Sri Lanka’s Expolanka Sept net down 39-pct

ECONOMYNEXT – Sri Lanka’s Expolanka Holdings PLC said September 2016 quarter group net profit fell 39 percent to Rs243 million from a year ago largely owing to a write-down in its investment portfolio because of the stock market slump.

Sales of the group rose 17 percent to Rs16.2 billion over the period, according to interim results filed with the stock exchange.

Earnings per share for the quarter were 12 cents.

For the six months ending 30 September 2016, EPS was 22 cents, with net profit down 31 percent to Rs425 million although sales went up 12 percent to Rs31 billion.

The accounts showed profits from Expolanka’s core logistics business were up only 3 percent to Rs842 million, with sales up 10 percent to Rs26 billion.

The group’s leisure profits fell 8 percent to Rs94 million, although sales shot up 59 percent to almost Rs3 billion.

Expolanka Holdings chief executive Hanif Yusoof said profits fell “primarily due to a decline in other income resulting from a write down in passive investments held at the group level, alongside a more significant drop in exchange gains in comparison to the previous year.”

The write down in passive investments affected the profitability of the group’s venture business sector.

“The depressed stock market along with low liquidity in some of the stocks has resulted in a drop in share prices, affecting our investment value,” Yusoof said. “We are currently exploring possibilities for an exit from this passive investment with an appropriate value realisation to shareholders.”

Yusoof said the core sector logistics recorded an “encouraging” growth of 15 percent in revenue in the second quarter.

“Both air and ocean freight recorded double-digit volume growth for the year,” he said. “As anticipated, margins took a dip in the US trade lane and corrected to a more sustainable level when compared to the high level in the previous year.”

The group’s core markets in India, Bangladesh and Sri Lanka performed well, fueled by healthy volume growth in the US trade lane and a recovery in business from the Europe trade lane.

Yusoof said Expolanka was planning to sell its Indian outbound travel business.

“The Indian outbound had a challenging period on margins with higher cost increases than anticipated,” he said. “The Group has already entered into a memorandum of understanding to explore an exit from this business given the outlook. However, as part of our strategy, we will continue to focus on increasing our value propositions within the leisure.

Nestlé opens Rs500mn milk plant in Sri Lanka

ECONOMYNEXT – Nestlé Lanka said it has opened a milk plant in Sri Lanka’s Kurunegala area with an investment of Rs500 million that will expand its capacity to make popular dairy-based beverages.

The UHT or ultra-heat treatment plant will manufacture Ready-To-Drink (RTD) products like Milo, Nespray Nutri-Up, NescaféIce and Nestomalt, a statement said.

“The new UHT milk plant will positively impact the farmers we work with daily, strengthening our efforts to develop the local dairy industry,” said Shivani Hegde, managing director of Nestlé Lanka.

Nestlé, which has been operating in Sri Lanka for 110 years, focuses on manufacturing products locally, largely using local ingredients, and contributed Rs3.6 billion in 2015 to its dairy farmers as payment for fresh milk.

Central Bank Governor Indrajit Coomaraswamy, who declared open the plant, said the local manufacture of milk products reduces imports.

“External debt is a real challenge the country faces today. Nestlé, however, has greatly benefited the country by helping Sri Lanka earn and save its foreign exchange reserves through the local manufacture of Nestlé’s strong brands,” he said.

Nestlé is also a fine example of a company that has fully integrated itself into the domestic economy through its many initiatives to empower the lives of 20,000 local dairy farmers, he added.

“Their new investment will further increase import substitution and exports in the country,” said Upul Jayasuriya, chairman of the Board of Investment of Sri Lanka.

Sri Lanka Hayleys Sept net profit down 9-pct

ECONOMYNEXT – Sri Lanka’s Hayleys group said September 2016 quarter net profit fell 9 percent to Rs575 million from a year ago, with losses in its plantations business widening.

Sales rose 27 percent to Rs28 billion, according to interim accounts filed with the stock exchange.

Earnings per share for the quarter were Rs7.67. For the six months ending 30 September 2016, EPS was Rs12.40, with net profit down 19 percent to Rs903 million although sales went up 18 percent to Rs52 billion.

The accounts showed lower profits in the group’s transportation and logistics, leisure, power and energy, and purification product sectors, while profits from its gloves, construction materials and agriculture businesses rose.

A company statement said crop losses due to adverse weather conditions and a Government ban on weedicides resulted in the group’s plantation segment’s revenue shrinking from Rs4.7 billion to Rs4.4 billion during the period.

“While systemic issues in the Sri Lankan plantation sector did have a negative effect on the bottom line, these effects were largely mitigated by strong performances across Hayleys Group – particularly with regard to the hand protection and construction material segments,” Hayleys PLC Chairman Mohan Pandithage said.

Sri Lanka Treasuries yields rise at auction

ECONOMYNEXT – Yields on Sri Lankan 06 month and 01-year Treasury Bills rose at Wednesday’s auction while the yield on the 03-month bill remained steady at 8.60 percent, the debt office said.

The one-year bill yield rose 04 basis points to 10.14 percent, according to data from the debt office, a unit of the Central Bank of Sri Lanka.

The 06-month bill yield rose 09 basis points to 9.56 percent.

The debt office got Rs53 billion worth bids and accepted bids of Rs10.4 billion.

AIA Sri Lanka revenue increases by 21%

AIA Insurance Lanka PLC (“AIA Sri Lanka” or the “Company”) announced the financial results of the Company and its subsidiary for the nine months ended 30 September 2016.

Consolidated revenue increased by 21 per cent up to LKR 10,794 million, from LKR 8,954 million reported over the same period in 2015. This growth was mainly driven by the increase in the gross written premium (GWP) of Conventional Life business.

Gross written premium of life insurance business increased by 22 per cent to LKR 7,425 million, from LKR 6,093 million reported over the same period last year. This is attributed to the favourable shift in premium mode mix and growth in business volumes.

Gross written premium of Conventional Life increased 27 per cent to LKR 6,720 million, from LKR 5,271 million reported over the same period in 2015.

Investment income rose by 24 per cent to LKR 3,513 million, benefitting from the interest rate hike and attractive yield locking.

Consolidated profit after tax of continuing business increased by 40 per cent to LKR 199 million, from LKR 142 million reported over the same period last year.

The surplus of the life insurance business is reported annually at the year end and is therefore not included in the profit reported during interim periods in the year.

Shah Rouf, Chief Executive Officer of AIA Sri Lanka, said: “I am delighted to report a 40% increase in consolidated profit after tax for the nine months ended 30 September 2016. Our team continues to dedicatedly implement our strategy of building Premier Agency and Bancassurance distribution to provide our customers with the best of products and services."

"I am confident that we will continue to have strong delivery as we consolidate our position as a leading player in Sri Lanka’s insurance market.”

William Lisle, Chairman of AIA Sri Lanka, said: “I am pleased to see the strong results achieved by AIA Sri Lanka. With focus on delivering profitable growth and sustainable progress through enhanced product portfolio and extended distribution reach, AIA Sri Lanka is well on course to becoming the pre-eminent life insurer in Sri Lanka.”

Through an extensive network of agents, partners and employees across Asia-Pacific, AIA serves the holders of more than 29 million individual policies and over 16 million participating members of group insurance schemes.
www.dailynews.lk

Sunshine Holdings doubles 1h profits

Bolstered by impressive growth in its Agribusiness segment, Sunshine Holdings concluded the half year ended September 30, 2016 (1H17) on a strong positive note.

Consolidated revenue during the period in review rose by 13.6% YoY up to Rs. 9.6 billion, while profits after tax (PAT) increased by 42.2% YoY up to Rs. 935.4 million, leading to a 29% YoY increase Profits to Equity Holders of Rs. 433 million during, and earnings per share of Rs. 3.21 over 1H17.

Healthcare continued to be the largest contributor to top and bottom line performance, accounting for 41.7% of group revenue and 42% of Profit After Tax and Minority Interest (PATMI). The Healthcare sector’s contribution was followed by strong performances across

Sunshine’s Agribusiness and FMCG segments which accounted for 34.2% and 19.6% respectively.

Net Asset Value per share during the same period increased to Rs. 44.9, as compared with Rs. 42.8 at the beginning of the year.

Notably, the performance of Sunshine Holdings over the quarter ended 30th September 2016 (2Q17) amounted to the Group’s highest ever 2Q performance. During this period, profits more than doubled, recording 53.5% YoY growth to reach Rs. 527 million.

Group Managing Director Vish Govindasamy said Sunshine Holdings was able to achieve its highest ever 2Q profits. “These results stand as further evidence of the growing success that our growth-oriented strategy has enabled and the Group remains poised for further expansion and innovation over the medium-long term,”he said.

Healthcare revenue during 1H17 rose by 17.9% YoY driven by growth in the Group’s retail business, however as a result of price controls of Pharmaceuticals, an increased cost of sales and exchange rate fluctuations were absorbed by the company, leading to a 90 basis point (bps) contraction in Earnings Before Income Tax margins (EBIT).

The FMCG sector reported revenues of Rs. 1.9billion in 1H17, up 20.3% YoY, on the back of both volume and price growth while the group’s domestic branded tea business within FMCG sold 1.89 million kilos of branded tea, up 15% YoY, driven by their largest brand ‘Watawala Tea’, and their converter brand ‘Ran Kahata’

PAT from the FMCG segment saw a contraction of 28.2% YoY, to stand at Rs. 164 million in 1H17, with a margin of 8.6%, compared to 14.4% in the same period last year.

High margins witnessed during same period last year were mainly a result of low tea prices which prevailed during the period. Business expansion investments pertaining to scaling up of the ‘Zesta Connoisseur’ brand across Shangri-La properties worldwide also had an impact on the operating margins.

The Agribusiness sector represented by Watawala Plantations (WATA) saw revenue growth of 1.7% YoY to Rs. 3.3 billion, despite a contraction of 6% YoY in Tea revenues, which was mitigated by the group’s flourishing Palm Oil sub sector which recorded a 42% YoY during the period in review.The Palm Oil sector, was able to record a PAT of Rs. 548 million, as compared with a previous Rs. 262 million.

"Packaging revenues increased by 13.4% YoY to Rs. 192 million, leading to a PAT of Rs. 7 million while the changing weather patterns resulted in 27.9% YoY reduction in revenue within the group’s Renewable Energy division. The group, which provides employment to around 12,000, generates over US$ 120 million in revenue," Group MD Vish Govindasamy said.
www.dailynews.lk

Nestle Lanka posts Rs. 3.5 bn profit in first 9 months

Nestle Lanka has recorded a revenue of Rs. 27.8 billion for the first nine months of the year, posting a growth of 6.1% and net profit of Rs. 3.5 billion.

The Company faced stiff cost challenges and volatile market conditions, the impact of which was minimised through cost optimisation measures and consumer led initiatives providing more value.

Nestle Lanka Managing Director, Shivani Hegde said the steady performance is a result of the trust consumers place in their products.”We have once again reaffirmed our position as a leading and respected company, committed to enhancing the quality of life of the people of Sri Lanka, through our strong brands and rural development initiatives.”

Leveraging the Nestle group’s strong R&D capability and Nestle Lanka’s expertise in understanding local consumer preferences, the company launched Nescafe‚ 3 in 1 coffee mix, offering coffee lovers a product perfected to give the right taste and aroma.

The company continued to invest in Sri Lanka and recently invested around Rs. 500 mn in a new state-of-the-art milk processing and packing facility at its factory in Pannala, demonstrating its commitment towards enhancing local fresh milk usage.

www.dailynews.lk