Sri Lanka’s Bogala Graphite March quarter net profit down 51-pct

ECONOMYNEXT – Sri Lankan graphite miner Bogala Graphite said net profits slumped 51 percent to 21.9 million rupees in the March 2019 quarter from a year ago.

Earnings per share for the quarter were 23 cents compared with 47 cents the year before. The share closed at 10.60 rupees Thursday, down 40 cents or 3.6 percent.

Sales of Bogala Graphite, which is controlled by Germany's Graphit Kropfmuhl Gmbh, fell seven percent to 208.6 million rupees in the March 2019 quarter from the previous year.

The accounts showed a sharp fall in other income while tax costs doubled.

Bogala Graphite had returned to profit in 2018 helped by more sales of high value products and the depreciation of the rupee against other trading currencies like the dollar.

Sri Lanka's DFCC March net falls 45-pct on higher taxes, trading losses

ECONOMYNEXT- Net profits at DFCC Bank fell 45 percent to 590.5 million rupees in the March quarter from a year earlier with higher taxes and trading losses.

The group earnings were 3.05 rupees a share. The share closed trading at 68.00 rupees on Wednesday, up from 67.40 rupees on Tuesday.

Interest income for the quarter grew 17 percent to 10.2 billion rupees from a year earlier while interest expenses grew 20 percent to 6.9 billion rupees, leading to net interest income growing 10 percent to 3.3 billion rupees.

The loan book grew 5 percent to 262.5 billion at end-March, compared to the start of the financial year three months earlier.

"The bank lent prudently and did not pursue aggressive growth particularly to sectors that exhibited stress," Director/Chief Executive Lakshman Silva told shareholders in a statement.

Loan losses fell 96 percent to 23 billion rupees.

Gross non-performing loans at the bank level grew to 3.91 percent by March compared to 3.12 percent a year earlier.

Total capital adequacy fell to 15.62 percent from 16.17 percent at end-December.

Fee and commission income grew 8 percent to 467.2 million rupees in March from a year earlier.

Losses from trading amounted to 413.7 million rupees, down from a 292.9 million rupee gain from a year earlier.

DFCC took a 2.3 billion rupee net fair value loss from financial instruments, compared to a 6.2 million rupee gain.

This hit was balanced out with a similar gain in net other operating income, mostly through foreign exchange gains.

"Fair value losses of 1,407 million rupees and net fair value gain of 603 million rupees were recorded on account of equity securities and fixed income securities respectively," Silva said.

"The steep drop of 13.7 percent in the share price of Commercial Bank of Ceylon PLC during the quarter mainly contributed to the reported loss of equity securities, while prices of treasury bills and bonds were favourably impacted by decline in interest rates of government securities."

Income taxes grew 113 percent to 479.4 million rupees amid new and higher taxes on banks.

Deposits at the bank grew to 248.2 billion rupees in March, up 3 percent from December.

Total assets grew 4 percent to 392.49 billion rupees over the three months, while net assets per share fell 3 percent to 166.06 rupees.

Sri Lanka Telecom March quarter net profit up 87-pct

ECONOMYNEXT - State-owned Sri Lanka Telecom Plc (SLT) said group net profit shot up almost 87 percent to 2.2 billion rupees in the March 2019 quarter from a year ago.

Earnings per share rose to 1.22 rupees from 65 cents in the same quarter the year before, according to interim results of the island's main fixed line operator.

The share was trading at 20.50 rupees Thursday morning, up 50 cents or 2.5 percent.

Sri Lanka Telecom group sales rose 7.6 percent to 21.3 billion rupees in the quarter from the year before.

SLT’s core business is its fixed and mobile ICT (information, communications technology) operations with earnings on the increase in fixed-broadband and mobile usage.

The accounts showed pre-tax profit from fixed ICT operations shot up 216 percent to 1.6 billion rupees in the March 2019 quarter from 501 million rupees the previous year.

This includes voice, data, broadband, wholesale, enterprise, cloud, international, and IPTV.

Pre-tax profit from SLT’s mobile operations, its Mobitel subsidiary, rose 26 percent to 1.3 billion rupees during the period.

Sri Lanka’s Colombo Dockyard loss hits Rs187mn in March quarter

ECONOMYNEXT - Sri Lankan ship yard Colombo Dockyard’s losses widened to 187 million rupees in the March 2019 quarter from a loss of 120 million rupees the year before, interim accounts showed.

Sales of the yard, owned by Japan’s Onomichi Dockyard Company Limited, rose 41 percent to 3.7 billion rupees in the period.

Colombo Dockyard loss per share was 2.60 rupees in the March quarter. The share closed at 49 rupees Wednesday, down 90 cents or 1.8 percent.

The accounts showed that Colombo Dockyard’s sip building revenue almost doubled during the quarter and profits increased sharply.

The biggest earnings came from ship repair where sales were flat although profits were up.

Sri Lanka Chevron unit March quarter net profit down 14-pct

ECONOMYNEXT – Chevron Lubricants Lanka said March 2019 quarter net profit fell 14 percent to 603 million rupees from a year ago.

A stock exchange filing said quarterly sales rose 10 percent to 3.3 billion rupees over the same period, although cost of sales rose faster, reducing gross profit.

Earnings per share for the March 2019 quarter was 2.51 rupees.

Chevron Lubricants Lanka shares were trading at 61.60 rupees in mid-morning trade, up 2.50 rupees or 4.2 percent.

The company’s profit margins have been squeezed in recent quarters owing to stiff competition, higher income tax and rising costs from currency depreciation.

However, in February, it won several tenders to supply lubricants to state-owned power stations and transport services

In September 2018, Patrick McCloud took over as chief executive and managing director of Sri Lanka’s Chevron, replacing Kishu Gomes, the firm’s long-serving chief executive, who resigned abruptly in May.

Sri Lanka Seylan Bank March 2019 net up 8.14-pct

ECONOMYNEXT - Profits at Sri Lanka's listed Seylan Bank rose 8.14 percent from a year earlier to 817.4 million rupees in the March 2019 quarter with lower provisioning for bad loans amidst slow credit growth, falling interest margins, expansion costs, and a new debt recovery levy.

Earnings were 2.16 rupees a share in the March quarter, interim financial statement filed with the Colombo Stock Exchange showed.

The stock was trading 2.50 rupees higher on Friday at 59.50 rupees.

Net interest income grew 4.73 percent from a year earlier to 4.5 billion rupees, as interest income rose 18.8 percent to 13.6 billion rupees, and interest expenses grew a faster 27.2 percent to 9.1 billion rupees.

Interest margins narrowed to 4.19 percent, down from 4.24 percent three months earlier.

Net fee and commission income fell 2.9 percent to 965.4 million rupees.

Fair value losses from financial instruments amounted to 622 million rupees, down from a gain of 105 million rupees a year earlier.

Bad loans provisioning fell 40 percent to 589.2 million rupees, "which reflects the improvement in portfolio quality," the bank told shareholders in a statement accompanying the financial results.

Personnel expenses rose 4.38 percent to 1.57 billion rupees and other expenses grew 7.61 percent to 1.37 billion rupees on investments in IT infrastructure, upgrading, and refurbishing branches and staff benefits, the bank said.

The bank had opened two branches in Padukka and Godakawela which add up to 172 banking centres and 210 ATMs as at end March 2019.

A debt repayment levy of 250 million rupees was charged in the quarter which was introduced in the December 2018 quarter.

Seylan Bank's loan book expanded 3.26 percent from end December 2018 to 337.5 billion rupees at end March 2019.

Loans growth was marginal due to rising interest rates, the bank said.

"The growth in credit was driven primarily by term loans, refinance loans and revolving import loans," the bank told shareholders.

Deposits grew 2.65 percent to 367 billion rupees.

Total assets edged up 1.84 percent to 478.3 billion rupees and shareholder funds grew 3.38 percent to 37.4 billion rupees.

Regulatory capital adequacy was at 12.68 percent at end March 2019, down from 13.40 percent from three months earlier, but was above the minimum requirement of 12.50 percent.

Non-performing loans ratio was up to 4.67 percent, from 4.40 percent from three months earlier.

Sri Lanka tourist arrivals fall 7.5 percent in April after bombings

ECONOMYNEXT - Tourist arrivals to Sri Lanka fell 7.5 percent from a year earlier to 166,975 in April amid the Easter Sunday bombings, the state tourism office said.

The Easter Sunday bombings killed over 250 people, including 42 foreigners, and injured over 500, including 37 foreigners.

India, traditionally Sri Lanka's largest tourism market, fell to second place with arrivals falling 21.5 percent to 29,860 tourists in April

The United Kingdom took the number one spot, with arrivals falling 5.2 percent to 26,063 tourists.

The Chinese market fell 18.3 percent to 14,263 tourists, while arrivals from Australia fell 31.8 percent to 9,565 visitors.

Two major markets recorded growth despite the terror attacks. Arrivals from Germany growing 56.7 percent to 16,930 holidaymakers while 7,411 tourists came from France, up 23.4 percent.

So far, 37 countries have issued travel advisories on Sri Lanka.

Sri Lanka Tourism Development Authority Chairman Kishu Gomes said that based on information available, arrivals are expected to fall 60 percent in May.

He is expecting arrivals to fall 30 percent in 2019, and recover within 13 months or sooner, as long as there are no additional terror attacks.

Sri Lanka is expected to lose 1.5 billion US dollars in revenue from tourism in 2019.

The government has been frequently blocking social media and imposing curfews in different parts of the island since the attacks to maintain security.

178-pct tax hike bites Sri Lanka Union Bank March earnings

ECONOMYNEXT - Sri Lanka's listed Union Bank said profits fell 17 percent from a year earlier to 117.6 million rupees in the March 2019 quarter as tax expenses swelled 178 percent in the period as several exemptions were withdrawn and a new levy imposed.

Earnings were 11 cents a share in the quarter, interim results filed with the Colombo Stock Exchange showed. The bank was trading at 11.50 rupees on Wednesday.

"(Earnings) for the period were affected by a significant increase in the effective tax rate. The effective tax rate for the quarter was 72 percent compared to 52 percent in the comparative period," the bank said in a note to shareholders.

Banks are a favourite target for cash-strapped governments.

Union Bank group's tax expenses for the quarter surged 178 percent from a year earlier to 105.4 million rupees.

The increase in the effective tax rate was due to the withdrawal of tax exemptions on profits earned on investments in Sri Lanka Development Bonds, mutual funds, and debentures.

The introduction of a debt repayment levy in the quarter also impacted the bank's effective tax rate. This tax together with a value added tax and nation building tax amounted to 401 million rupees, up 31 percent from a year earlier.

The withdrawal of notional tax credits also impacted earnings, the bank said.

In the March quarter, net interest incomes rose 17 percent from a year ago to 1.2 billion rupees as interest income increased 12 percent to 3.8 billion rupees and interest expenses grew a slower 10 percent to 2.6 billion rupees.

The bank's interest margin improved to 3.24 percent as at end March, up from 2.98 percent at end December 2018.

Net fees and commission income rose 4 percent from a year ago to 246.5 million rupees.

Bad loans provisioning fell 22 percent to 114.6 million rupees on improved credit quality of individual borrowers, the bank said.

However, non-performing loans rose to 4.32 percent of its loan book, up from 3.68 percent from three months earlier.

Personnel costs rose 7 percent to 521.8 million rupees and other expenses were steady at 472 million rupees.

Union Bank's loan book expanded 3 percent in the three months to end March 2019 to 84.6 billion rupees while its deposit base contracted 2 percent to 84.9 billion rupees.

Total capital adequacy was 16.01 percent in end March, down from 16.47 percent three months earlier, but was above the regulatory minimum of 12.5 percent.

“We have got a very positive start to the year 2019 with significant growth in the core banking operations. However, the macro-environmental conditions are very challenging which will have an impact going forward," Union Bank’s Chief Executive Indrajit Wickramasinghe said.

"We also plan to add scale to the Bank through in-organic growth strategies, including portfolio acquisitions with the objective of optimising capital utilisation and thereby enhancing shareholder returns," he said.

Nestlé Sri Lanka profits in March fall on higher interest costs

ECONOMYNEXT- Sri Lanka's Nestlé unit profits for the March quarter fell 39.3 percent to 572.9 million rupees from a year earlier due to higher interest costs, the firm said.

Nestlé's interim financials showed that earnings per share were 10.66 rupees, while the firm was last trading at 1,590 rupees a share at the Colombo Stock Exchange.

Revenue for the March quarter fell 7.7 percent from a year earlier to 8.9 billion rupees, while cost of sales fell 3.5 percent to 6 billion rupees, leading to gross profits which fell 15.2 percent to 2.9 billion rupees.

Net finance expenses grew 819.9 percent to 92.9 million rupees.

"Net financial expenses have increased mainly due to the borrowings for significant capital expenditure and cessation of capitalization of borrowing costs on completion of key project," Nestlé said.

The firm recently completed a 5 billion rupee coconut milk processing plant, which is the single largest investment it has made in Sri Lanka.

Nestlé has 2 billion rupees in long-term borrowings in March, unchanged from the start of the financial year in January, while short-term borrowings grew to 1.9 billion rupees from 1.5 billion rupees.

The firm's total assets were stable at 17.8 billion rupees.

Parent Nestlé S. A. owns 90.82 percent of the shares in its local unit.

Sri Lanka HNB Assurance March net down 83-pct

ECONOMYNEXT - Profits at Sri Lanka's listed HNB Assurance fell 83 percent from a year earlier to 119 million rupees in the March 2019 quarter on rising costs, claims and benefits payouts and higher transfers to the life fund, interim results showed.

Earnings amounted to 2.38 rupees a share, according to interim financial statements filed with Colombo's stock exchange. The share was trading 3 rupees lower on Thursday at 114.90 rupees.

In the March quarter, net written premiums after re-insurance costs grew 15 percent to 2 billion rupees.

Gross written premiums in the general insurance business grew 12 percent to 1.26 billion rupees and life insurance premiums grew a faster 17 percent to 1.23 billion rupees in the quarter.

Net investment income grew 10 percent to 569 million rupees.

Claims and benefits paid increased by 45 percent to 937.6 million rupee while underwriting and acquisition costs rose 4 percent to 304 million rupees.

Transfers to the life insurance fund grew 31 percent to 691.6 million rupees.

Operating and administrative expenses were steady at 486.5 million rupees while finance costs surged 141 percent to 27.8 million rupees.

HNB Assurance's life insurance contracts grew 6 percent from end-December 2018 to 13 billion rupees and general insurance contracts rose 8 percent in the same period to 2.7 billion rupees.

Total assets had grown 7 percent to 23.8 billion rupees.

Listed Hatton National Bank was the main shareholder with a 59.99 percent stake.

Sri Lanka Siyapatha Finance March net down 53-pct

ECONOMYNEXT - Profits at Sri Lanka's Siyapatha Finance, a unit of listed Sampath Bank, fell 53 percent from a year earlier to 69.7 million rupees on shrinking margins, rising costs, and bad loan provisioning.

Earnings were 1.10 rupees a share for the quarter, interim results filed with the Colombo Stock Exchange showed. The company is fully owned by Sampath Bank and only its debentures are listed on the exchange.

Net interest income grew 3 percent to 645.9 million rupees as interest income increased 17 percent to 1.7 billion rupees while interest expenses grew a faster 27 percent to 1 billion rupees.

Net fee and commission income grew 7 percent to 76.5 million rupees.

Credit loss expense on financial assets and other losses rose 57 percent to 224.3 million rupees.

Personnel expenses were up 7 percent to 195.7 million rupees and other operating costs grew 37 percent to 162 million rupees.

Taxes on financial services like VAT grew 7 percent to 74 million rupees while income tax expense fell 53 percent to 53.8 million rupees.

The finance company's loan book expanded 5 percent from three months earlier at 34.8 billion rupees at end March 2019.

Deposits grew a faster 27 percent to 12.2 billion rupees while its debts fell 3 percent to 20.7 billion rupees.

Siyapatha had a core capital adequacy ratio of 9.07 percent at end March, down from 9.40 percent three months earlier, but above the regulatory minimum of 6 percent.

Total risk weighted capital cover was 11.77 percent, above the 10 percent regulatory minimum, but was below 12.21 percent end December 2018.

The capital funds to deposit liabilities ratio was at 39.22 percent, down from 47.77 percent three months earlier but well above the minimum requirement of 10 percent.

Sri Lanka's LIOC profits grow with cheap oil, pricing formula

ECONOMYNEXT- The Sri Lanka unit of the Indian Oil Company said its net profits were 938 million rupees in the March 2019 quarter, up from a 92 million rupee loss from a year, with lower oil prices making up for lower sales.

Lanka IOC's (LIOC) basic earnings per share were 1.76 rupees, while the firm's share was 40 cents higher at 17.80 rupees in intra-day trading on Wednesday.

Revenue for the March quarter was 18.5 billion rupees, down 22.2 percent from a year earlier, while cost of sales fell 28 percent to 23.8 billion rupees, leading to gross profits of 1.4 billion rupees, up 258.3 percent.

During the March quarter, a price-reflective formula was in place, compared to a year earlier, when the government was implementing fixed prices.

Oil prices had plunged in November and December 2018 after the US said it would not impose sanctions against Iran trading oil, and prices had remained below the previous year in the months since.

Meanwhile, LIOC's finance income fell 50.3 percent to 125.9 million rupees while finance cost fell 80.8 percent to 29 million rupees.

The firm's borrowings as at March 31, 2019 fell to 2.3 billion rupees from 5 billion rupees a year earlier.

Its assets fell to 28.2 billion rupees from 32.9 billion rupees with the unwinding of short-term investments, although the firm was seen stockpiling low-priced oil.

Sri Lanka’s Talawakelle Tea March quarter profit down 34-pct

ECONOMYNEXT – Sri Lanka’s Talawakelle Tea Estates said net profit fell 34 percent to 172 million rupees in the March 2019 quarter from a year ago.

Sales rose two percent to 1.1 billion rupees, according to interim accounts filed with the Colombo stock exchange.

March 2019 quarter earnings per share was 7.22 rupees. The share last traded at 44.90 rupees, up 2.3 percent.

In the 12 months to March 2019, EPS fell to 17.05 rupees with net profit down 26 percent to 405 million rupees.

The accounts of the Hayleys group firm, which mostly grows tea, showed annual tea sales dropped slightly in the year with profit also down while losses from rubber widened.

Profits doubled in the firm’s mini hydro power business to 31 million rupees compared from a year ago.

Sri Lanka Overseas Realty March profits up on apartment sales

ECONOMYNEXT - Profits at Sri Lanka's Overseas Realty, a real estate company which has built a war chest of retained earnings nearly the size of its property portfolio, grew 17 percent from a year earlier to 1.4 billion rupees in the March 2019 quarter on growing apartment sales.

The company which owns Colombo's iconic World Trade Centre and Havelock City, a condominium and commercial real estate project, reported earnings of 1.12 rupees a share for the quarter, according to interim financial results filed with the Colombo's stock exchange.

The stock was trading 50 cents higher at 15 rupees.

Revenue in the quarter grew 67 percent from a year earlier to 2.3 billion rupees with apartment sales surging 119 percent to 1.63 billion rupees, mainly due to recognition of revenue from Phase 4 of the Havelock City Commercial Development project, the company said.

Havelock City when completed in April 2021 will comprise a 50-storeyed office tower, shopping mall and condominiums.

Phase 4 of the project will add 340 units and will be completed by October 2022 with pre-leasing of retail space already begun, the company said.



Phase 3 consisting of 304 units will be completed by September 2019.

Rental income was up 9 percent to 605 million rupees. The company has 185 condominium units including at World Trade Centre Colomb from which it earns rental income.

Market rates for rent per square foot was between 250-375 rupees in 2018, easing up to 260-385 rupees in 2019 and is expected to increase 5 percent annually over the next 3-10 years, the company said.



Cost of apartment sales grew 141 percent to 951.2 million rupees while direct operating expenses were steady at 157 million rupees, leading to gross profits growing 45 percent to 1.2 billion rupees.

Administration expenses had grown 15 percent to 117.3 million rupees and net finance income declined 27 percent to 72.8 million rupees.

The company reported a forex loss of 26 million rupees compared to a gain of 72.5 million rupees a year earlier.

It also booked a gain of 275.8 million rupees on valuation of property, down 5 percent from a year ago.

The company's investment properties were valued at 27.3 billion rupees at end March 2019, gaining a marginal 1 percent from end December 2018.

Total assets fell 2 percent over the three-month period to 48.7 billion rupees but Overseas Realty's war chest of retained earnings grew 7 percent to 22.6 billion rupees.

Loans had grown 7 percent to 3.1 billion rupees.

Sri Lanka's Singer Finance March net up 20-pct on leasing, loan book expansion

ECONOMYNEXT – Profits at Sri Lanka Singer Finance grew 20 percent from a year earlier to 153 million rupees in the March 2019 quarter on improving margins and leasing and loan book expansion, interim accounts showed.

Earnings at the Singer (Sri Lanka) Plc unit amounted to 76 cents for the quarter, according to results filed with the Colombo Stock Exchange. The stock was trading at 13 rupees on Friday.

Earnings were 2.68 rupees for the year to end March 2019 on a profit of 577.7 million rupees, up 22 percent from a year ago as net interest income rose 26 percent to 2.2 billion rupees with interest income rising 27 percent to 3.8 billion rupees and interest expenses growing 28 percent 1.6 billion rupees.

During the March quarter, net interest income grew 20 percent to 577.7 million rupees as interest income grew 28 percent to 1 billion rupees and interest expenses rose 39 percent to 462.8 million rupees.

Profits from Singer Finance's leasing business grew 21 percent to 364 million rupees while earnings from loans surged 125 percent to 115 million rupees.

In the March quarter, the company's leasing portfolio expanded 23 percent from end December 2018 to 13.9 billion rupees while its loan book grew 34 percent in the same three-month period to 3.9 billion rupees.

Net fee and commission income was up 9 percent to 55.3 million rupees.

Bad debt provisioning was up 108 percent to 126 million rupees.

In the year to end March, net fee and commission income had grown 34 percent during the year to 237 million rupees.

Bad debt provisioning rose 59 percent to 282 million rupees.

Personnel costs were up 31 percent to 480 million rupees and administration expenses grew 28 percent to 738.3 million rupees.

Value added tax costs 53 percent to 260 million rupees and income tax expense rose 30 percent to 181 million rupees.

The deposit base had grown 13 percent to 6 billion rupees at end March, from December 2019 while borrowings rose 53 percent to 6.6 billion rupees.

Total assets had grown 22 percent to 19.5 billion rupees at end March.

Singer Finance's parent, Singer Sri Lanka, is controlled by Hayleys Plc.

Sri Lanka Entrust Securities loss, capital erosion deepens

ECONOMYNEXT - Losses at Entrust Securities, a primary dealership embroiled in fraud and barred by regulators from carrying out operations since 2017, deepened 43 percent from a year earlier to 1 billion rupees in the year to end March 2019, as regulators mull liquidating the firm.

The company reported a loss of 30.92 rupees a share in the year, interim results filed with the Colombo Stock Exchange showed.

Total assets of the firm fell 80 percent from a year earlier to 407 million rupees at end March 2019 with financial assets declining 63 percent to 167 million rupees and the loan book disintegrating by 90 percent to 145 million rupees.

Financial liabilities fell 13 percent to 8.8 billion rupees and Entrust's accrued losses deepened further into the red by 9 percent to a negative 12 billion rupees.

The firm's March 2015 accounts audited by PricewaterhouseCoopers showed assets of 17.3 billion rupees, which declined to 16.4 billion rupees by June 2016 with a profit of 95 million rupees reported then.

State-owned National Savings Bank was entrusted by the regulator to manage the company since January 2016.

The Central Bank had barred Entrust from engaging in primary dealer activities since July 2017.

In the year to end March 2019, net interest expenses were steady at 678.3 million rupees as interest income from government securities fell 85 percent to 64.7 million rupees and interest expenses rose a slower 31 percent to 743 million rupees.

Capital gains from the sale of government securities amounted to 19 million rupees compared to a loss of 68 million rupees a year earlier.

Gains from revaluating government securities fell 75 percent to 23.4 million rupees.

Administration costs fell 23 percent to 63 million rupees and net finance costs declined 18 percent to 8.4 million rupees.

Entrust reported 270 million rupees in defaulted taxes for the year.

"The Central Bank of Sri Lanka is contemplating on liquidating of the company in the near future, though the timing of the commencement of the process has not been decided as at the reporting date," Entrust said in the notes to the financial statements.

The independent auditors said it had not received evidence for collateral in respect of repurchase agreements worth 8.4 billion rupees.

The auditors had called for confirmations from counter parties to repurchase agreements worth 8.8 billion rupees, but only deals for 5.7 billion rupees had been confirmed.

Entrust Securities had taken billions of rupees from large investors and several state pension funds using government bonds as collateral, but these bonds were sold to third parties.

Among the top victims is the provident fund of state Ceylon Electricity Board, and the Central Bank's own pension and rural development department funds.

According to its annual report Rs1.4 billion of rural development funds were found to be "uncollateralised".

The Central Bank worker's Widows' and Orphans fund was hit for 283 million rupees and its Gratuity and Medical Benefits scheme for 129 million rupees.

Top officials had been arrested in connection with the fraud. They were Dharmapriya Bandara Dassanayake (Chairman), Chanuka Ratwatte (managing director), Romesha Dushanthi Senarath (Executive Director), Sanjeewa Dayaratne and Niloshan Romelo Mendis (Director).

In 2017, a government minister told parliament that Entrust had funded the Carlton Rugby Tournament connected to ex-President Rajapaksa's son Namal with millions of rupees.

The firm owned the Western Warriors club, whose Captain was Yoshitha another of Rajapaksa's sons, who was brought from an auction for 11 million rupees, Minister Kabir Hashim told parliament in 2017.

He said the central bank had not taken any action during the Rajapaksa regime despite on-site investigations by examiners showing money was missing.

Sri Lanka's Jetwing Symphony posts profits for first time in March

ECONOMYNEXT- Sri Lanka's hotel firm Jetwing Symphony (JETS) said its net profits for the March 2019 quarter were 89.2 million rupees, up from a 2.6 million rupee loss from a year earlier, amid foreign exchange gains from a stronger rupee.

The firm's earnings per share for the quarter were 17 cents, while the share last traded at 10 rupees in the Colombo Stock Exchange.

This is the first quarter in which the firm, which operates five hotels and is building one more, is posting profits, after going public in December 2017.

It is a holding company for new hotels owned by the Jetwing Group, one of Sri Lanka's largest leisure and travel companies.

Jetwing Group Chairman Hiran Cooray said that almost all the properties made profits during the quarter, except for the hotel in Arugam Bay, which suffered due to the off-season in the surfing destination.

JETS' revenue for the March quarter grew 19 percent from a year earlier to 608.1 million rupees, while cost of sales grew 16 percent to 97.9 million rupees, leading to gross profits growing 20 percent to 510.2 million rupees.

Tourist arrivals to Sri Lanka had grown only 5 percent during the quarter, as the country recovered from a political crisis in the December quarter.

Cooray said that as the new hotels mature, the management is getting better control of variable costs, leading to better gross profit margins.

With the Sri Lankan rupee gaining on the dollar during the quarter, JETS' made a foreign exchange gain of 44.1 million rupees from a dollar loan from a 21 million rupee loss a year earlier, when the local currency depreciated.

Finance expenses for the quarter grew 5 percent to 119.9 million rupees.

Long-term borrowings for the firm fell 20 percent to 2.2 billion rupees from a year earlier, while short-term borrowings grew 39 percent to 2 billion rupees.

Total assets remained stable at 10.2 billion rupees.

For the 2019 financial year, JETS posted a net loss of 280.6 million rupees, down 20 percent from 2018, while the loss per share was 56 cents.

Revenue for the year grew 26 percent to 1.9 billion rupees and cost of sales grew 15 percent to 316 million rupees, leading to gross profits growing 29 percent to 1.6 billion rupees.

Profits fell due to foreign exchange loss from the loan growing 423 percent to 155.7 million rupees as the rupee depreciated until December.

Sri Lanka’s Hayleys Fabric loss narrows in March quarter

ECONOMYNEXT – Losses at Sri Lanka’s Hayleys Fabric PLC fell sharply in the March 2019 quarter from a year ago as sales rose with the firm ending the financial year back in profit.

The Hayleys group firm’s March quarter loss fell 83 percent to 94,109 US dollars from 543,143 dollars a year ago, according to interim accounts filed with the stock exchange.

Quarterly sales rose 21 percent to 18.5 million dollars. The stock last traded at 7.90 rupees, down six percent.

Hayleys Fabric made a profit of just over a million dollars in the year to 31 March 2019 from a loss of 679,516 dollars the year before with sales up 21 percent to 70 million dollars.

Sri Lanka's HNB profits down 55-pct in March, credit flat

ECONOMYNEXT - Profits at Sri Lanka's Hatton National Bank fell 55 percent to 1.94 billion rupees in the March 2019 quarter from a year earlier, amid sharply higher loan losses, a new tax and slow credit, interim accounts show.

The group reported earnings of 3.89 rupees per share for the quarter.

HNB group Interest income grew 17 percent to 31.3 billion rupees in the March quarter, interest expenses grew at slower 14 percent to 31.6 billion rupees and net interest income grew at a faster 21 percent to 14.6 billion rupees.

Loans were flat at 749 billion rupees at bank level. Loans barely grew to 772.2 billion rupees at group level from 770.2 billion rupees.

Loan losses trebled to 4.6 billion rupees in the quarter from 1.57 billion rupees a year earlier.

Gross bad loans grew to 3.37 percent from 2.85 percent. Total capital adequacy improved to 14 percent from 12.63 percent with capital being boosted to 47.9 billion rupees from 43.4 billion rupees.

Operating expenses grew 27 percent to 9.0 billion rupees with personnel cost up 20 percent to 3.25 billion rupees.

Value added tax on financial services fell 21 percent to 1.04 billion rupees, nation building tax fell 20 percent to 140 million rupees and a new debt repayment levy cost 583 million rupees.

The total balance sheet marginally contracted to 1,084 billion rupees from 1,086 billion rupees at banks level. At group level, total assets barely grew to 1,149 billion rupees from 1,148 billion rupees.

Sri Lanka's central bank printed money in March and April 2018 to generate monetary instability just as the credit system was recovering from an earlier balance of payments crisis triggered by its soft-pegged exchange rate regime involving real effective exchange rate targeting.

In the last quarter of 2018, a political instability triggered by President Maithripala Sirisena worsened monetary instability generating capital flight.

The currency collapse and prolonged liquidity shortages after a recovery of less than a quarter due to a combination of real effective exchange targeting and trying to close the gap between a perceived output and measured output.

Sri Lanka's NDB March quarter net profit down 13-pct

ECONOMYNEXT - Profits at Sri Lanka’s National Development Bank (NDB) fell 13 percent to just over a billion rupees in the March 2019 quarter from a year earlier, as growth slowed amid rising bad loans and taxes, interim accounts showed.

The group reported earnings of 4.54 rupees per share for the quarter, down 30 percent. The share was trading at 86.70 rupees Wednesday, down 1.9 percent.

Interest income grew 29 percent to 12.8 billion rupees in the March 2019 quarter from a year earlier and expense grew at a slower 24 percent to 8.1 billion rupees with net interest income up 38 percent to 4.7 billion rupees.

The bank’s Net Interest Margin (NIM) was 3.41 percent, compared to 3.49 percent a year ago.

Loans grew two percent to 351 billion rupees or by 6.7 billion rupees from the year before.

An NDB statement said its gross non-performing loan (NPL) ratio was 3.37 percent in the March 2019 quarter, up 52 basis points from 2.85 percent at end-2018.

“This increase is a reflection of the wider trend in industry NPLs, as a result of the challenging conditions experienced in the country.”

Growth in customer deposits was almost stagnant from end-2018, up by just one percent to 351 billion rupees, or by 3.5 billion rupees but up 24 percent from a year ago

NBD group chief executive Dimantha Seneviratne said the bank saw a moderation in growth having accounted for the prevailing economic conditions and the industrywide trends in escalating NPLs.

“The bank’s growth has been calibrated to match such conditions, and it has taken a cautious approach with sound risk management and credit underwriting practices, to ensure healthy and sustainable growth.”

The NDB statement said the fall in profits was owing to higher taxes including the new Debt Repayment Levy and the impact from exchange losses incurred on the revaluation of the foreign currency reserves of the bank.

It said other operating income was contained to 44 million rupees in the March 2019 quarter, given the exchange losses incurred on the revaluation of the foreign currency reserves of the bank, due to the appreciation of the Sri Lankan rupee in the first quarter of 2019.

Net fee and commission income grew by 22 percent to 864 million rupees from a year ago owing to the expansion of fee generating business activities and volume growths.

Impairment charges for loans and other losses rose to 842 million rupees in the quarter ended 31 March 2019 from 800 million rupees the year before.

Sri Lanka’s Haycarb March quarter net profit up 61-pct

ECONOMYNEXT – Sri Lankan coconut shell-based activated carbon manufacturer Haycarb said net profit shot up 61 percent to 440 million rupees in the March 2019 quarter from a year ago.

Sales of the Hayleys group firm went up almost 43 percent to 6.6 billion rupees, interim accounts showed.

Haycarb reported earnings per share of 14.80 rupees in the March 2019 quarter. The share closed at 130.80 rupees, Wednesday, down 1.20 rupees or 0.9 percent.

EPS for the financial year to 31 March 2019 were 32.16 rupees with net profit up 42 percent to 955 million rupees and sales up 35 percent to 20.9 billion rupees.

Haycarb and Hayleys chairman Mohan Pandithage said that Haycarb posted “noteworthy results” through the execution of its strategic plan in a year of significant challenges in the raw material supply chain for the activated carbon business and adverse local business environment for the environmental engineering segment.

Haycarb managing director Rajitha Kariyawasan said the activated carbon business faced shortages and high cost of raw material in Thailand while the effects of shortages and high prices in Sri Lanka and India up to the third quarter of the year impacted operations negatively.

“The availability of raw material in Indonesia continued to be stable during the year under review contributing significantly to the results,” he said in a statement.

The retention of existing suppliers and broad basing the procurement network of the coconut shell charcoal supply chain in key coconut growing countries in the region, remains one of the most important initiatives of the company in the short to the medium term, he said.

Kariyawasan said productivity improvement initiatives launched under the ‘Lean Operational’ platform reduced costs and increased value to customers.

“The initiatives launched to acquire new customer accounts, access new geographies, penetrate into new market segments and enhance its value added product portfolio backed by successful new product development projects showed positive results and contributed significantly to the performance of the activated carbon business,” he said.

Sri Lanka’s eChannelling March net profit down 15-pct

ECONOMYNEXT – eChannelling, an online medical appointment business that was Sri Lanka's first listed dotcom, said net profit fell 15 percent to 7.9 million rupees in the March 2019 quarter from a year ago.

Quarterly earnings per share were six cents, down from eight cents the previous year, interim accounts showed. The share was trading unchanged at 3.50 rupees Wednesday.

Sales growth of the firm, controlled by mobile phone firm Mobitel, a unit of Sri Lanka Telecom, was flat at 35 million rupees in the March 2019 quarter compared with the previous year.

The company, controlled by mobile phone firm Mobitel, a unit of Sri Lanka Telecom, has also added more hospitals to its online service.

eChannelling, which has added more hospitals to its network, is facing competition in its online medical appointment business, from Doc.lk, a firm set up by Dialog, Sri Lanka's largest mobile firm, and Asiri Healthcare group.

Sri Lanka's Commercial Bank net down 23-pct; loans contract

ECONOMYNEXT - Profits at Commercial Bank of Ceylon, Sri Lanka's largest privately held bank, fell 23 percent to 3.129 billion rupees in the March 2019 quarter from a year earlier, as credit contracted, bad loans grew and a new tax hit profits, interim accounts showed.

The group reported earnings of 3.05 rupees per share for the quarter down 25 percent.

Interest income grew 13.8 percent to 31.97 billion rupees interest in the quarter ended March 2019 from a year earlier, expense grew at a faster 16.07 percent to 19.95 billion rupees and net interest income grew at a slower 10.4 percent to 12.1 billion rupees.

Loans and advances contracted to 861 billion rupees from 867 billion rupees a year earlier.

Cash balances grew 15.4 percent to 51.8 billion rupees and interbank loans grew 41 percent to 28.1 billion rupees.

Chief executive S Renganathan said the bank followed a "more cautious approach in expanding its advances portfolio" amid "challenging economic conditions."

"Despite the decline in advances, I am happy to say that the Bank has continued to support the SME sector, as reflected in the satisfactory growth of this portfolio during the quarter," he said.

Loan losses grew 68 percent to 1.89 billion rupees in the quarter from 1.126 billion rupees.

At bank level the gross non performing loan ratio rose to 4.14 percent from 3.24 percent.

Total capital adequacy fell to 15.1 percent from 15.6 percent, but is higher than the minimum 14 percent.

Sri Lanka has seen monetary instability due to the operation of a soft-pegged exchange regime with real effective exchange rate targeting, which led to a collapse of the currency, killing an economic recovery, which was worsened by a political crisis in the last quarter of 2018.

Fee and commission income grew 2.5 percent 2.93 billion rupees.

Financial sector value added tax, nation building tax and a new debt repayment tax rose 39 percent to 1.78 billion rupees.

The bank grew deposits 3.14 percent during the quarter to 1,025 billion rupees, as credit contracted.

When a country recovers from a balance of payments trouble, deposits at bank grow faster than loans, while during a currency crisis, loans will growth with printed money from term reserve repurchase injections from the central bank or its outright treasury bill purchases.

The when banks or other savers buy Treasury bills previously held by the central bank, the currency strengthens, imports and economic activity falls and a balance of payments surplus is generated.

Total assets grew 1.78 percent to 1,221 billion rupees during the quarter. Net assets grew 0.73 percent to 121.4 billion rupees.

Sri Lanka's Sampath Bank profits down 24-pct; balance sheet contracts

ECONOMYNXT - Profits at Sri Lanka's Sampath Bank fell 24.6 percent to 2.11 billion rupees in the March 2019 quarter from a year earlier, as bad loans grew amid monetary instability and a new tax hit the bottomline, interim accounts show.

Sampath Bank group reported earnings of 7.39 rupees for the quarter.

Interest income grew 13.9 percent to 27.1 billion rupees and interest expenses grew at a slower 9.1 percent to 18.24 billion rupees helping net interest income grow 21.8 percent to 18.9 billion rupees.

Group performing loans barely grew by 0.7 percent to 680 billion rupees in the quarter. At bank level loans grew 0.4 percent to 651 billion rupees.

Loan loss provisions grew 71 percent to 3.6 billion rupees.

Gross non-performing loans grew to 4.87 percent of risk assets by end March from 3.69 percent in December.

Fee and commission income fell 1.1 percent to 2.34 billion rupees.

Value added tax on financial services fell 5 percent to 933 million rupees, nation building tax fell 5 percent to 125 million rupees while a new debt repayment levy of 512 million rupees was charged.

Customer deposits grew 1.1 percent to 707 billion rupees during the quarter.

Gross asset contracted 0.3 percent to 914.2 billion rupees during the quarter. Net assets grew 0.2 percent to 90.24 billion rupees. At bank level net assets grew 0.3 percent to 84.6 billion rupees.

Total capital adequacy grew to 16.19 percent from 15.73 percent.

Sri Lanka Browns to buys into African sugar cane bio-energy firm

ECONOMYNEXT - Sri Lank's Browns Investment said it has reached a deal to buy control of a bio-fuel producing sugar farm in the African state of Sierra Leone, which also has a renewable energy power plant.

The investment will be made through B Commodities ME (FZE), Browns units based in Sharjah, UAE.

B Commodities will pay 30 million US dollars to buy a 66.67 percent stake in Grey Reach Investment Limited, which in turn has a 75.1 percent stake in Sunbird Bioenergy (SL) Limited, which is based in Sierra Leone or about 50 percent of the company.

Sunbird Bioenergy (SL) Limited, has 23,000 hectares of land to plant sugarcane and a factory which can produce 85 million litres of bio-fuel a year, Browns said in a stock exchange filing.

Sunbird also has 32 MW power plant.

Sri Lanka's Dialog Axiata March quarter profit up 72-pct

ECONOMYNEXT - Sri Lanka's Dialog Axiata Plc reported group net profit shot up 72 percent to 4.88 billion rupees in the March 2019 quarter from a year ago, helped by foreign exchange gains.

The group had earnings of 60 cents a share for the quarter, according to interim results filed with the stock exchange.

The stock was trading unchanged at 8.90 rupees Tuesday.

March 2019 quarter sales rose 11.5 percent to 29 billion rupees from the year before.

A company statement said the group benefitted from strong EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) performance and non-cash translational forex gains in the March 2019 quarter.

The Sri Lankan rupee appreciated against the United States dollar by 3.6 percent in the first quarter of 2019 compared with a depreciation of 1.5 percent and 8.2 percent in the first quarter of 2018 and fourth quarter of 2018.

“Normalised for non-cash translational forex losses/gains net profit after tax was recorded at 3.6 billion rupees, up 54 percent quarter-on-quarter and 11 percent year-on-year.”