Softlogic net surges 35 pct on ICT, retailing post-ODEL acquisition

(LBO) – Sri Lanka’s Softlogic Holdings PLC, with diversified interests, reported a 35 percent rise in net profit to 304 million rupees for the three months to June, on revenues of 13 billion rupees, driven by stronger ICT and retailing activities.

Earnings per share was 0.11 rupees for the quarter, up from 0.05 rupees. Full year earnings per share was 0.72 rupees in the year to March. The share last traded at 16.80 rupees.

“Retail sector pulled in the reins to lead in Group turnover with a contribution of 33.4 percent post-ODEL consolidation,” Ashok Pathirage, the chairman of Softlogic, said.

Softlogic acquired more than 90 percent shares in the retailing company ODEL PLC after a 45 percent stake taken in September 2014 for 2.7 billion rupees.

The retail sector contributed 33 percent to the topline with 4.4 billion rupees along with the consolidation of ODEL financials. Pathirage said the group had derived synergies through operational cost savings and better use of a sales platform with ODEL.

“Our first major initiative for ODEL is the development of a megamall adjoining the flagship store at Alexandre Place.”

The mall with 400,000 square feet of space will retail Softlogic brands and rent out space to other retailers, cinemas and restaurants. Blocher Blocher Partners, an architecture and design firm from Germany, has been contracted for its development.

Pathirage said the branded apparel division introduced ‘Pepe Jeans’ and ‘Crocs.’ Giordano and an International watch store had been opened at Liberty Plaza.

For the ICT cluster, revenue more than doubled to 3.8 billion rupees with contributions from its Microsoft and Samsung products, while the group’s interests in healthcare contributed 18 percent to revenues after registering a growth of 10 percent during the quarter.

“We are progressing on the pre-construction schedule for Asiri Kandy Hospital. We target to commence construction in October 2015,” he said.

“Construction of the laboratory and administrative building and the facelift process of Asiri Hospital Holdings in Kirula Road would be completed by mid-2016,” he added.

The automobile sector recorded 296 million rupees in revenue with contributions from its 3S-Ford facility and its ‘King Long’ range of buses, while the leisure sector brought in 131 million rupees or one percent to the top line.

In the leisure sector, Centara Ceysands Resorts & Spa had performed “better than most competitors new in the industry.” The 24-storied Movenpick City Hotel is expected to open in April 2016.

Commenting on future outlook, Pathirage said: “With the group’s growth being rapid and the acquisitions making good commercial sense at this point in time, the returns to group, due to strong synergy and depth, is likely to witness the multiplier effect in growth in the upcoming periods.”

Sri Lanka’s Janashakthi Insurance to raise Rs 3.3bn through rights issue

(LBO) – Sri Lankan insurance player Janashakthi is to raise 3.3 billion rupees by way of a rights issue, the company said in a stock exchange filing.

Subject to the necessary approvals, the company is to issue 181.5 million ordinary shares at 18.50 rupees each in the ratio of one for every two shares.

The proceeds are to be utilized to fund the future expansion of the insurance business, the company said.

The current stated capital of the entity is 1.5 billion rupees consisting of 363 million shares.

The insurance company appointed a new deputy chairman (Husein N Esufally) and a chief executive officer last month.

The stock closed at 23.00 rupees on Wednesday.

Sri Lanka’s Browns & Co plans tourism industry expansion

(LBO) – Sri Lanka’s household goods retailer Brown & Company wants to build two hotels in Maldives and expand from its current 308 operational rooms to approximately 1,000 in the near future, the company said.

“As the tourism industry continues to grow rapidly, Browns will partner by contributing approximately 1,000 rooms in the coming years, supporting country targets of increased tourist arrivals by 2020,” Ishara Nanayakkara, executive chairman of Browns and Company, told shareholders in the company’s 2015 annual report.

The company has signed agreements with an international chain to manage its 172- room hotel in Kosgoda, which will also commence operations in the near future, the annual report said.

Phase one of a plan to construct a 367-room project in the property housing the former Palm Gardens, Riverina and Tropical Villas in Beruwela, is also progressing according to plan.

“Several other strategic locations across the island are also under review for expansion,” Nanayakkara said.

The company said it will expand into regional markets as it builds on the investment in two new properties in the Maldives, which the company made during the year, in line with plans to expand its presence globally.

The group’s hotel chain includes Eden Resort & Spa (158 rooms), the four-star property in Beruwela, Dickwella Resort & Spa (76 rooms), which are both located in Sri Lanka’s South, and the Paradise Resort & Spa in Dambulla (67 chalets). The latest addition to this portfolio, the Calm Resort & Spa, in Pasikuda on Sri Lanka’s Eastern coast, is a four-star hotel which was opened to the public in mid-June 2015.

“Supporting these developments, Browns Investments launched a dynamic website for Browns Hotels & Resorts Ltd to cater to the information needs of travellers both locally and overseas.”

The Company recorded a revenue of 7 billion rupees while gross profit was 1.5 billion rupees and profit before tax was recorded at 1.4 billion with profit after tax (PAT) at 1.3 billion for the financial year 2014/2015.

Sri Lanka's Pan Asia Bank given time to raise capital

ECONOMYNEXT - Sri Lanka's Pan Asia Bank said it had been given more time to raise minimum capital requirements by the Central Bank.

Under the new deadlines the lender should have 5.0 billion in capital by January 2016, 7.5 billion rupees by January 2017 and 10 billion rupees by January 2018.

PABC had net assets of 5.1 billion rupees by June 2015 with gross assets of 85 billion rupees.

Sri Lanka Treasuries yields up across maturities

ECONOMYNEXT – Sri Lankan Treasuries yields rose across the board at Wednesday's auction, with the state debt office accepting five billion rupees worth of bids.

The 3-month yield rose 8 basis points to 6.36 percent, and the 6-month and 12-month yields rose 9 basis points each to 6.66 percent and 6.72 percent.

The central bank offered 16 billion rupees worth of Treasury bills and the auction was oversubscribed by 2.0 times with bids received amounting to 31 billion rupees.

Sri Lanka shares fall from 7-month closing high on retail selling

Aug 20 Sri Lankan shares ended weaker on Thursday, moving away from more than seven-month closing high hit in the previous session, on profit-taking by some retail investors.

Retail investors booked some profit as they waited for the Prime Minister Ranil Wickremesinghe-led government to announce its economic policies after the parliamentary election victory.

The main stock index ended 0.65 percent or 48.96 points weaker, at 7,449.82, slipping from its highest close since Jan. 16 hit on Wednesday.

"It was mostly retail selling because retail investors have bought shares for credit, expecting the index to gain sharply after the election results," a stockbroker said on condition of anonymity.

"Investors are waiting for some clarity on the formation of the government and its economic policies."

Wickremesinghe's centre-right United National Party (UNP) is expected to form a stable government along with President Maithripala Sirisena's centre-left Sri Lanka Freedom Party (SLFP), to help pass promised reforms.

Wickremesinghe is expected to continue as the prime minister of a centre-right government that would seek to revive stalled reforms to make the government more open and accountable.

The day's turnover stood at 1.24 billion rupees ($9.3 million), more than this year's daily average of 1.14 billion rupees.

Foreign investors bought a net 131.3 million rupees worth of equities on Thursday, but they have been net sellers of 1.16 billion rupees so far this year.

The fall in index was led by Dialog Axiata Plc, which lost 2.52 percent. 

($1 = 133.9000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anand Basu)

Sri Lankan shares steady at 7-month high; economic policy awaited

Reuters: Sri Lankan shares ended steady at over seven-month high as investors awaited the Ranil Wickremesinghe-led government to announce its economic policies after the election victory.

Wickremesinghe's centre-right United National Party (UNP) is expected to form a stable government along with President Maithripala Sirisena's centre-left Sri Lanka Freedom Party (SLFP), to help pass promised reforms.

The main stock index ended 0.08 points firmer, at 7,498.78, its highest close since Jan. 16.

"Local investors were active on hopes of a stable government," Danushka Samarasinghe, research head at Softlogic Stockbrokers, told Reuters.

A strong result for the UNP would likely help Ranil Wickremesinghe to continue as the prime minister of a centre-right government that would seek to revive stalled reforms to make the government more open and accountable.

"Improved economic policy credibility and coherence would strengthen Sri Lanka's resilience to growing investor uncertainty towards emerging Asia," Fitch said in a statement.

The day's turnover stood at 2.3 billion rupees ($17.2 million), more than double of this year's daily average of 1.14 billion rupees.

Foreign investors sold a net 61.5 million rupees worth of equities on Wednesday, extending the net foreign outflow to 1.29 billion rupees so far this year.

Shares in Bukit Daraha Plc rose 3.15 percent, while Ceylon Tobacco Co Plc rose 0.17 percent, pushing the index higher. ($1 = 133.9000 Sri Lankan rupees) (Reporting byRanga Sirilal and Shihar Aneez; Editing by Anand Basu)