics sector has performed exceptionally well with a 112% increase in PBT particularly from the port management and maritime education segments when compared with the previous year’s corresponding period.”
(COLOMBO, August 13, 2016)

Sri Lanka inks new deal to formalize US$13bn China sea reclamation

ECONOMYNEXT - Sri Lanka and a Chinese company that is reclaiming sea near the main in the capital has inked a new agreement several months after the suspended project was allowed to proceed by the country's current administration.

CHEC Port City Colombo (Pvt) Ltd, a unit of China Communications and Construction Company, said a tripartite agreement had been signed with Sri Lanka's Ministry of Megapolis and Western Development and the Urban Development Authority.

The earlier temporary agreement was with Sri Lanka Ports Authority.

The project involves reclaiming sea near the Colombo Port in a 1.4 billion dollar project.
The land is expected to draw more than 13 billion dollars in foreign direct investments and create 83,000 jobs, the firm said.

Ceylon Tea Brokers revenue declines

Ceylon Tea Brokers revenue has declined by 23.31%, due to negative sentiments on both the local and foreign tea market during the past financial year ending March 31, 2016.

Ceylon Tea Brokers Chairman Chrisantha Perera said the profit before and after taxation amounted to Rs. 35.7 million and Rs. 25.94 million respectively recording a decline of 51.01% and 52.61%, compared to the previous year.

The company marketed and sold 31.29 million kilos of tea during the year incomparison to 34.73 million kilos in the previous year. However, Low

Grown segment of the company continued to hold the main stay with an overall market share of 13.85%, whilst the High and Medium segments showing positive results with marginal increase in its market share year on year.

The sharp decline in tea prices reflected by the auction averages as well as the lower production figures contributed to the overall disappointing performance of the Company compared to the previous two years.

The company also took a strategic decision in evaluating our lending portfolio to clients with a high risk profile.

This resulted in a certain loss of business, although in our view, it minimised the exposure risk of the Company.

Nestlé Lanka profit tops Rs 2.5 bn in 1H

Nestlé Lanka PLC has recorded a revenue of Rs 19 billion for the first six months of the year, posting a growth of 7.4% and a net profit of Rs 2.5 billion.

The company faced stiff cost challenges including adverse exchange rates, the impact of which was minimised through efficient cost optimisation across the value chain and strategic deployment of resources to key brands.

Nestlé Lanka Managing Director Shivani Hegde said“We have delivered steady results for the first six months of the year despite a very challenging business environment. With the launch of important product innovations and renovations, we aim to delight consumers with products that offer nutrition, health and wellness.