People’s Leasing and Finance plans to venture overseas

People’s Leasing and Finance (PLC), a fully owned subsidiary of the Peoples’ Bank announced its ambitious plan to foray into Southeast Asian region.

PLC’s Deputy Chairman Pradeep Amirthanayagam announced this plan participating at the bell ringing ceremony to commence trading at the Colombo Stock Exchange (CSE) yesterday.

The market opening ceremony was organized as part of the company’s celebrations to mark two decades in the financial services industry.

“As a leading non-bank financial institution in Sri Lanka with an asset base of over Rs.120 billion and a net profit of Rs.4 billion, we are proud to say that we have created value for both the market and the country and it is with utmost pride that we celebrate 20 years of existence today.

“Our parent company Peoples Bank, the most progressive financial institution in the country has propelled and given us the impetus to grow the way we were able to grow.” Amirthanayagam said.

People’s Leasing and Finance CEO D.P Kumarage the company’s financial performance exceeded expectations and is expecting a credit growth of 10 to 15% in the coming year. The company was able to continue its growth momentum despite continued pressure on interest margins, and other industry related rules and regulations.

“People’s Leasing and Finance is also hoping to go into a merger with People’s Merchant finance PLC, however, no final decision has been taken yet in this regard,” Kumarage added.

The company has the honour of being the highest rated non-bank financial institution in the country with two international ratings.

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Access Engineering concludes 2015-16 on solid ground

Access Engineering PLC wrapped up the FY 2015/2016, with a solid performance.

At a Group level cumulative revenue for the year 2015-16 was recorded at Rs. 17.6 billion, a growth of approximately 7% over the previous year. At a company level this was recorded at Rs. 11.6 Bn, a marginal growth of 3.2% over the corresponding cumulative period. A salient feature during the period is the 38% growth recorded by the production of construction related material contributing Rs. 1.5 Bn to company’s top line after the elimination of inter-segment revenue.

During the quarter ended March 31, 2016 revenue was recorded at Rs. 4.5 Bn & Rs. 3 Bn respectively at Group & Company level. The average gross profit margins at the Group & Company level for both the cumulative period & the quarter were well above 20%.

Total Comprehensive Income After Tax for the Group & the Company for the FY 2015-16 recorded at Rs. 2.5 Bn & Rs. 2.1 Bn is a growth of 6.5% & 19.7% respectively.

During the FY 2015-16, the company’s 100% owned subsidiary Access Realties (Private) Limited generated a profit before interest and tax of Rs 152.2 million while it’s 84% owned subsidiary Sathosa Motors PLC generated a PBIT of Rs 471.6 million. The 80% owned Access Projects (Private) Limited generated a PBIT of Rs 250.1 million and the contribution from the Company’s Associates amounted to be approximately Rs 10.1 million.

As at for 31st March 2016, the total asset base of the company amounted to Rs 30.3 Bn and Rs 25.2 Bn at Group and Company level respectively. The equity attributed to the owners of the company was recorded at Rs 17.4 Bn at the Group level while it was Rs 15.9 Bn at Company level. This had been translated in to a Net asset per share of Rs 17.46 at Group level and Rs 15.94 at Company level.

The Company declared a final dividend of Rs. 0.50 per share on 25th May 2016 which is payable on 14th June 2016. This is in addition to the interim dividend declared and paid in December 2015 amounting to another Rs. 0.50 per share.

The Board of Directors of Access Engineering PLC comprises of Sumal Perera, Chairman, Christopher Joshua, Managing Director, Rohana Fernando (COO), Shevantha Mendis, Dharshana Munasinghe, Dilhan Perera, Ranjan Gomez, Professor, Malik Ranasinghe, Niroshan Gunaratne and Dinesh Weerakkody.

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Sri Lankan shares end at over one-month closing low

Reuters: Sri Lankan shares edged down on Tuesday as investors sold banking and large cap stocks amid lack of new catalysts for buying risky assets, and on concerns over foreign investment outflows and rising interest rates.

The benchmark Colombo stock index ended 0.04 percent, or 2.34 points, weaker at 6,550.51, its lowest close since April 29. The index declined 0.94 percent during last week.

"Not much of retail activities in the market," said Atchuthan Srirangan, a senior research analyst at First Capital Equities (Pvt) Ltd.

Analysts said market sentiment was weak as investors were waiting for catalysts such as a big foreign direct investment or initial public offering or inflows from the International Monetary Fund.

Rising interest rates also weighed on the market with treasury bill yields rising between 5 and 27 basis points to near three-year highs at a weekly auction last Wednesday, despite the central bank leaving key policy rates steady for a third straight month.

Foreign investors have been net sellers of 5.58 billion rupees ($37.75 million) worth of equities so far this year, but they bought a net 49.7 million rupees worth of shares on Tuesday, the first net foreign inflow in five straight sessions.

Turnover stood at 700.3 million rupees, lower than this year's daily average of around 795 million rupees.

Shares in biggest listed lender Commercial bank of Ceylon Plc fell 0.93 percent while those in Hemas Holdings Plc dropped 2.93 percent and Distilleries Company of Sri Lanka fell 0.92 percent, dragging the index down.

Shares in top conglomerate John Keells Holdings, ended steady and accounted for 48 percent of the day's turnover.

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anupama Dwivedi)

CEAT Sri Lanka to raise radial tyre capacity by 75-pct

ECONOMYNEXT - CEAT Sri Lanka has announced it will invest Rs 800 million over the next 12 months to increase radial tyre production capacity by 75 per cent, to 70,000 tyres a month from 40,000 to meet growing local and export demand.

The company said in a statement it currently has a 30% share of the radial tyre market and supplies nearly half of Sri Lanka’s overall requirement of pneumatic tyres.

About a third of CEAT Sri Lanka’s current tyre production is exported to 15 countries in South Asia, the Middle East, Africa and the Far East.

The new expansion comes two years after CEAT Sri Lanka commissioned a Rs 600 million radial tyre manufacturing plant at the company’s Kelaniya complex to produce tyres for cars and sports utility vehicles (SUVs).

“Our new investment entails a virtual replication of the plant we opened in July 2014, with new hi-tech machines,” CEAT Sri Lanka Managing Director Vijay Gambhire said.

“This bold decision to almost double production reflects our commitment to Sri Lanka and our confidence in the potential of our tyres to compete with global brands in the domestic and export markets. With this investment, CEAT Sri Lanka’s total investment will rise to Rs 3.8 billion.”

The new machines to be installed would produce 13 sizes of radial tyres, increasing production of several existing sizes as well as adding new sizes to the company’s radial tyre portfolio, which already comprises of 33 sizes - 20 for cars, eight for vans and five for SUVs, Gambhire said.

CEAT Sri Lanka Vice President Sales, Marketing & Exports Ravi Dadlani said the increase in production capacity and the introduction of new sizes will give the firm the potential to double market share.

Among the 13 CEAT radial tyre sizes to be manufactured when the latest phase of expansion is complete, are 31x10.5 R 15 All-Terrain tyres, 265/70R16 H/T, 205/75R 14 H/T and 205/75R15 H/Ttyres under CEAT’s Czar brand, and two export sizes - 215/70 R 15 C and 225/70 R 15 C.

Sri Lanka's Distilleries group net up 9.8-pct

ECONOMYNEXT - Profits at Distilleries Company of Sri Lanka which has interests in alcohol, insurance, plantations and telecoms rose 9.8 percent to 1.358 billion rupees in the March 2016 quarter from a year earlier, helped by the beverage business.

The group reported earnings of 4.53 rupees per share for the quarter. In the year to March profits of 21.16 rupees per share on total profits of 5.6 billion rupees, which were down 32 percent.

At the core alcohol firm net revenues (without taxes) went up 40 percent to 6.2 billion rupees, cost went up at a faster 57 percent to 3.3 billion rupees, but gross profits also rose 24 percent to 2.8 billion rupees.

At group level, revenues went up 28 percent to 9.3 billion rupees, cost and claims went up 27 percent to 6.2 billion rupees, and gross profits rose 30 percent to 3.1 billion rupees.

For the full year, beverages made pre-tax profits of 8.6 billion rupees, up from 8.3 billion, plantations lost 430 million rupees, worsening from 106 million rupees.

Telecoms lost 587 million rupees, a little down from 691 million a year earlier and financial services made profits of 252 million rupees, up from 187 million and diversified made profits of 626 million up from 549 million.

Sri Lanka dockyard seeks to diversify away from offshore vessels

ECONOMYNEXT – Colombo Dockyard is looking to diversify away from making offshore support vessels (OSVs) for the petroleum industry and build other types of vessels like passenger craft given the prolonged slump in oil prices, its chairman has said.

“We have already received several inquiries from adjacent countries in connection to the assembly of passenger boats, barges and other vessels unrelated to oil drilling and OSVs,” Toru Takehara said.

Colombo Dockyard has in recent years specialised in the manufacture of offshore support vessels catering to the oil industry and in oil drilling and exploration operations in particular.

“Given the performance of oil prices, which dropped to historic lows in 2015, demand for OSVs has negatively affected our performance,” Takehara told shareholders in the firm’s annual report.

The ship yard industry performance is currently linked very strongly to the performance of oil markets and oil prices will stay at reduced levels over the short-medium term horizon, he said.

The yard reported a loss last year after Singaporean clients serving the oil industry cancelled one OSV and negotiated reduced prices for three remaining vessels to be delivered.

Sri Lanka Access Engineering March net almost stagnant

ECONOMYNEXT – Sri Lanka’s Access Engineering group’s March 2016 quarter net profit went up 1.5% to 642 million rupees from a year ago with most of the growth coming from the core construction business and also the Sathosa Motors subsidiary.

Sales fell 2.4% to 4.56 billion rupees during the period, according to interim results filed with the stock exchange.

March quarter earnings per share were 64 cents.

EPS in the year ending 31 March 2016 was 2.47 rupees with net profit up 5.3% to 2.5 billion rupees from the year before while sales rose 6.9% to 17.7 billion rupees.

Stock market analysts said Norges Bank, Norway’s central bank which manages the government pension fund, one of the largest sovereign wealth funds, had increased its stake in Access to 21.4 million shares or a 2.1% stake.