Sri Lanka's Sunshine Holdings to raise Rs775mn from SBI

ECONOMYNEXT - Sri Lankas' Sunshine Holdings Plc said it was planning to raise 775 million rupees from SBI Ven Holdings Pte Limited through a private placement.

The board of Sunshine Holdings had decided to place 11.923 million shares at 65 rupees with SBI Ven Holdings after seeking approval from shareholders, the firm said in a stock exchange filing.

The funds will be used to reduce debt which will reduce interest costs, the firm said.

The firm will call an extraordinary general meeting of shareholders to seek approval for the placement.

SBI Ven Holdings has an 10.99 percent stake in the firm which it bought at 50 rupees a share in March 2017.

Sri Lankan shares slip from 1-week high in thin trade

Reuters: Sri Lankan shares ended slightly weaker on Thursday, slipping from a one-week high hit in the previous session, as investors sold diversified shares such as John Keells Holdings Plc.

Trading was thin as investors awaited for more clarity on the political and economical front.

The Colombo stock index ended 0.16 percent weaker at 6,473.18, slipping from its highest close since May 9 hit on Wednesday.

“The market today came down on John Keells. The market is hovering around these levels as investors are still on the sidelines,” said Dimantha Mathew, head of research, First Capital Holdings.

“There are queries from investors, but nobody is taking the initiation to invest as yet.”

Turnover stood at 484.6 million rupees ($3.07 million), less than half of this year’s daily average of 1 billion rupees.

Foreign investors net sold equities worth 77.8 million rupees, extending the year-to-date net foreign outflow to 747.3 million rupees worth of shares.

Meanwhile, the recent fuel price hike also weighed on investor sentiment, stockbrokers said.

State-run Ceylon Petroleum Corp (CPC) raised retail prices for gasoline and diesel on Thursday midnight in response to the hike in global oil prices. Lanka IOC, a subsidiary of Indian Oil Corp, also increased fuel prices the same day.

Shares of John Keells Holding Plc ended 0.8 percent weaker, while the biggest listed lender Commercial Bank of Ceylon Plc closed 0.6 percent lower.

Shares of Lanka IOC ended 0.6 percent weaker.

The depreciation in rupee also weighed on the market, analysts said, as it is likely to hit profits of some listed firms that rely heavily on imports.

The rupee hit a fresh low of 158.50 per dollar on Wednesday on importer demand for the U.S. currency.

Analysts said concerns over political instability following President Maithripala Sirisena’s decision to suspend the parliament last month after 16 legislators from his ruling coalition defected, dented market sentiment.

Last week, Sirisena urged his own coalition government and the opposition to end a power struggle in order to achieve ambitious goals including anti-corruption measures.

($1 = 158.0000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez, Editing by Sherry Jacob-Phillips)

Colombo Dockyard ends 1Q in red as income from shipbuilding slows

Sri Lanka’s largest shipbuilder, Colombo Dockyard PLC (DOCK), which operates in collaboration with Japan’s Onomichi Dockyard, which owns 51 percent of the company, reported a net loss of Rs.120.3 million for the March quarter (1Q18), as the income from both shipbuilding and repairing slowed.

The company was able to narrow its losses significantly during the December quarter (4Q17) to just Rs.192,000.

The loss of 1Q18 was against a net profit of Rs.144.6 million reported for the corresponding quarter of the previous year. The loss per share for the period was Rs.1.67, against earnings per share of Rs.1.97.

Revenue for the quarter fell 36 percent year-on-year (YoY) to Rs.2.6 billion, while the cost of sales also fell 35 percent YoY to Rs.2.3 billion.

The gross profit for the period stood at Rs.332.7 million, down 44 percent YoY.

The fall in the global oil price hit DOCK hard as building of offshore support vessels for oil platforms was the company’s specialty. DOCK had to cancel or renegotiate most of the orders placed for such vessels by customers with the fall in oil prices.

DOCK Chairman Toru Takehara in last year’s annual report said he didn’t expect a recovery in the shipbuilding market over the short and medium term. He said DOCK would focus on building niche, high-tech ships as a coping strategy, until the demand for its popular offshore support vessels return to normalcy.

He also noted that despite the recent uptick in oil prices, which is largely due to production cuts from OPEC countries, another year or two would pass before the demand picks up again globally for offshore support vessels.

In line with its immediate focus elaborated by Takahera, DOCK this week said it secured a contract with Toyota Tsusho Corporation (TTC) of Japan to build two vessels: pilot station vessel and buoy tender vessel, for General Company for Port of Iraq (GCPI).

The company is also aiming to bag contracts for cable laying vessels for telecommunication and power transmission, wind farm support vessels, liquefied natural gas storage, bunkering and re-gasification vessels and pilot station vessels.

Meanwhile, a segmental review of DOCK’s business units showed the shipbuilding operations recording revenue of Rs.891.5 million for the quarter, against revenue of Rs.2.2 billion in the same quarter a year ago. The gross profit also plunged to Rs.8.7 million, from Rs.97.7 million.

DOCK’s ship repairing business recorded revenue of Rs.1.4 billion, down from Rs.1.63 billion a year ago. The segment’s gross profit fell to Rs.215 million, from Rs.420.3 million.

The heavy engineering was the only business segment that reported positive growth during the quarter under review, with revenue of Rs.232 million, against revenue of Rs.65.1 million a year ago. The gross profit rose to Rs.61.2 million, from Rs.9 million an year ago.

As at March 31, 2018, the state collectively owned about 35 percent of the issued shares of DOCK through various state-owned institutions.

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AIA declares a strong 9.63% dividend for its customers!

AIA Sri Lanka has declared another year of consistent policyholder dividend rate, with the declared dividend of 9.63%. This is yet another year of AIA delivering impressive dividend figures to their customers, much higher than the minimum guaranteed dividend rate. This consistency is testament to the strength and outstanding investment strategy of AIA’s life fund, which now stands at LKR 40 Billion (Market value and rounded up as at 31 December 2017, and prior to any surplus transfers out).

AIA’s annual dividend amount declared every year has always been well above the minimum guaranteed rates declared for the respective year. In 2013 the dividend was 9.62% and it rose to 9.88% in 2014. Having declared a dividend of 9.55% in 2015, it stayed within range at 9.46% in 2016.

AIA’s Chief Financial Officer Gavin D' Rosairo said “AIA’s prudent investment strategy is designed to ensure safety and stability of our policyholder’s investments, whilst optimising returns over the long-term horizon. We maintain most of our investments in government bonds and high credit quality debentures and such instruments, to create a diversified and quality asset mix that is consistent with our investment philosophy and governance requirements.”

CEO Pankaj Banerjee added, “We are pleased to announce yet another year of consistent policyholder dividend rate declaration. Our continued endeavour has been to manage our assets prudently with the objective of helping our customers in building their long-term savings in a sustained manner. The consistent performance of our underlying fund is also a testimony to our research- backed and long-term objectives driven fund management philosophy. We are very pleased to be able to deliver such consistent performance to meet the long-term financial security need of our customers, also a clear indication of why more and more Sri Lankans are switching to AIA as their preferred life insurance partner.”

Call 0112 310310 to find out more about AIA’s pensions and protection products.

* Dailymirror.lk neither liable nor responsible for any information / contents published in this article

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SLT 1Q performance reflects shifting subscriber habits

The rapid shift towards data from voice services and intense competition inflicted pain on Sri Lanka Telecom PLC (SLT) as the March quarter profits and revenues showed some challenging operating conditions faced by the state-controlled telecommunication behemoth.

The interim financial accounts released for the January-March (1Q18) period showed SLT reporting Rs.1.18 billion in net profits, down 19 percent year-on-year (YoY).

The operating profit was also down to Rs.1.58 billion, from Rs.1.62 billion a year earlier. The top line rose under 6.0 percent YoY to Rs.19.8 billion.

The subscribers are increasingly moving to mobile data and fixed broadband, in the case of heavy use,—the services, which mostly fetch lesser margins for telecom operators than voice services.
SLT, which has the county’s largest fixed telephone subscriber base, has seen its income shrinking as people tend to use more of low-margin data and less of high-margin voice services.

Since of late, SLT was seen running an aggressive promotional campaign to encourage people to use more of their fixed line voice facilities for international direct dialling calls.

SLT’s fixed ICT operations business increased its revenue to Rs.10.5 billion during the quarter under review, from Rs.10.3 billion in the same period in 2017.

But the profits fell to Rs.501 million, from Rs.627 million earned a year ago, demonstrating how the low-margin data is replacing the high-margin voice service.

As a strategy to fend off this margin pressure, SLT bundles its home broadband and pay TV service with the voice connection, as the company is aware of the shift in subscriber tastes.

Although SLT’s pay TV service carries some attractive features, such as rewind and watch past TV programmes, the subscriber base is still lagging, compared to its main competitor.

Meanwhile, the group’s mobile telecommunication subsidiary – Mobitel Private Limited – added Rs.8.9 billion in revenues to the group, up from Rs.8.1 billion during the same quarter last year.

But the profit before tax fell to Rs.1.06 billion from Rs.1.12 billion.

Telcos require heavy and continuous investments to upgrade their technologies to stay relevant.

By March 31, 2018, the government directly via the National Treasury held a 49.50 percent stake while Global Telecommunications Holdings NV held a 44.98 percent stake. The state-controlled Employees’ Provident Fund had a 1.40 percent stake being the third largest shareholder.

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