Sri Lanka’s Royal Ceramics March net up 11-pct to Rs890mn

ECONOMYNEXT – Group net profit of Sri Lanka’s dominant tile maker Royal Ceramics Lanka (RCL) rose 11.3% to Rs890 million in the March 2017 quarter from a year ago driven by growth tiles and sanitaryware and strong growth in aluminium business.

Quarterly earnings per share rose to Rs8.03 from Rs7.21 the year before with sales at Rs7.8 billion, according to interim accounts filed with the stock exchange.

Annual EPS were Rs29.16 with net profit up 10% to Rs3.2 billion and sales up 8% to Rs29.3 billion.

Bartleet Religare Stockbrokers said in a research note that RCL’s March quarter EPS of LKR 8.03 was 8.9% lower that its forecast owing to lower than expected contribution from tiles and associated items

It noted that RCL’s bottom line growth was aided by saving on cost of goods sold, distributions expenses and income tax which fell 40.3% from a year ago.

The group’s aluminium business continued to be “a sturdy top and bottom-line contributor”, although aluminium prices are on the rise since late last year, Bartleet Religare Stockbrokers said.

RCL’s subsidiaries Lanka Tile and Lanka Walltile have been successful in curtailing cost for the last two years, partly due to the reduction in gas prices.

Sri Lanka’s Trans Asia Hotels March net up 45-pct

ECONOMYNEXT – Sri Lanka’s Trans Asia Hotels said March 2017 quarter net profit rose 45% to Rs447 million from a year ago with annual earnings also up sharply in the first full year of operations after being partly closed for refurbishment. .

Sales of the firm, which owns Cinnamon Lakeside Hotel, a five star hotel in Colombo, rose 3% to Rs853 million, according to interim accounts filed with the stock exchange.

Quarterly earnings per share of Trans Asia, owned by Asian Hotels and Properties, which is part of John Keells Holdings, rose to Rs2.24 from Rs1.54 a year ago.

EPS for the financial year ended 31 March 2017 were Rs4.54 with net profit at Rs907 million, up 183% from the year before when Cinnamon Lakeside Hotel had been partially closed for refurbishment for six months.

Sri Lankan shares fall to two-week closing low; floods weigh

Reuters: Sri Lankan shares fell on Monday in dull trade to close at their lowest in two weeks, as investors booked profits in heavyweights such as John Keells Holdings Plc and Commercial Bank Plc while floods and landslides that hit the island nation weighed on sentiment.

Sri Lankan authorities on Monday warned of more rains and landslides as a cyclone grew in the Bay of Bengal, while floods killed 164 people following the heaviest rainfall in 14 years.

The Colombo stock index ended 0.27 percent weaker at 6,679.46, at its lowest close since May 15.

The bourse fell 0.47 percent last week recording its first weekly fall in nine weeks.

Turnover on Monday stood at 270.6 million rupees ($1.8 million), well below this year's daily average of 895.9 million rupees.

Foreign investors bought shares worth 57.1 million rupees on a net basis, extending the year-to-date net foreign inflow to 19.46 billion rupees worth of equities.

"Profit-taking that started last week is continuing. The market is coming down on low volumes," said Dimantha Mathew, head of research, First Capital Holdings PLC.

"The floods might impact the earnings of companies, though there are no news of any of the factories of listed companies affected from floods. Investors are waiting to see the real impact of the floods."

Shares in conglomerate John Keells Holdings Plc and Nestle Lanka Plc fell 0.9 percent each, while biggest listed lender Commercial Bank of Ceylon Plc fell 1.2 percent. 

($1 = 152.7000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)

JKH posts record results in 2016/17 raises dividend payout

John Keells Holdings PLC, the premier blue chip quoted on the Colombo bourse and the biggest market capitalized company listed on the CSE has posted record results for the year ended March 31, 2017, and announced a final dividend of two rupees per share bringing up total dividend payments for the year under review to six rupees a share.

"While this is down from the seven-rupee per share dividend paid the previous year under special circumstance of distributing the capital profit earned from the sale of the general insurance business of Union Assurance, we have increased our dividend payment from the usual Rs. 3.50 per share to Rs. 6 a share," a company spokesman said.

"This together with the share split in June last year when every seven existing shares were subdivided into eight shares has substantially increased our dividend pay out."

In the 2016/17 results published on Friday, JKH said its group profit before tax was up 19% to Rs. 22.8 billion and the after tax profit was up 15% Rs. 18.1 billion. Group revenue too had topped Rs. 106 billion.

The year’s results translated to an earning per share of Rs. 11.85, up from Rs. 10.54 the previous year. Net assets per share had grown Rs. 128.75 from Rs. 111.70.

Against a stated capital of Rs. 62.79 billion, JKH had total assets of Rs. 277.27 billion and liabilities of Rs. 82.94 billion as at balance sheet date.

Major business segments including consumer foods and retail, leisure and transportation have grown their profits while the property sector had seen both a revenue and profit decline according to the year’s audited figures.

The country’s largest listed conglomerate quoted on the Colombo Stock Exchange, the group is into managing hotels and resorts in Sri Lanka and the Maldives, providing port, marine fuel and logistics services, IT, manufacturing food and beverages and running a chain of supermarkets.

Its business portfolio includes tea and rubber broking, stock broking, life insurance and banking and real estate with the company claiming on its website that "we have made our presence felt in virtually every major sphere of the economy."

"Since our modest beginnings as a produce and exchange broker in the early 1870s, we have been known to constantly re-invent, re-align and reposition ourselves in exploring new avenues of growth."

Mr. Sohli Captain with 10.8% of JKH, up from 9.9% a year earlier is the biggest individual shareholder. Captain-controlled Paints and General Industries is the third larges shareholder with 6.9%, down from 8.1% a year earlier. Melstacorp with 3.7% is number five in the Top Twenty list while the ETF with 1.7%, up from 1.5% a year earlier stands at No. 11.

JKH is the preferred stock of foreign investors and the majority of its large shareholders are foreign funds. The company’s executive directors too are substantial share holders though not on the Top 20 list.

www.island.lk

BPPL Holdings’ net profit up 42% to Rs. 436m

Next year’s financials to show impact of company’s green energy use
BPPL Holdings announced recently its unaudited financial results for the twelve months from April 2016 to March 2017.

BPPL's consolidated revenue for the period was Rs 2.4 billion, up 16% over the corresponding period in the previous year. The North American region accounted for 77% of the reported revenue. The region saw a 21% increase in revenue over the previous financial year. High growth was also seen in New Zealand, Indonesia and Sri Lanka although from smaller bases.

In the United States, robust revenue growth was seen in the food services, janitorial and oil and gas sectors. Revenue slowed in Australia and Britain due to client inventory adjustments and new product launches in the previous financial year causing increased orders in that year. Sales to Britain were also affected by Sterling depreciation vs. the Sri Lankan Rupee during the period.

Overall revenues were also strong as the company pursued its dual objectives of penetrating the household market segment both through direct sales to retailers and own branded goods sales in Sri Lanka and Indonesia. Direct sales accounted for 10% of total sales for the period, up 20% year-on-year. Own branded goods also grew by 59%, again over the corresponding period in the previous year.

Gross profit was up by a faster 26% year-on-year to Rs963 million due to margin expansion amid revenue growth. Gross profit margins, which improved from 37% to 40% during the twelve month period ended March 2017, continued to benefit from higher productivity, lower freight rates, lower costs as a result of improved raw material sourcing and Sri Lankan Rupee depreciation against the US Dollar.

Improved productivity and stringent cost controls also led to a 41% increase in operating profit (EBIT) to Rs512 million compared to the same period in the previous year. Moreover, margins continued to expand to 20% at a Profit-Before-Tax level due to lower interest expenses as accumulated profits were used for debt retirement. Profit-Before-Tax was Rs491 million for the period whilst Profit-After-Tax attributable to the company’s shareholders was Rs436 million, an increase of 42% year-on-year. Non-annualized EPS for the period amounted to Rs1.42.

Meanwhile, BPPL Holdings moved ahead with its plans for extruding synthetic yarn by placing orders with machinery suppliers following successful trials conducted with its own hot washed recycled PET flakes and discussions with leading textile producers. The construction of a new factory in the Horana BOI Industrial Zone also commenced in January 2017. This yarn production facility, which involves an investment of Rs675 million, is set to come on-stream in the January to March quarter of 2018 and contribute to revenue from April 2018.

The company also commenced power generation from its own 347KW solar and 200KW biomass based power plants at the end of March’17. A full year’s impact of this would be seen in the new financial year ending March’18.

www.island.lk

Sri Lanka's Lankem unit buys injection moulding firm

ECONOMYNEXT – Sri Lanka's Lankem Ceylon said its fully owned J. F. Packaging (Pvt) Ltd. subsidiary had acquired a firm doing injection moulding, a manufacturing technology used to make a wide range of plastic products.

A stock exchange filing said J.F Packaging had acquired a 100% stake in Alliance Five Pvt Ltd. for Rs150 million.

In April Lankem Ceylon got full control of J. F. Packaging for Rs.320 million by buying the remaining 27.5 percent of the firm.

Sri Lanka’s Aitken Spence March net profit doubles to Rs1.2bn

ECONOMYNEXT – Sri Lanka’s Aitken Spence PLC said March 2017 quarter group net profit doubled to Rs1.2 billion from a year ago.

Sales of the group, with interest from hotels and shipping to plantations and power generation, rose 94% to Rs15.4 billion, according to interim accounts filed with the stock exchange.

Quarterly earnings per share were Rs3.03.

EPS for the financial year ended 31 March 2017 were Rs7.12 with annual profit up 43% to Rs2.9 billion on sales of Rs46 billion.

“The holding company’s revenue growth reflected across all key operational sectors including tourism, maritime and logistics, strategic investments and services,” a statement said.

“The mid to long term strategic investments made by the group in preceding years performed well in spite of challenging market conditions.”

The tourism sector recorded a growth of 32% in revenue to Rs24 billion, while the maritime and logistics, and services sectors reported revenues of Rs9.9 billion and Rs1.7 billion, indicating a growth of 20% and 43% over the year.

The group had identified tourism and maritime and logistics as key growth sectors, and “have made significant strides in the current financial year to expand the group’s footprint in these selected business domains,” Aitken Spence chairman Harry Jayawardena said.

“We have been quick to identify new investment opportunities where we can diversify to remain relevant in the present business context,” he said.

“We seek strategic partnerships with global partners that would provide a competitive edge in the markets we intend to serve.

The group invested Rs5.8 billion in acquiring property, plant and equipment with the investments expected make returns in the medium to long term.