Sri Lanka's Hatton National Bank Sept net up 17-pct

ECONOMYNEXT - Profits at Sri Lanka's Hatton National Bank grew 17 percent from a year earlier to 4.8 billion rupees in the September 2018 quarter, on better interest margins and forex gains due to rupee depreciation, interim accounts showed.

Earnings were 9.68 rupees a share in the quarter. In the nine months to end September, earnings were 28.25 rupees a share on a profit of 13.8 billion rupees, up 23 percent from a year earlier, interim statements filed with the Colombo Stock Exchange showed.

Hatton National Bank ended 20 cents lower at 215 rupees on Wednesday.

"The bank’s initiatives in centralization and digitalization has yielded a continuous improvement in HNB’s Cost-to-Income ratio, which improved to 36.9 percent for the nine months ending September 2018, exceeding that recorded during the corresponding period of 2017 by 360 basis points," a statement from the bank said.

During the quarter, net interest income grew 15 percent to 13.7 billion rupees as interest income grew 10 percent to 29.5 billion rupees and interest expenses grew a slower 6 percent to 15.9 billion rupees.

Net fee and commission income grew 10 percent to 2.5 billion rupees.

The banking group made a trading profit of 189.3 million rupees in the quarter, up from a loss of 1.8 billion rupees a year earlier due to a revaluation of currency swaps due to rupee depreciation and low volumes compared to the previous year, the bank said.

Bad loans provisioning increased 87.6 percent to 1.8 billion rupees.

Non-performing loans were 3.1 percent of total loans at end September, up from 2.28 percent nine months earlier, "reflecting macro and industry conditions which have precipitated delays across the industry in collections," the bank told shareholders.

Personnel expenses rose 20 percent to 3 billion rupees and other expenses increased 17 percent to 3.1 billion rupees.

Premium income from a subsidiary insurance company increased 20 percent to 1.9 billion rupees while benefits, claims and underwriting expenses rose 17 percent to 1.8 billion rupees.

The banking group's loan book expanded 12 percent from nine months earlier to 736.7 billion rupees at end September while deposits grew 10 percent to 776.3 billion rupees.

Over the nine months period, the bank's interest margin has improved to 4.58 percent, up slightly from 4.25 percent.

Basel III Tier I Capital was 13.25 percent at end September, down from 13.68 percent nine months earlier but above the regulatory minimum of 8.875 percent.

Total Capital adequacy was at 15.67 percent, above the regulatory minimum of 12.875 percent but down from 16.72 percent nine months earlier.

Sri Lanka's Ceylon Grain Elevators net up 101.6-pct in Sept

ECONOMYNEXT- Sri Lankan animal feed and poultry producer Ceylon Grain Elevators Plc net profits in the September quarter grew 101.6 percent from a year earlier to 233.3 million rupees with higher feed and chicken sales, interim financials said.

"Group’s revenue and profitability improved due to increased demand for feed and chicken meat during the quarter under review," Director/Chief Executive Cheng Chih Kwong Primus told shareholders.

"Growth in feed sales volume was driven by consistency in feed quality and maintaining strong partnerships with key chicken processors," he said.

"Profitability of the group has been sustained by efficiency in the farms’ operations and the continued success in optimising formulated feed costs."

The firm said its earnings per share were 3.89 rupees.

Earnings per share for the first nine months of the year were 10.83 rupees, with net profits up 53.2 percent from a year earlier to 649.8 million rupees.

Revenue for the September quarter was up 31 percent from a year earlier to 4.9 billion rupees, while cost of sales grew 27 percent to 4.4 billion rupees, and gross profits grew 78 percent to 506.6 million rupees.

Finance income grew 45 percent to 101.8 million rupees and finance costs were 51.3 million rupees.

The firm had 39.6 million rupees in short-term borrowings by September, from no borrowings at the start of the year.

In the first nine months, post-tax profits from feed milling and farming grew 141.7 percent from a year earlier to 479.2 million rupees while revenue grew 9.7 percent to 12.2 billion rupees.

Post-tax profits from poultry production and sales grew 14.8 percent to 530 million rupees with revenue up 10.5 percent to 2 billion rupees.

The firm said the December quarter will be challenging.

"The Group foresees a challenging market situation in the forthcoming quarter as cost of production will increase substantially due to increase in key raw material prices riding on the severe depreciation of LKR against USD," the chief executive said.

"Also the Group anticipates lower demand with the declining consumer purchasing power as a result of price hikes on basic consumer staples and inclement weather," he said.

Hemas Holdings Sep net up 27-pct; consumer segment drives growth

ECONOMYNEXT - Profits at Sri Lanka's Hemas Holdings Plc grew 27.6 percent from a year earlier to 926.6 million rupees in the September 2018 quarter driven by strong growth in its consumer businesses and stationery subsidiary Atlas, interim accounts showed.

Earnings in the quarter amounted to 1.62 rupees a share. In the six months to end September, earnings were 2.58 rupees a share on a profit of 1.48 billion rupees, up 4.3 percent from a year earlier.

"The lower growth in earnings (in the six months to end September) is due to increased net interest expense post utilisation of cash reserves to acquire Atlas in January 2018, higher working capital due to strong revenue growth in pharmaceutical distribution and the loan financing for our new logistics park, " Chief Executive Steven Enderby told shareholders.

"The business environment remains challenging with significant and on-going currency devaluation through September and October, and political uncertainty impacting the domestic economy, the source of our major business activity," he said.

Hemas was trading 3 rupees higher at 90 rupees on Wednesday.

In the September quarter, Hemas Holdings' revenue grew 44.3 percent from a year earlier to 16.5 billion rupees, with cost of sales growing a faster 53.5 percent to 11.1 billion rupees leading to gross profits increasing 28.3 percent to 5.4 billion rupees.

Selling and distribution expenses rose 41.5 percent to 1.4 billion rupees and administration costs increased 21 percent to 2.5 billion rupees.

Net finance cost was 155 million rupees, down from a net finance income of 71 million rupees a year earlier. The group's total borrowings grew 65 percent from a year earlier to 11.4 billion rupees at end September 2018.

-Consumer driven growth-

Hemas Holdings' September earnings were boosted by its consumer segment which includes FMCG and personal care goods and stationery subsidiary Atlas.

Revenue from the consumer segment grew 80 percent from a year earlier to 6.8 billion rupees in the quarter and profits grew 108 percent to 721.7 million rupees.

"The Sri Lankan home and personal care market continues to be challenging, however we experienced growth from brand re-launches in our core personal care categories. Further, we are also seeing the benefits of our profit improvement programme initiated last year improving operating margins," Enderby said.

Hemas' Bangladesh operations continue to experience challenges amidst intense competition, he said.

"Atlas performance has been on track in the (September quarter, with revenues up by 12.4 percent over the same period last year," Enderby said.

Earnings from healthcare fell 21 percent to 322 million rupees despite revenue increasing 30 percent to 7 billion rupees.

Currency depreciation and price controls are compressing margins at the group's pharmaceuticals distribution business and impacting sales of over the counter drugs, Enderby said.

"Hemas Hospitals achieved an overall occupancy of 57%, with revenues and profitability improving significantly during the September quarter compared to the first three months of the financial year and over last year. The key driver of growth is the continued enhancement in surgical capability," Enderby said.

The Leisure sector saw revenue grow 17 percent to 1 billion rupees but reported a 104 million loss, deepening from a loss of 6.4 million rupees a year earlier due to foreign exchange losses and refurbishment costs.

The group's Serendib Hotels reported a 10.2 percent growth in revenue due to an increase in average room rates and average occupancies across the group reaching 69 percent, up from 64 percent a year earlier, Enderby said.

The travel and aviation segment reported a revenue growth of 22.1 percent driven by newly secured agents under inbound travel, the chief executive said.

Revenue from maritime and logistics-related businesses which includes warehousing and a logistics park increased 7 percent to 719.2 million rupees in the quarter, but profits declined 9 percent to 175.3 million rupees due to fuel price increases.

Revenue from other businesses had grown 34 percent with profits falling 17 percent to 115.2 million rupees.

"Our technology business, N-able witnessed a gradual improvement in the second quarter with increased revenues over last year by 31.7 percent.

However, a significant drop in revenue due to delays in project completion during the first quarter continues to have an impact on year to date profitability," Enderby said.

Nestlé’s Sri Lanka unit Sept quarter net profit up 16-pct

ECONOMYNEXT – Net profits at Sri Lanka's Nestlé unit rose 15.6 percent to 941 million rupees in the September 2018 quarter from a year ago despite lower sales as it restrained costs amid sharply higher tax payments.

Sales of the local unit of the Swiss food multinational fell three percent to 9.3 billion rupees in the period, interim accounts filed with the stock exchange showed.

Cost of sales fell 12 percent to 5.59 billion rupees with gross profit up 13 percent to 3.7 billion rupees.

Nestlé Lanka’s basic earnings per share were 17.52 rupees in the September 2018 quarter.

EPS in the period to September 2018 was 48.77 rupees with net profit up 6.7 percent to 2.6 billion rupees.

Tax costs rose sharply in the September 2018 quarter, up 48 percent to 366 million rupees as Nestlé Lanka became subject to a higher effective tax rates under a new tax law from April 2018.

This led to profit being liable to tax at 28 percent.

Before the new law became effective Nestlé Lanka’s qualifying export profits were taxed at a concessionary rate of 12 percent, profit from its ready-to-drink milk business was taxed at the concessionary rate of 10 percent and profit from offshore business earned in foreign currency exempt from income tax.

Sri Lanka rupee hits record low amid continued political uncertainty

Reuters: ** The Sri Lankan rupee fell to an all-time low of 177.35 per dollar on Monday, as political uncertainty outweighed the positive impact of a policy rate hike, sources said.

** Stocks closed weaker for the second straight session due to political uncertainty and the policy rate hike.

** The political uncertainty remained the main concern of investors a day after President Maithripala Sirisena asked an all-party meeting to hold a third vote on a no-confidence motion against Prime Minister Mahinda Rajapaksa after rejecting the first two motions passed by a majority in the parliament, deepening the country’s political crisis.

** The central bank on Wednesday unexpectedly raised its key policy rates, in a move aimed at defending a faltering rupee as foreign capital outflows pick up amid an escalating political crisis and rising U.S. interest rates.

** The rupee hit a fresh low of 177.35 per dollar on Monday, surpassing its previous low of 176.80 hit on Thursday.

** The currency ended at 177.30/50 per dollar on Monday, compared with 176.60/80 at previous close. It has weakened more than 2.4 percent since the political crisis began on Oct. 26 and more than 15.4 percent so far this year.

** Foreigners sold a net 147.1 million rupees worth of stocks on Monday. They have offloaded equities worth 7.8 billion rupees since the political crisis started on Oct. 26.

** The bond market saw outflows of about 22.9 billion rupees between Oct. 25 and Nov. 7, central bank data showed. This year, there have been 17.3 billion rupees of outflows from stocks and 112.8 billion rupees from government securities, bourse and central bank data showed.

** The Colombo stock index fell 0.13 percent to 5,947.90 on Monday. It declined 0.39 percent last week after falling 1.9 percent in the previous week. Heavy retail investor buying had lifted it 4.5 percent in the week before. It has slipped 6.5 percent so far this year.

** Stock market turnover was 299.6 million rupees ($1.70 million) on Monday, well below this year’s daily average of 838.1 million rupees. 

($1 = 176.7000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)

Sri Lanka rupee hovers near record low amid continued political uncertainty

Reuters: ** The Sri Lankan rupee closed steady on Friday, hovering near its all-time low hit in the previous session, as political uncertainty outweighed the positive impact of a policy rate hike, sources said.

** Stocks closed weaker due to political uncertainty and the policy rate hike.

** The parliament descended into chaos for a second day as lawmakers supporting newly appointed Prime Minister Mahinda Rajapaksa threw books, chili paste and water bottles at the Speaker to try to disrupt a second no-confidence motion. The vote went ahead anyway and for a second time lawmakers turned against Rajapaksa and his new government. It was not immediately clear if President Maithripala Sirisena will accept the vote and appoint a new government.

** The central bank on Wednesday unexpectedly raised its key policy rates, in a move aimed at defending a faltering rupee as foreign capital outflows pick up amid an escalating political crisis and rising U.S. interest rates.

** The rupee hit a fresh low of 176.80 per U.S. dollar on Thursday.

** The currency ended at 176.60/80 per dollar on Friday, unchanged from the previous close. It has weakened more than 2.0 percent since the political crisis began on Oct. 26 and more than 15.1 percent so far this year.

** Foreigners sold a net 55.5 million rupees worth stocks on Friday. They have offloaded equities worth 7.7 billion rupees since the political crisis started on Oct. 26.

** The bond market saw outflows of about 21 billion rupees between Oct. 25 and Nov. 7, central bank data showed. This year, there have been 17.1 billion rupees of outflows from stocks and 110.8 billion rupees from government securities, bourse and central bank data showed.

** The Colombo stock index fell 0.20 percent to 5,955.43 on Friday. It declined 0.39 percent this week after falling 1.9 percent last week. Heavy retail investor buying had lifted it 4.5 percent in the week before. It has slipped 6.5 percent so far this year.

** Stock market turnover was 346.6 million rupees ($1.96 million) on Friday, well below this year’s daily average of 840.6 million rupees. 

($1 = 176.5000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

Sri Lanka rupee falls to record low on continued political uncertainty

Reuters: ** The Sri Lankan rupee fell to an all-time low on Thursday, continuing its record-setting spree, as political uncertainty outweighed the positive impact of a policy rate hike, sources said.

** Stocks closed firmer for a fourth session in five, but turnover was dull due to political uncertainty and the policy rate hike.

** The central bank on Wednesday unexpectedly raised its key policy rates, in a move aimed at defending a faltering rupee as foreign capital outflows pick up amid an escalating political crisis and rising U.S. interest rates.

** Sri Lanka appeared to have ground to a political halt on Thursday, with the speaker of parliament saying there was no functioning prime minister or cabinet after a no-confidence vote the previous day.

** Parliament passed the no-confidence motion against recently appointed Prime Minister Mahinda Rajapaksa and his government with the backing of 122 of the 225 lawmakers, but President Maithripala Sirisena rejected it saying it appeared to have ignored the constitution, parliamentary procedure and tradition.

** Sirisena dissolved the parliament on Friday, two weeks after he sacked Ranil Wickremesinghe as the prime minister, but the Supreme Court stayed his decree of sacking the legislature.

** The rupee hit a fresh low of 176.80 per U.S. dollar on Thursday, surpassing the previous record of 176.60 hit in the prior session.

** The currency ended at 176.60/80 per dollar, compared with the previous close of 176.50/60. It has weakened more than 1.8 percent since the political crisis began on Oct. 26 and more than 15 percent so far this year.

** Foreigners bought a net 23.4 million rupees worth stocks on Thursday, but have offloaded equities worth 7.6 billion rupees since the political crisis started on Oct. 26.

** The bond market saw outflows of about 21 billion rupees between Oct. 25 and Nov. 7, central bank data showed. This year, there have been 17.1 billion rupees of outflows from stocks and 110.8 billion rupees from government securities, bourse and central bank data showed.

** The Colombo stock index rose 0.34 percent to 5,967.34 on Thursday after falling 1.9 percent last week. Heavy retail investor buying had lifted it 4.5 percent in the week before. It has slipped over 6.3 percent so far this year.

** Stock market turnover was 135.8 million rupees ($771,152.75) on Thursday, its lowest since Sept. 6 and well below this year’s daily average of 842.9 million rupees. 

($1 = 176.1000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)