Sri Lanka's Softlogic Holdings plans Rs7bn equity sale to cut debt

ECONOMYNEXT - Sri Lanka's Softlogic Holdings, which has interests in hospitals, retail and finance said it was planning to raise 7 billion rupees from a placement of shares to Mauritius based firm, and cash call on shareholders in a bid to reduce debt.

The board of directors had decided to place 182.22 million shares with Samena Ceylon Holdings Ltd of Mauritius at 17 rupees a share, to raise 3.1 billion rupees. The new shares would be 19 percent of the existing share capital.

Shareholders will then be offered 230.8 million shares also at 17 rupees, at the rate of 24 for every 100 shares, to raise another 3.9 billion rupees.

The privately placed stock will also be entitled to the rights.

Softlogic said the cash from the share sales will be used to settle debt.

Sri Lanka's United Motors net down 52-pct

ECONOMYNEXT - Profits at United Motors Plc, agents for Mitsubishi automobiles in Sri Lanka fell 52 percent to 107 million rupees in the December quarter as revenues plunged 28 percent, interim accounts showed.

The firm reported earnings of 1.07 rupees per share for the quarter. In the nine months to December United Motors reported earnings of 4.16 rupees per share on total profits of 420 million rupees, which fell 38 percent.

Revenues fell 28.7 percent to 3,490 million rupees and cost of sales also fell 32.2 percent to 2,711 million rupees, and gross profit contracted 13.1 percent to 778.8 million rupees.

Finance costs rose sharply by 42 percent to 105 million rupees, despite lower business volumes.

Sri Lanka's car market has slowed amid credit restrictions and tax changes. Sri Lanka's central bank brought credit restriction for motor cars after printing 680 billon rupees to generate a balance of payments crisis and lose 4.0 billion US dollars in forex reserves.

Due to long-standng Mercantilism people in Sri Lanka think BOP crises are caused by trade deficits in general and cars and oil imports in particular. During the 2015/2016 crisis however, oil prices collapsed.

Sri Lanka sells new 15-year, 2033 bonds at 10.05-pct

ECONOMYNEXT - Sri Lanka has sold 80 billion rupees of 5 and 15 year bonds with bonds maturing on 15 January 2033 sold at a weighted average yield of 10.05 percent, the state debt office said.

The 2033 maturity has not been sold before. After the auction the bond was quoted at 10.00/05 percent, dealers said.

The debt office which is a unit of the central bank also sold 40 billion rupees of bonds maturing on 5-year 3-month bond maturing on 15 May 2023 at an average yield of 9.44 percent.

It was last auctioned November 29, 2017 at 10.20 percent. Before the auction the bond was trading around 9.40/50 percent. After the auction it was quoted also quoted at same levels, dealers said.

The cut-off rate s kept secret in Sri Lanka.

The debt office offered 40 billion rupees each and sold 40 billion in each maturity.

It has ended misleading practice of advertising lower volumes and taking higher volumes after a massive scam which allowed insiders to make a killing.

Sri Lanka's Teejay Lanka group net up 5-pct, helped by GSP+

ECONOMYNEXT - Sri Lanka's Teejay Lanka Plc, a knot fabric maker, said profits rose 5 percent to 496 million rupees in the December 2017 quarter from a year earlier, amid volatile cotton prices, but it had a strong order book and extra capacity in India.

The group reported earnings of 71 cents per share for the quarter. In the nine months to December it reported earnings of 1.54 rupees per share on total earnings of 1.08 billion rupees down 26 percent.

Revenues grew 5 percent to 6.6 billion rupees in the December quarter amid delays in getting new capacity in India utilized. Cost of sales rose 5 percent to 5.7 billion rupees and gross profit grew 4 percent to 5.7 billion rupees.

Chairman Bill Lam said teething issues in capacity expansion forced in India had slowed the pace but expected the problems to be sorted in the current quarter.

Rising cotton prices had pressured margins and another yarn price was expected, he said.

Teejay Lanka was operating at full capacity benefiting from GSP+ trade access to Europe.

Standalone profits at Teejay Lanka rose 24-pct to 369 millon rupees.

Sri Lanka's Bairaha Farms Dec net down 53-pct

ECONOMYNET - Profits at Sri Lanka's Bairaha Farms Plc, a poultry and food processing company fell 53 percent to 98.3 million rupees in the December 2017 quarter from a year earlier, amid falling revenues and shrinking margings, interim account showed.

The group reported earnings of 6.15 rupees per share for the quarter. In the nine months to December Bairaha Farms Plc, reported earnings of 18.08 rupees per share on total profits of 289 million rupees, down from 615 million rupees last year.

The stock last traded at 141 rupees.

The group said revenues fell 3 percent to 1,132.6 billion rupees, and expenses rose at a fast 7 percent to 869.7 million rupees, shrinking gross margins 24 percent to 269.75 million rupees in the quarter.

Share of joint venture companies fell to 9.6 million rupees from 47.67 million rupees.

Distribution costs rose 17 percent to 58.7 million rupees.

Finance costs rose 43 percent to 23.39 million rupees. Income tax fell 49 percent to 14.85 million rupees as profits fell.

Sri Lankan shares hold steady; political woes weigh

Reuters: Sri Lankan shares closed little changed on Monday in dull trade as political uncertainty ahead of a local election next month weighed on the sentiment, dealers said.

Sri Lanka will hold a long-delayed local government election on Feb. 10.

President Maithripala Sirisena in an election rally over the weekend said he was ready to form a new government with his Sri Lanka Freedom Party (SLFP), breaking away from the current coalition, in a comment that exacerbated worries about the future of the coalition government.

“The market is stagnated as most of the investors are on wait-and-see approach with election date coming closer,” said Dimantha Mathew, head of research at First Capital Holdings.

“The sluggish trend will continue until the elections are over.”

The Colombo Stock index ended 0.03 percent weaker at 6,453.95, slipping from its highest close since Jan. 12 hit on Friday. The index rose 0.19 percent last week, recording its first weekly gain in three.

Shares in conglomerate John Keells Holdings Plc were down 1.6 percent, while Dialog Axiata Plc lost 0.7 percent, and Sri Lanka Telecom Plc ended 2.5 percent weaker.

Turnover was 337.1 million rupees ($2.19 million), well below last year’s daily average of 915.3 million rupees.

Foreign investors bought a net 404,053 rupees worth of shares on Monday, extending the year-to-date net foreign inflow to 4.02 billion rupees worth of equities. 

($1 = 153.7000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)

Sri Lankan shares hit 2-wk closing high

Reuters: Sri Lankan shares rose for a third straight session to hit a two-week closing high on Friday, led by telecom shares, but trading was dull as investors waited for direction amid political concerns over local-government elections next month, dealers said.

The Colombo Stock index ended 0.12 percent firmer at 6,456.04, its highest close since Jan. 12. The index rose 0.19 percent on week, its first weekly gain in three.

Shares in Hemas Holdings Plc were up 0.5 percent, while Dialog Axiata Plc ended 1.5 percent higher, and Sri Lanka Telecom Plc gained 2.5 percent.

“Things were very slow, even the foreign activity was very low today,” said Dimantha Mathew, head of research at First Capital Holdings.

“Activities have been coming down from the last few days. Probably towards elections it will slow down further as investors are on a wait-and-see attitude.”

Turnover was 264.1 million rupees ($1.72 million), its lowest since Jan. 2 and well below last year’s daily average of 915.3 million rupees.

Foreign investors bought a net 21.2 million rupees worth of shares on Friday, extending the year-to-date net foreign inflow to 4.02 billion rupees worth equities.

Sri Lanka will hold a long-delayed local government election on Feb. 10.

President Maithripala Sirisena said over the weekend that he would handle the economy, taking over from the government’s main coalition partner, led by Prime Minister Ranil Wickremesinghe.

The comments have sparked uncertainty over the future of the coalition government, analysts said.

($1 = 153.7000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)