Sri Lanka vehicle registrations fall further in July: JB Securities

(LBO) – Sri Lanka vehicle registrations in July fell in almost every category compared with June, JB Securities said in a research note. Buses and heavy truck registrations however showed an increase over the previous month.

Motor car registrations in the July were 2,489 units, down from 3,026 units the previous month, and significantly lower than high of 14,544 units registered in September, after the government took steps to curb imports.

Brand new segment recorded 1,331 units in the month down from 1,490 units the previous month.

Maruti recorded 663 units (Alto – 474, Celerio – 178 units) slightly up from 633 units the previous month. Micro recorded 169 units, Hyundai Eon 88 units followed by Renault Kwid with 72 units.

Maruti that had a total dominant market in the less than 1,000 cc segment is seeing high competition from the relatively new arrivals backed by major brands – Hyundai Eon and Renault Kwid.

Preowned car registrations recorded 1,158 units in July down from 1,436 units the previous month and significantly down from 3,963 units 12 months ago. Toyota recorded 423 units (Axio – 175, Aqua – 173) – this is the lowest number for the year, Suzuki recorded 431 units (Wagon R – 403) and Honda recorded 210 units (Grace – 78, Fit – 67). Financing share was 65.5 percent in line with its normal average.

Premium brands registrations were 87 in the month up from 64 the previous month and slightly down from 99 units 12 months ago. Mercedes recorded 36 new cars (C-class 7, E-class 28 – a new version was launched in June, S-class 1) and 13 preowned (C-class 9), BMW recorded 15 (5-series 14 units) and Audi recorded 14 units (A6 – 10 units).

Electric cars registrations recorded 64 units in the month down from 71 units the previous month and significantly down from 284 units 12 months ago. Nissan Leaf accounted for 59 units.

SUV registrations recorded 414 units in July down from 631 units the previous month and significantly down from 776 units 12 months ago. Toyota recorded 52 units (Prado 32), Honda recorded 100 units (Vezal 96 – most of these vehicles are NOT 4W), Nissan 82 units (X-trail hybrid 76 units) and DFSK Glory 330 with 62 (this is a locally assembled vehicle).

Hybrid registrations recorded 1,276 units in July down from 1,695 in June and significantly down from 4,077 units 12 months ago. In the motor car segment Toyota accounted for 397 units (Aqua 173, Axio 172, Prius 47), Suzuki accounted for 403 Wagon R units and Honda accounted for 207 units.

Under premium brands Mercedes Hybrids recorded 12 numbers (C350 sport hybrid – 8). Financing share was 66.1 percent. The hybrid SUV segment recorded 205 units – Nissan X-trail 76, Honda Vezel 96 and Mitsubishi Outlander 20.

Van registrations recorded 242 units in the month down from 297 units in June and significantly down from 1,189 units 12 months ago. Toyota recorded 83 units (25 units were new through the agent), Nissan recorded 19 (8 units were new through the agent), Suzuki 28 and Tata Winger 67 (Indian ambulances). June records show 42 Mercedes Benz VITO panel vans – presume they are the yellow DHL vans one sees in the city.

3-wheelers registrations recorded a low 3,678 units in July significantly down from 6,995 units in June and massively down from 12,248 units 12 months ago. In Feb registrations hit a 5 year low of 2,938 units but since then momentum was increasing until last month when it has almost halved from the previous month. Bajaj claimed a share of 87.1 percent followed by TVS with 9.2 percent and Piaggio with 3.6 percent. Financing share was 86.1 percent.

2-wheelers registrations recorded 24,994 units last month down from 29,264 units the previous month and significantly down from the election fueled figure recorded 12 months ago of 33,722 units. Bajaj has reclaimed market leadership recording a market share of 30.7 percent sans a scooter closely followed by Honda with 29 percent, Hero recorded 15.2 percent steadily dropping share closely followed by TVS with 14.1 percent. Financing share was 65.4 percent.

Pickup truck registrations recorded 280 units in July down from 348 units in June and also down from 374 units 12 months ago. Toyota Hilux recorded 70 units similar to last month but is showing stronger performance upping its share to 25 percent, Tata yet remains the market leader claiming a share of 53.2 percent followed by Mahindra with 6.4 percent. Financing share was 67.9 percent.

Mini truck registration recorded 1,148 units in July down from 1,425 units in June and 1,569 units 12 months ago. Tata is the market leader in this category claiming a share of 59.5 percent followed by Mahindra with 33.3 percent. Financing share was 90.9 percent.

Lite truck registrations recorded 533 units in the month down from 648 units the previous month and 696 units 12 months ago. Mahindra is the market leader with 67.9 percent share followed by DFSK with 16.8 percent. Financing share is 86 percent.

Medium truck registrations recorded 160 units in July similar to 161 units in June but down from 219 units 12 months ago. Isuzu is the market leader with a share of 33.1 percent. Finance share was 78.8 percent.

Heavy truck registrations recorded 134 units in July slightly higher than 126 units recorded in June but lower than 173 units recorded 12 months ago. Lanka Ashok Leyland remains the market leader with a share of 47.4 percent followed by Tata with 33.1 percent and Eicher with 9.8 percent. Financing share was 82.1 percent.

Bus registrations recorded 179 units in July slightly higher than 176 units in June but lower than 214 units recorded 12 months ago. Lanka Ashok Leyland continues to be the market leader with a share of 54.8 percent. Financing share was 89.9 percent.

Sri Lanka’s LOLC June net up 26-pct amid growing incomes

(LBO) – Sri Lanka’s LOLC group, which has interests in financial services, insurance, plantations, trading and leisure, said net profit for the June quarter rose 26 percent to 2.3 billion rupees.

The group reported basic earnings of 4.92 rupees per share for the quarter up from 3.89 from a year earlier, on a share price of 88 rupees.

The group reported interest income of 12 billion rupees for the quarter, up 45 percent, and interest expenses rose at a faster 75 percent to 6.7 billion rupees, resulting in net interest income growing at 18 percent to 5.1 billion rupees.

Interest income represents the income receivable for the period on all contracts, rentals on operating leases, income on factoring of client debtors, earned premium on insurance contracts and IT service fees.

Revenues rose 24 percent to 5.1 billion rupees and cost of sales rose at a faster 44 percent to 3.1 billion rupees making gross profits to rise at 1 percent to 1.9 billion rupees.

Revenue includes revenue from trading, manufacturing, plantation and other activities of the group.

Net impairment charges rose 20 percent to 675 million rupees while personnel costs rose 17 percent to 2.9 billion rupees.

Direct expenses excluding finance costs rose 70 percent to 1.1 billion rupees while other operating expenses fell 3 percent to 1.9 billion rupees.

In the segmental analysis, financial services sector profits for the quarter rose to 2.8 billion rupees, up from 2.3 billion rupees in the previous year.

Manufacturing and trading sector reported a loss of 130 million rupees while leisure and entertainment segment posted a loss of 263 million rupees.

The public shareholding at the end of June was 15.49 percent comprising of 3,050 shareholders.

LSE Group to open technology hub in Sri Lankan capital

ECONOMYNEXT – London Stock Exchange Group’s Business Services division (LSEG BSL) in Sri Lanka will soon open its new headquarters in the Sri Lankan capital Colombo occupying 26,000 square feet, a statement said.

“The new Business Services division in Sri Lanka will provide support to the Group’s operating entities across the globe,” it said.

“The venture will provide the best and brightest technology talent in the country with the opportunity to be a part of an ever-expanding, innovative knowledge hub.”

The new headquarters will be in the historic Expert City precinct, formerly known as Tripoli Market.

The proposed new 26,000 sq ft premises would complement LSEG BSL’s current incubation hub, which is also housed at Expert City.

The new LSEG facility will directly employ 400 personnel in high-technology jobs, with an additional 1,200 employed indirectly, the company said.

“These employees will be tasked with providing technical support services that are central to the Group's global network,” it said.

“LSEG's investment and recruitment drive in Sri Lanka will also provide an immediate boost for the IT sector of the country.”

Murali Subrahmanyan, Head of Business Services Colombo, LSEG said the firm’s plans to establish the facility in Colombo reaffirms its commitment to the technology sector of Sri Lanka.

“Our new facility at Expert City will house some of the best talent in the industry, and it is important to us that all our facilities reflect these high standards. The launch of this new technology centre represents an exciting opportunity for the local population to join a truly global organisation.”

Sri Lanka Telecom net down 38-pct

ECOOMYNEXT - Profits at Sri Lanka Telecom, which has wireline and mobile, fell 38 percent to Rs1.09 billion in the June 2016 quarter with fixed access revenues flat, interim accounts showed.

The group reported earnings of 61 cents per share for the quarter. During the six months to June, the group reported earnings of Rs.56 per share, on total profits of Rs2.9 billion, which was down 13 percent.

At the core, wireline firm revenues in the June quarter rose 4.8 percent to Rs10.506 billion from a year earlier, but were down 2.3 percent from Rs10.8 billion reported in the March quarter.

Revenue was driven by its mobile unit.

Sri Lanka has seen a decline in fixed line voice business, with fixed wireless connections being discontinued. However, wireline access is now driven by data.

Borrowings reduce Sri Lanka’s Laugfs Gas June profits

ECONOMYNEXT – Sri Lanka’s Laugfs Gas PLC said June 2016 net profit fell 92 percent to Rs26 million from a year ago as finances rose sharply owing to borrowings to diversify business in the island and overseas.

Sales rose 45 percent to Rs3.9 billion during the period, according to interim accounts filed with the stock exchange.

June 2016 quarter earnings per share fell to 07 cents from 84 cents a year ago.

The company was hit by the recent floods, virtually paralysing all its operations for nearly two weeks, making heavy impacts of the revenue and profitability of the company, a statement said.

Laugfs Gas Chairman and Chief Executive W. K. H. Wegapitiya said the firm, which started by supplying liquid petroleum gas, has diversified investments rapidly in recent months.

“The company’s profit for the period, took a momentary dip during the period ended due to the cost of borrowings made largely to finance the investments,” he said.

“The company is very confident that the returns are imminent in the medium to long term out of the judicious investment made.”

Laufgs has invested in LPG distribution in Bangladesh, an LPG terminal in Hambantota port, a new gas carrier, a solar power plant and a hotel.

Sri Lanka 06, 12-month Treasuries yields rise

ECONOMYNEXT - Sri Lanka's 03-month Treasuries yields were flat at Tuesday's auction, while 06-month and 12-month bill yields rose slightly, data from the state debt office showed.

The yield on 12-month T-Bills rose 02 basis points to 10.74 percent, while that on 06-month bills rose 02 bps to 9.94 percent.

The three month bill yield was flat at 9.01 percent.

The debt office offered Rs67.5 billion of bills and sold Rs14.5 billion of bills, mostly 06 and 12 month.

Sri Lanka's CT Holdings June quarter net profit up 45-pct

ECONOMYNEXT - Sri Lanka's CT Holdings group (CTH) said net profit rose 45% to Rs 537 million rupees in the June 2016 quarter from a year ago with strong growth in the retail and fast moving consumer goods (FMCG) sectors.

Sales rose 22% to Rs21 billion during the period, according to interim accounts filed with the stock exchange.

Earnings per share for the June 2016 quarter were Rs2.93 against Rs2.02 a year ago.

“Again the retail and FMCG sectors led the way with growth of 123.15% and 29.82% respectively,” CT Holdings said in a statement accompanying the accounts.

“The restaurants sector also recorded a growth of 5 times the previous year, albeit on a smaller base figure. The restaurant sector results also includes the TGI Fridays, which is yet to achieve its optimum operational level.”

CT Holdings said the sales growth momentum has been sustained during the period through volume growth, primarily in the retail sector.

Turnover of the retail sector grew by 23.8% over the corresponding period of the previous year.

“The Retail management takes the view that strong growth prospects are assured for this sector,” the statement said.

The FMCG sector, presently the second largest sector of operation, grew 13.50% despite the Confectionaries subsector lagging behind in its operational performance.

“Further efforts are being concentrated in the Confectionaries sub sector with a view to improving product offering, volume and market coverage.”

All other sectors with the exception of the entertainment business recorded a growth exceeding 10%.

Sri Lankan shares edge down on profit-taking

Reuters: Sri Lankan shares closed slightly lower on Tuesday after posting a more than 11-week closing high in the previous session, as investors booked profits in beverage stocks and foreign investors trimmed their holdings.

Foreign investors offloaded a net 89.85 million rupees ($617,950.48) worth of shares in their first selling in three sessions, extending the net foreign outflow so far this year to 3.35 billion rupees worth of equities.

The fall seems to be a small downturn with some profit-taking after the recent uptrend, said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

"The overall investor sentiment is quite bullish and it is getting better day by day."

Investors expected the country's economic fundamentals to improve after the central bank on July 28 surprised the markets with a 50-basis point hike in its main interest rates aimed at curbing stubbornly high credit growth.

The benchmark Colombo stock index ended 0.07 percent, or 4.65 points, weaker at 6,577.95.

Turnover stood at 851.7 million rupees, more than this year's daily average of around 732.1 million rupees.

Shares of Ceylon Tea Services Plc fell 12.56 percent, while Carson Cumberbatch Plc dropped 1.37 percent.

Analysts said investors also largely shrugged off a Supreme Court order asking the 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 = 145.4000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)