Sri Lanka’s Hayleys Fabric loss narrows in March quarter

ECONOMYNEXT – Losses at Sri Lanka’s Hayleys Fabric PLC fell sharply in the March 2019 quarter from a year ago as sales rose with the firm ending the financial year back in profit.

The Hayleys group firm’s March quarter loss fell 83 percent to 94,109 US dollars from 543,143 dollars a year ago, according to interim accounts filed with the stock exchange.

Quarterly sales rose 21 percent to 18.5 million dollars. The stock last traded at 7.90 rupees, down six percent.

Hayleys Fabric made a profit of just over a million dollars in the year to 31 March 2019 from a loss of 679,516 dollars the year before with sales up 21 percent to 70 million dollars.

Sri Lanka's HNB profits down 55-pct in March, credit flat

ECONOMYNEXT - Profits at Sri Lanka's Hatton National Bank fell 55 percent to 1.94 billion rupees in the March 2019 quarter from a year earlier, amid sharply higher loan losses, a new tax and slow credit, interim accounts show.

The group reported earnings of 3.89 rupees per share for the quarter.

HNB group Interest income grew 17 percent to 31.3 billion rupees in the March quarter, interest expenses grew at slower 14 percent to 31.6 billion rupees and net interest income grew at a faster 21 percent to 14.6 billion rupees.

Loans were flat at 749 billion rupees at bank level. Loans barely grew to 772.2 billion rupees at group level from 770.2 billion rupees.

Loan losses trebled to 4.6 billion rupees in the quarter from 1.57 billion rupees a year earlier.

Gross bad loans grew to 3.37 percent from 2.85 percent. Total capital adequacy improved to 14 percent from 12.63 percent with capital being boosted to 47.9 billion rupees from 43.4 billion rupees.

Operating expenses grew 27 percent to 9.0 billion rupees with personnel cost up 20 percent to 3.25 billion rupees.

Value added tax on financial services fell 21 percent to 1.04 billion rupees, nation building tax fell 20 percent to 140 million rupees and a new debt repayment levy cost 583 million rupees.

The total balance sheet marginally contracted to 1,084 billion rupees from 1,086 billion rupees at banks level. At group level, total assets barely grew to 1,149 billion rupees from 1,148 billion rupees.

Sri Lanka's central bank printed money in March and April 2018 to generate monetary instability just as the credit system was recovering from an earlier balance of payments crisis triggered by its soft-pegged exchange rate regime involving real effective exchange rate targeting.

In the last quarter of 2018, a political instability triggered by President Maithripala Sirisena worsened monetary instability generating capital flight.

The currency collapse and prolonged liquidity shortages after a recovery of less than a quarter due to a combination of real effective exchange targeting and trying to close the gap between a perceived output and measured output.

Sri Lanka's NDB March quarter net profit down 13-pct

ECONOMYNEXT - Profits at Sri Lanka’s National Development Bank (NDB) fell 13 percent to just over a billion rupees in the March 2019 quarter from a year earlier, as growth slowed amid rising bad loans and taxes, interim accounts showed.

The group reported earnings of 4.54 rupees per share for the quarter, down 30 percent. The share was trading at 86.70 rupees Wednesday, down 1.9 percent.

Interest income grew 29 percent to 12.8 billion rupees in the March 2019 quarter from a year earlier and expense grew at a slower 24 percent to 8.1 billion rupees with net interest income up 38 percent to 4.7 billion rupees.

The bank’s Net Interest Margin (NIM) was 3.41 percent, compared to 3.49 percent a year ago.

Loans grew two percent to 351 billion rupees or by 6.7 billion rupees from the year before.

An NDB statement said its gross non-performing loan (NPL) ratio was 3.37 percent in the March 2019 quarter, up 52 basis points from 2.85 percent at end-2018.

“This increase is a reflection of the wider trend in industry NPLs, as a result of the challenging conditions experienced in the country.”

Growth in customer deposits was almost stagnant from end-2018, up by just one percent to 351 billion rupees, or by 3.5 billion rupees but up 24 percent from a year ago

NBD group chief executive Dimantha Seneviratne said the bank saw a moderation in growth having accounted for the prevailing economic conditions and the industrywide trends in escalating NPLs.

“The bank’s growth has been calibrated to match such conditions, and it has taken a cautious approach with sound risk management and credit underwriting practices, to ensure healthy and sustainable growth.”

The NDB statement said the fall in profits was owing to higher taxes including the new Debt Repayment Levy and the impact from exchange losses incurred on the revaluation of the foreign currency reserves of the bank.

It said other operating income was contained to 44 million rupees in the March 2019 quarter, given the exchange losses incurred on the revaluation of the foreign currency reserves of the bank, due to the appreciation of the Sri Lankan rupee in the first quarter of 2019.

Net fee and commission income grew by 22 percent to 864 million rupees from a year ago owing to the expansion of fee generating business activities and volume growths.

Impairment charges for loans and other losses rose to 842 million rupees in the quarter ended 31 March 2019 from 800 million rupees the year before.

Sri Lanka’s Haycarb March quarter net profit up 61-pct

ECONOMYNEXT – Sri Lankan coconut shell-based activated carbon manufacturer Haycarb said net profit shot up 61 percent to 440 million rupees in the March 2019 quarter from a year ago.

Sales of the Hayleys group firm went up almost 43 percent to 6.6 billion rupees, interim accounts showed.

Haycarb reported earnings per share of 14.80 rupees in the March 2019 quarter. The share closed at 130.80 rupees, Wednesday, down 1.20 rupees or 0.9 percent.

EPS for the financial year to 31 March 2019 were 32.16 rupees with net profit up 42 percent to 955 million rupees and sales up 35 percent to 20.9 billion rupees.

Haycarb and Hayleys chairman Mohan Pandithage said that Haycarb posted “noteworthy results” through the execution of its strategic plan in a year of significant challenges in the raw material supply chain for the activated carbon business and adverse local business environment for the environmental engineering segment.

Haycarb managing director Rajitha Kariyawasan said the activated carbon business faced shortages and high cost of raw material in Thailand while the effects of shortages and high prices in Sri Lanka and India up to the third quarter of the year impacted operations negatively.

“The availability of raw material in Indonesia continued to be stable during the year under review contributing significantly to the results,” he said in a statement.

The retention of existing suppliers and broad basing the procurement network of the coconut shell charcoal supply chain in key coconut growing countries in the region, remains one of the most important initiatives of the company in the short to the medium term, he said.

Kariyawasan said productivity improvement initiatives launched under the ‘Lean Operational’ platform reduced costs and increased value to customers.

“The initiatives launched to acquire new customer accounts, access new geographies, penetrate into new market segments and enhance its value added product portfolio backed by successful new product development projects showed positive results and contributed significantly to the performance of the activated carbon business,” he said.

Sri Lanka’s eChannelling March net profit down 15-pct

ECONOMYNEXT – eChannelling, an online medical appointment business that was Sri Lanka's first listed dotcom, said net profit fell 15 percent to 7.9 million rupees in the March 2019 quarter from a year ago.

Quarterly earnings per share were six cents, down from eight cents the previous year, interim accounts showed. The share was trading unchanged at 3.50 rupees Wednesday.

Sales growth of the firm, controlled by mobile phone firm Mobitel, a unit of Sri Lanka Telecom, was flat at 35 million rupees in the March 2019 quarter compared with the previous year.

The company, controlled by mobile phone firm Mobitel, a unit of Sri Lanka Telecom, has also added more hospitals to its online service.

eChannelling, which has added more hospitals to its network, is facing competition in its online medical appointment business, from Doc.lk, a firm set up by Dialog, Sri Lanka's largest mobile firm, and Asiri Healthcare group.

Sri Lanka's Commercial Bank net down 23-pct; loans contract

ECONOMYNEXT - Profits at Commercial Bank of Ceylon, Sri Lanka's largest privately held bank, fell 23 percent to 3.129 billion rupees in the March 2019 quarter from a year earlier, as credit contracted, bad loans grew and a new tax hit profits, interim accounts showed.

The group reported earnings of 3.05 rupees per share for the quarter down 25 percent.

Interest income grew 13.8 percent to 31.97 billion rupees interest in the quarter ended March 2019 from a year earlier, expense grew at a faster 16.07 percent to 19.95 billion rupees and net interest income grew at a slower 10.4 percent to 12.1 billion rupees.

Loans and advances contracted to 861 billion rupees from 867 billion rupees a year earlier.

Cash balances grew 15.4 percent to 51.8 billion rupees and interbank loans grew 41 percent to 28.1 billion rupees.

Chief executive S Renganathan said the bank followed a "more cautious approach in expanding its advances portfolio" amid "challenging economic conditions."

"Despite the decline in advances, I am happy to say that the Bank has continued to support the SME sector, as reflected in the satisfactory growth of this portfolio during the quarter," he said.

Loan losses grew 68 percent to 1.89 billion rupees in the quarter from 1.126 billion rupees.

At bank level the gross non performing loan ratio rose to 4.14 percent from 3.24 percent.

Total capital adequacy fell to 15.1 percent from 15.6 percent, but is higher than the minimum 14 percent.

Sri Lanka has seen monetary instability due to the operation of a soft-pegged exchange regime with real effective exchange rate targeting, which led to a collapse of the currency, killing an economic recovery, which was worsened by a political crisis in the last quarter of 2018.

Fee and commission income grew 2.5 percent 2.93 billion rupees.

Financial sector value added tax, nation building tax and a new debt repayment tax rose 39 percent to 1.78 billion rupees.

The bank grew deposits 3.14 percent during the quarter to 1,025 billion rupees, as credit contracted.

When a country recovers from a balance of payments trouble, deposits at bank grow faster than loans, while during a currency crisis, loans will growth with printed money from term reserve repurchase injections from the central bank or its outright treasury bill purchases.

The when banks or other savers buy Treasury bills previously held by the central bank, the currency strengthens, imports and economic activity falls and a balance of payments surplus is generated.

Total assets grew 1.78 percent to 1,221 billion rupees during the quarter. Net assets grew 0.73 percent to 121.4 billion rupees.

Sri Lanka's Sampath Bank profits down 24-pct; balance sheet contracts

ECONOMYNXT - Profits at Sri Lanka's Sampath Bank fell 24.6 percent to 2.11 billion rupees in the March 2019 quarter from a year earlier, as bad loans grew amid monetary instability and a new tax hit the bottomline, interim accounts show.

Sampath Bank group reported earnings of 7.39 rupees for the quarter.

Interest income grew 13.9 percent to 27.1 billion rupees and interest expenses grew at a slower 9.1 percent to 18.24 billion rupees helping net interest income grow 21.8 percent to 18.9 billion rupees.

Group performing loans barely grew by 0.7 percent to 680 billion rupees in the quarter. At bank level loans grew 0.4 percent to 651 billion rupees.

Loan loss provisions grew 71 percent to 3.6 billion rupees.

Gross non-performing loans grew to 4.87 percent of risk assets by end March from 3.69 percent in December.

Fee and commission income fell 1.1 percent to 2.34 billion rupees.

Value added tax on financial services fell 5 percent to 933 million rupees, nation building tax fell 5 percent to 125 million rupees while a new debt repayment levy of 512 million rupees was charged.

Customer deposits grew 1.1 percent to 707 billion rupees during the quarter.

Gross asset contracted 0.3 percent to 914.2 billion rupees during the quarter. Net assets grew 0.2 percent to 90.24 billion rupees. At bank level net assets grew 0.3 percent to 84.6 billion rupees.

Total capital adequacy grew to 16.19 percent from 15.73 percent.