Sri Lankan shares hit over 3-week closing high in lean trade

Reuters: Sri Lankan shares rose for a fifth straight session on Tuesday and marked their highest close in more than three weeks, led by gains in banking and beverage stocks.

However, trading volume was low as investors stayed on the sidelines for want of fresh triggers. The day’s turnover stood at 181.9 million Sri Lankan rupees ($1.12 million), the lowest since August 3 and less than a fifth of this year’s daily average.

The Colombo stock index ended 0.6 percent higher at 6,128, its highest close since Aug.13. It had gained 0.4 percent last week, its second straight weekly gain.

The index, however, was down 1.1 percent in August, having hit its lowest close since March 2017 on last Tuesday. The bourse is down 3.8 percent so far this year.

“Most investors are awaiting proper direction on economy and taxes,” said Dimantha Mathew, head of research at broker First Capital Holdings.

“The main concern is that foreign selling is still continuing and we don’t think this uptrend can continue for long.”

Foreign investors sold a net 31.3 million rupees of shares on Tuesday, extending their net outflow so far this year to 4.2 billion rupees worth of shares.

AIA Insurance Lanka Plc jumped 82 percent, with around 1,700 shares changing hand, due to a share buyback, dealers said.

Ceylon Tobacco Company Plc shares closed 2.5 percent firmer while Dialog Axiata Plc gained 0.8 percent and Hemas Holdings Plc ended 0.5 percent higher.

Sri Lankan companies posted an average 4 percent earnings growth in the June quarter from a year earlier, helped by financials, beverages, telecommunications and power and energy sectors, CT CLSA Securities (PVT) Ltd said in a research note.

($1 = 161.8500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

Melstacorp records Rs 6.25 bn PAT for 2017/18

Melstacorp Plc has recorded profit after tax of Rs. 6.25 billion for the financial year 2017/18. Group turnover reached Rs. 110 billion.

Company’s Chairman and Managing Director D. H. S. Jayawardena said the Group contributed Rs. 69 billion in taxes during the financial year for 2017/18.

“The beverage sector is the highest contributor to both the top line and the bottom line of the Group. Our main subsidiary DCSL PLC’s profitability dropped in the first three quarters managed to recover and record a net profit after tax of Rs. 4.35 billion,” Jayawardena told the shareholders in the company’s annual report for 2017/18.

Periceyl (Private) Limited, the second liquor company of the Group saw its profitability shrinking when compared with last year. The reduction of beer prices and a simultaneous increase in the hard alcoholic beverage prices have resulted in more consumers shifting to beer and other cheaper beverages, according to the annual report.

“The chairman said, the beverage sector of the group was subject to a severe challenge through higher increases in taxation in the last two years. A few years ago the Value Added Tax (VAT) on liquor was removed by adding a corresponding sum to excise duty,” he said.

“In the pursuing year VAT was re-introduced for liquor without a corresponding adjustment in the excise duty. Reintroduction of VAT together with a huge increase in duty on imports of main ingredient, ethanol and higher excise duty on hard alcoholic beverages resulted in a substantial increase in consumer prices.”

“As a result there was a notable decline in volumes. For the year under review the beverage sector revenue reached Rs. 97 billion and the net profit for the year was Rs. 4.7 billion,” he said.

Commenting on plantation sector performance he said that year 2017 was a better year for the tea industry with an increase in production and auction averages reached all-time high levels. However, despite the ascent witnessed in 2017, the Industry continued to be plagued with geo-political tension in the tea importing countries, policy decisions which affected the production of tea and temperature variability due to climatic changes.

The ban of glyphosate (which was recently eased) that is used for weed control, and curtail of tea imports by Russia, the largest importer from Sri Lanka too, caused much uncertainty towards Industry growth.

The negative impact of a drought and floods in the first and second quarters of the year coupled with high cost of fertilizer were drawbacks in reaching the production levels of the preceding years.

The reluctance to undertake the required level of annual replanting by most of the smallholder farmers and the plantation companies due to the non-affordability of the required inputs, and uncertainty in recovering investments is also a major contributory factor for the declining trend in the production volumes.

“In analyzing the global supply scenario, a deficit in production was evident from a few key producer countries mainly of CTC teas and this global shortage in production was a key factor for the prices to sustain at these levels coupled with strengthening of oil prices which favoured some key importing countries of Sri Lankan Teas.”

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Lankem (LCEY) continues to bleed, loses over Rs400mn for the June quarter

LBO – Lankem Ceylon (LCEY) reported another rough quarter, continuing its multiyear losses. For the quarter ended June 2018, the company reported a loss of Rs417mn. The loss is troublesome for a company whose equity is down to Rs1.137bn,

This large quarterly loss comes after losses for the year ended March 31, 2018 of over Rs500mn, and losses for the year ended March 31, 2017 of close to Rs800mn.

Revenue was flat year over year in the just reported quarter.

LCEY went on a debt fuelled acquisition spree several years ago making investments that have yet to realise material value. Analysts say continuation of losses at the company could put the firm in significant financial distress.

The stock is trading at Rs29 per share leaving the company with a market cap of close to Rs1bn. The share is trading at just a fraction of its all time high of Rs590.

Sri Lanka's Melstacorp to enter healthcare, manage hospitals

ECONOMYNEXT - Sri Lanka's listed conglomerate Melstacorp Plc, the parent company of listed liquor producer Distilleries Company, said it was entering the healthcare industry, initially setting up diagnostic infrastructure and managing select hospitals.

"The company will be entering the healthcare industry shortly through subsidiaries incorporated to undertake such activities," the goup said in a stock exchange filing Tuesday.

The group has incorporated Melsta Health Private Limited for the purpose.

"This would involve management of hospitals, operating diagnostic centres and involvement in related healthcare institutions as and when the opportunity arises," it said.

The investment was not disclosed as Melstacorp said the investment did not amount to a major transaction.

Melstacorp was trading at 50 rupees a share Tuesday.

Melstacorp is the parent company of Distilleries Company of Sri Lanka and other businesses ranging from insurance, plantations, financial services and telecommunications.

According to latest financial results, profits fell 30.8 percent from a year earlier to 789.3 million rupees in the June 2018 quarter on rising finance costs from a surge in borrowings and losses in telecommunications and lower profits from financial services, with earnings amounting to 68 cents a share.

Revenue grew 102 percent to 20.8 billion rupees, cost of sales increased 75 percent to 13.3 billion rupees leading to a 178 percent increase in gross profits of 7.5 billion rupees.

Net finance cost surged 941 percent to 413 million rupees as borrowings increased to 26.7 billion rupees at end June 2018, from 3.6 billion rupees a year earlier.

The group's beverages segment which includes listed Distilleries saw revenue decline 10 percent from a year earlier to 20.8 billion rupees in the June 2018 quarter, but profits grew 31 percent to 1.7 billion rupees.

Sri Lanka finances to improve; political uncertainty weighs: Fitch

ECONOMYNEXT – Sri Lanka recent fiscal reforms and automatic pricing of fuel will improve state finances and debt, but political uncertainty has heightened following recent regional polls, Fitch, a rating agency said.

"Sri Lanka’s rating balances an improving policy framework, which supports macroeconomic stability and rising government revenues, against a challenging external debt servicing outlook and high government debt," Fitch Ratings said Monday in its Asia Pacific Sovereign Credit Overview for the third quarter of 2018.

Fitch forecasts Sri Lanka will grow 3.8 percent in 2018 and 4.5 percent in 2019. Government debt at 77.6 percent of GDP is expected to fall to 75.9 percent in 2019.

"Progress has been made on critical fiscal reforms, including approval of an automatic fuel price mechanism effective May 2018.

"The authorities have also taken steps to introduce an automatic electricity pricing mechanism and establish a committee to develop a detailed restructuring plan for Sri Lankan Airlines," Fitch said.

Deteriorating policy coherence and credibility could lead to a loss of investor confidence, or a derailment of the IMF-supported programme that leads to external funding stress, the ratings agency has warned.

"Political uncertainty increased following the ruling coalition's heavy losses during the local elections in February, followed by a vote of no-confidence against the prime minister in April and temporary suspension of parliament in May," Fitch said.

"The risk of political uncertainty disrupting policy continuity, however, is mitigated by the election schedule, in which presidential elections are not due until end-2019, with parliamentary elections to follow."

Fitch Ratings statement on Sri Lanka is as follows:

High Refinancing Risks; Improving Framework: Sri Lanka’s rating balances an improving policy framework, which supports macroeconomic stability and rising government revenues, against a challenging external debt servicing outlook and high government debt. The rating is supported by higher per-capita income levels and stronger governance standards than the ‘B’ category median.

-Key Developments-

IMF Programme Progress; High Debt: The IMF completed its fourth review under a three-year extended fund facility in place since June 2016. Progress has been made on critical fiscal reforms, including approval of an automatic fuel price mechanism effective May 2018. The authorities have also taken steps to introduce an automatic electricity pricing mechanism and establish a committee to develop a detailed restructuring plan for Sri Lankan Airlines.

Nevertheless, Sri Lanka’s government debt remains high at around 77% of GDP, far above the ‘B’ median of 66.6%.

High Near-Term External Refinancing Risks: The sovereign’s projected debt service payments are significant, at USD15 billion in 2019-2022, from a bunching of sovereign bond redemptions, while its foreign-exchange reserves stood at only USD9.3 billion at end-June. The scale of external refinancing over the next few years creates a potential vulnerability for the sovereign particularly as US interest rates are on the rise.

Political uncertainty has increased: Political uncertainty increased following the ruling coalition's heavy losses during the local elections in February, followed by a vote of no-confidence against the prime minister in April and temporary suspension of parliament in May. The risk of political uncertainty disrupting policy continuity, however, is mitigated by the election schedule, in which presidential elections are not due until end-2019, with parliamentary elections to follow.

-Positive Sensitivities-

Further improvement in external finances supported by higher non-debt-creating inflows or a reduction in external sovereign refinancing risks from improved liability management.
Continued improvement in public finances underpinned by a credible medium-term fiscal strategy.

-Negative Sensitivities-

Reversal of fiscal improvements that leads to a failure to stabilise government debt ratios.

Deterioration in policy coherence and credibility, leading to loss of investor confidence, or a derailment of the IMF-supported programme that leads to external funding stress.

HPL Properties buys Tangalle Bay Hotel in Sri Lanka

ECONOMYNEXT - Singapore-based HPL Properties Limited said it had bought 94.7 percent stake in Tangalle Bay Hotels (Pvt) Ltd of Sri Lanka for 385 million rupees.

The purchase was made through West Asia Investment (Pvt) Ltd, which is owned by HPL Properties (West Asia) Pte Ltd, the firm said.

Tangalle Bay Hotel was controlled by Sri Lanka based investor Nimal Perera.

Sri Lanka's East West group, has said HPL Group is also in talks to buy full control of Weligama Bay Hotel.

Sri Lanka car registration up in July, tax not yet hit

ECONOMYNEXT - Sri Lanka's motor car registrations grew 137 percent to 7,193 units in July 2018 despite a hike in taxes, as there was a large stock of smaller vehicles in the country, with total vehicle registrations up 7.47 percent to 42,043, an equities research house said.

Sri Lanka suddenly hiked taxes of a category of small hybrids, which people were buying because other cars were too expensive, due to problems with monetary management of the central bank.

Analysts have called for the reform of Sri Lanka's unstable soft-peg and permanent currency depreciation maintained by inconsistent policy which is disrupting business, peoples' lives and their aspirations.

"The impact of the recent increase in minimum duty rates will only be reflected in registrations towards the end of the year for there are large stocks of unregistered cars in the market and many more on the water that will not be taxed at the higher rates," JB Stockbrokers said in a note to clients.

The government allowed cars already ordered to come at the old tax in a bid not to disrupt the lives of citizens who had already planned and found funding for the vehicles, in an improvement from the casual disregard shown in earlier years.

Instead of fixing the unstable peg, Sri Lanka has started to rely more on disruptive administration measures such as credit controls using loan to ratio values, second guessing people's decisions and regressing to planning style measures, analysts have said.

In addition to small car owners, potential three wheeler owners were most badly hit.

While ordinary people are suffering state workers are getting tax slashed cars and the ruling class itself it is getting tax free cars.

Motor cycle registrations fell 6.2 percent to 28,662 units in July from a year earlier. Three wheelers were also down 6.3 percent to 1,675 units.

Suv and crossovers registrations were up 19.2 percent to 533 units in July.

Sri Lanka’s Singhe Hospitals facing serious loss of capital

ECONOMYNEXT- Sri Lankan healthcare provider Singhe Hospitals Plc which has experienced 18 straight quarters of losses since debuting in the Colombo Stock Exchange in March 2015, is losing capital and will convert some debt to equity, according to the company.

A Colombo Stock Exchange filing said that Singhe Hospitals ‘is facing a situation of serious loss of capital’, after net assets fell below half of the stated capital.

Singhe Hospitals said this was due to changes in the new income tax laws, which has resulted in the company incurring an additional deferred tax liability of 9.5 million rupees at the end of the fourth quarter of 2018.

The director board will hold an extraordinary general meeting of shareholders on 13 September 2018 to take action.

The company’s Chairman A. M Weerasinghe, the main shareholder with a 77 percent stake, has lent 50.7 million rupees to the hospital.

Singhe Hospitals said that it will convert the debt, along with the 15.5 million rupees of interest on the loan, into equity with a private placement of 66.2 million rupees, subject to shareholder and regulatory approval.

At the end of the first quarter of 2019, the company, which operates the only private hospital in the Sabaragamuwa Province, had accumulated 543.6 million rupees in losses.

It had a stated capital of 848.2 million rupees and a reserve of 119.4 million rupees.

Higher administrative costs have pushed the hospital into the red over the years.

Stockbroker Bartleet Religare Securities had advised not to purchase Singhe Hospital shares at the time of its initial public offering. The 250 million rupee IPO received slow response. It was later oversubscribed with high net worth individual T. Senthilverl purchasing shares.

Singhe Hospitals said that it is hoping the laboratory network it expanded will improve the financial position of the company.

In the June quarter Singhe Hospitals posted a 2.4 million net loss, which is the closest it has got to making profits since going public.

Sri Lanka’s EFL takes over SG Holdings operation in Malaysia

ECONOMYNEXT - Expolanka Freight (EFL), a global freight-forwarding company headquartered in Sri Lanka and part of the Expolanka group, said it is expanding to Malaysia, by taking over operations of its Japanese parent.

“Malaysia is a natural addition to EFL’s global portfolio, largely to drive the intra-Asia growth, and to complement our USA expansion,” EFL chief executive S. Senthilnathan said.

“Being a prominent economy in the region, we believe, it will be an important part of EFL’s footprint, to cement our place as a sought-after freight forwarder in the South East Asia region.”

The company is taking over an existing operation managed by its parent company SG Holdings Global and will officially open for business in Kuala Lampur on 1 September 2018, a statement said.

The office in the regional hub of Malaysia will be its 18th overseas operation.

With Asia contributing significantly to the logistics industry’s growth, growth in trade and domestic demand is seen driving the growth of the transportation and logistics industry.

SG Holdings Global said in a statement the move is part of its strategy for further expansion.

“This will be in line with our group’s goal, as we build on EFL’s extensive global network and expertise to further expand our reach,” it said.

EFL is a member of Expolanka PLC, which has interests in logistics, leisure and investments, with over 60 offices and 2000 staff around the world.

Sri Lanka Access Engineering says real estate strategy seeing results

ECONOMYNEXT - Sri Lanka's Access Engineering says a transition from construction into a real estate firm is seeing early results with apartment and office pre-sales on track to bring more profits, Chairman Sumal Perera has said.

"In the long term, especially following 2020, our real estate projects of Capital Heights and Marina Square Colombo will contribute extensively to our bottom line," Perera told shareholders in the annual report.

"We are also hoping to extend Access Tower II by adding a new wing dubbed Tower III,"

"Our drive is to position ourselves as a key player in the real estate sector, and maintain leadership."

When Access Engineering listed in 2012, the construction business contributed 95 percent to group revenue, but was down to 58 percent in 2017/18.

Property and real estate contributes just 1.9 percent to group revenue. The balance comes from automobile sales (31.35 percent) and construction material sales (9.88 percent).

There were concerns that the real estate market is overheated, but may have cooled since then.

The construction industry has a lot more room to grow with the development of the Colombo Port City project, Perera said.

"Our short to medium-term strategy remains the same with the main focus being on our core business lines of engineering and construction," he said.

--Diversification—

Access Engineering established itself specialising in infrastructure projects building roads, bridges and water and drainage systems, and Sumal Perera says he'll be disappointed if Access Engineering remained a construction company 10 years from now.

Access Engineering is diversifying into real estate, building high-rises for rent income to bring a steady revenue stream and also to increase the group's net asset base.

(Read about Access Engineering's real estate and other diversification strategies here: https://echelon.lk/home/access-to-real-estate-company-from-construction/).

Capital Heights comprising 242 luxury apartments will be completed in 2020 with 40 percent of the apartments already sold. Access Engineering holds a 50 percent stake in the project.

Marina Square is a mixed development project comprising 1,068 condominium apartment units and around 150,000 square feet of commercial space, has recorded presales of 25 percent.

Marina Square is owned by Harbour Village Private Limited a joint venture between Access Engineering, China Harbour Engineering and Musthafa's Singapore and will overlook the Colombo Port.

Access Engineering holds over 60 percent of Harbour Village.

Access Tower 2, built and owned by Access Engineering commenced operations early 2018.

"The A-Grade, office tower of 200,000 square feet of rentable office space was preleased three months prior to opening," Perera said.

The 30-storey Access Tower 2 was built at a cost of 5.3 billion rupees and has parking facilities for 300 vehicles.

Access also owns 21 acres of land though subsidiaries within the IT zone in Malabe which is proposing to build a private university Horizon Knowledge City offering tech, science, law, engineering and paramedical degrees.

Access Engineering is building 608 housing units for government employees at Borella for the Urban Development Authority costing 4.9 billion rupees.

The company completed 941 low-cost housing units comprising two bed rooms, living area and kitchen, toilet and balcony for 3.3 billion rupees, which also for the UDA.

--Real estate earnings boost--

Access Engineering saw profits fall 39 percent from a year earlier to 364.9 million rupees in the June 2018 quarter on falling margins from construction, despite improving earnings from condominium sales and rent.

Earnings were 36 cents a share in the June quarter, latest interim accounts filed with the Colombo Stock Exchange showed. The Share last traded at 15.10 rupees.

Revenue grew 10 percent from a year earlier to 5.8 billion rupees.

Real estate saw revenue increase 312 percent to 196 million rupees, with profits increasing 179 percent to 183 million rupees.

This segment which comprises rents from high-rise buildings owned by the group and apartment sales made the highest contribution to group earnings.

The construction segment reported revenue growth of 5 percent from a year earlier to 3 billion rupees, but profits fell a sharp 82 percent to 86 million rupees.

Construction material sales grew 89 percent to 894 million rupees and profits increased 106 percent to 72 million rupees.

Automobile sales increased 11 percent to 2 billion rupees but profits fell 68 percent to 41.2 million rupees.

Sri Lanka's Odel acquires Cotton Collection for Rs300Mn

ECONOMYNEXT - Sri Lanka's listed fashion retailer Odel said it has acquired a 100 percent stake in Cotton Collection for 300 million rupees to diversify its product portfolio anticipating a fashion-retail boom.

"The decision to enter into this transaction is in line with the company's strategy of expanding the product portfolio and retail foot print," the company said in a stock exchange filing on Wednesday.

The acquisition will give the group 'significant' flexibility in terms of brand positioning utilizing product portfolios of both Odel and Cotton Collection, Odel said.

It is also expected to create synergies of back-office processes and human resource functionality.

The 100 percent stake in Cotton Collection was bought from founder Niloufer Esufally Anverally.

Cotton Collection has 15,000 square feet of retail space across five outlets and employs 200 people.

"Cotton Collection comprises of a home-bred design team that curates bohemian, free-spirited collections that has carved out a niche market share over the years," a statement from the company said.

--Fashion retail boom--

"Fashion, and the interest therein, is only growing," Ashok Pathirage, Odel's Chairman said in a statement announcing the acquisition.

The addition of new malls in the city is expected "open out more retail space to the market and tremendously upgrade the retail shopping and lifestyle experience of the consumer," he said.

The Colombo City Centre Mall opens in September, while The Shangri-La Mall is slated to open in 2019.

Odel is investing 8.3 billion rupees on a mixed development project including a 645,000 square feet mall in Colombo.

"We feel we are well positioned as a group to tap into the immense growth potential that retail would offer and thereby further consolidate our presence in this segment," he said.

Odel's June quarter profits fell 50.6 percent from a year earlier to 21 million rupees on lower consumer spending and high finance costs on loans taken out for the mixed development project.

Earnings per share in the quarter amounted to 8 cents. Odel opened trading Wednesday 50 cents higher at 24.50 rupees.

Sri Lanka's RIL Property seeks further diversification

ECONOMYNEXT- Sri Lankan commercial real estate developer RIL Property Plc will be further diversifying its investments, a senior official said.

“The company will continue to pursue new market opportunities to stimulate growth, which may not necessarily be focused on the realty business,” Chief Executive Hiroshini Fernando said in the annual report.

The report said that a subsidiary, United Motors Lanka Plc (UML) will also diversify into non-core segments.

This will be a continuation of the strategy RIL has adopted over the past three years.

“We have already brought under our wing a world-famous food chain and a premier automobile marketeer, and envision a future of many more additions of premier businesses to our product portfolio,” Fernando said.

RIL Property, which was founded in 2009 and operates two Grade ‘A’ commercial spaces, acquired the franchise of Singapore-based bakery chain BreadTalk in 2015.

The company acquired a 30 percent stake in automobile dealer UML from a related party for 2.4 billion rupees in late 2017 and bought another 21 percent shares through a mandatory offer for 1.7 billion rupees.

The established vehicle dealership was mainly acquired for the land it owns adjacent to RIL’s flagship PARKLAND property on Park Street.

Meanwhile, the BreadTalk franchise narrowed its net losses to 18.9 million rupees in 2018 from 34.6 million rupees a year earlier.

Revenue from the franchise increased to 402.4 million rupees in 2018 from 367.4 million rupees a year earlier with two more outlets being added in 2018 using some of the money raised in RIL’s initial public offering in 2017. This brought the total number of BreadTalk outlets to nine.

However, the centralised production facility for BreadTalk can accommodate 16 outlets, and the under-utilisation of the facility has contributed to the loss in the segment.

BreadTalk’s financials also improved as it developed new bakery items ‘to cater to a wide range of tastes and pocket’ Chairman Sunil Wijesinha said.

Many corporates in Sri Lanka have been following a diversification strategy to mitigate risks from one segment, but some have failed and had to divest or seperate their non-core operations.

Singer says Hayleys seeking investors to sell down stake at right price

ECONOMYNEXT - Singer Sri Lanka Plc, a unit of Hayleys Plc said its parent was in discussions with the parent on selling down its stake to comply with minimum float rules but it may take time.

"The Management of the company is in discussions with the Parent Company on seeking possible remedial action to achieve the said minimum holding threshold," Singer said in a stock exchange filing.

"However it is understood that seeking investors at a mutually agreed price is a time based mater under current market condition."

The firm said its public holding percentage was 7.72 percent and the number of shareholders was 2,615.

Sri Lanka is recovering from a currency collapse in 2015 and 2016, which killed domestic demand, but a recovery in domestic demand had been hit by continued currency depreciation.

Some analysts have said the regulators' liquidity requirements may be too tight, especially for large companies, considering the rules in other countries such the New York Stock Exchange.

Sri Lanka's LMF to invest Rs2bn in new dairy farm

ECONOMYNEXT - Lanka Milk Foods, a unit of Sri Lanka's Melstacorp Plc, said it will invest 2 billion rupees to set up a dairy farm with 2000 milch cows at Ambewele, Nuwara Eliya to meet a growing demand for fresh dairy products.

The company has incorporated United Dairies Lanka which will set up four new barns to house 2,000 milch cows and two modern milking parlours for an estimated investment of 2 billion rupees, it said in a statement filed with the stock exchange.

"The purpose of the new company is to increase the quantity of good quality milk to be utilized in the production of fresh dairy products of our company and focus on developing marketing strategies to meet the ever-increasing demand for these products," Lanka Milk Foods said.

The new plant is likely to double capacity of the group.

Lanka Milk Foods already has 2,100 heads of cattle of Ayrshire and Friesian breeds grazing in 1,500 acres of land in Ambewela, 6,000m above sea-level.

The milk yield is around 16,000 litres a day.

Lanka Milk Foods, controlled by businessmen Harry Jayawardena through Milford Exports and listed Melstacorp Plc, was trading 90 cents lower at 159 rupees.

The company reported a 236.8 million rupee loss in the June 2018 quarter, compared to a profit of 1.4 billion rupees a year earlier, according to latest results filed with the stock exchange largely due to finance costs increasing 164 percent from a year earlier to 42.9 million rupees.

Gross profits were up 13 percent to 206.8 million rupees on revenues growing 10 percent to 1.3 billion rupees and cost of sales falling 10.5 percent to 1.1 billion rupees.
Operating expenses grew 5 percent to 210.9 million rupees.