Sri Lanka’s gross official reserves reach US$ 9 billion

The Gross Official Reserves of the Central Bank of Sri Lanka crossed the US$ 9 billion mark on Friday (August 8) for the first time ever in the country’s history, Central Bank Governor Ajith Nivard Cabraal said.

By end May 2014, Sri Lanka’s gross official reserves amounted to US dollars 8.8 billion, equivalent to 5.9 months of imports, while total foreign assets which include foreign assets of the banking sector amounted to US dollars 10.2 billion.

Sri Lanka aims to increase its gross reserves to US $ 10.0 billion by end-2014.
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Aitken Spence breaks ground for US $ 100mn resort

President Mahinda Rajapaksa was the Chief Guest at the ground breaking ceremony of Aitken Spence Hotels’ new venture, ‘RIU Resort, Ahungalla’.

The 501-room resort hotel, which is expected to reach completion by mid 2016, is a US $ 100 million project, planned through a joint partnership between RIU Hotels & Resorts, Spain and Aitken Spence.

This project is launched on a unique platform, which takes into consideration the government’s southern development programmes namely infrastructure such as the southern highway and the Mattala Rajapaksa International Airport.

Aitken Spence Chairman Harry Jayawardena said the timing of the hotel’s opening would be right since the Southern Highway to Hambantota is expected to reach completion by that time.

“We have the Mattala Airport facility already in place, giving us an ideal mix for our business model. Aitken Spence has always encouraged infrastructure development in the country and our investment is proof of our confidence and support to government’s development plans.

The strategy for all our beach resorts in the South including the new RIU Resorts is in line with the government’s vision for further development of the country, especially in the tourism segment.”

Jayawardena stated that today the climate had changed considerably and with five years into the end of the war, it is the responsibility of the private sector to reap the peace dividends; especially since the current government has delivered on their promise on infrastructure development.

“That a lot has been done and more is being done is clearly evident. Therefore it is now our turn to deliver on our promise. We have delivered on the promise of developing overseas, and continue to do so in Sri Lanka. RIU Hotels & Resorts is a giant step in that direction.”

The international RIU chain traces its history back to 1953, when it was founded by the Riu family in Mallorca. The company boasts of more than 100 properties in 16 countries catering to 3.2 million guests a year.

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Touchwood given further time on undertaking by senior counsel

The Commercial High Court yesterday gave former Chairman/CEO of Touchwood PLC Lanka Kiwlegedara time till August 25th, to submit statement of affairs and all other documents pertaining to Touchwood PLC, upon the firm undertaking given by Counsel Nihal Fernando PC.

During the hearing before Commercial High Court Judge Amendra Senevirathna yesterday, the judge said that the extension was only made on the personal undertaking of Nihal Fernando, PC, as he is a senior and respected counsel.

Nihal Fernando, PC, appearing on behalf of Kiwlegedara for the first time yesterday informed court that preparation of the statement of affairs and all other documents would be submitted in due course as his client needed more time to prepare the document.

He said that he received the framework for the necessary documents on August 6 and as such Kiwlegedara had no time to prepare the said documents.

Counsel Hafeel Farisz appearing for the liquidator said the statement of affairs was a legal document listed under winding up rules of 1939 and as such the framework was a legal mechanism which any company being wound up was aware of.

He further said by the letter dated June 15 Kiwlegedara had in fact informed the liquidator that he would submit the statement of affairs within two weeks which the liquidator is yet to receive.

During the hearing which took a heated turn at times, Counsel Avindra Rodrigo appearing on behalf of the Petitioner said the request for further time was a delaying tactic used by Kiwlegedara.

“They took us through a ten month process of winding up and thereafter he has failed to give a single document to the liquidator or to court. The fact that during the last hearing they agreed to submit all the documents and an order made in this regard was completely disregarded. This is contempt of court,” he said.

He further said none of the documents ordered by the court in its previous order were submitted.

“Not one document has been given. The order was to give all documents pertaining to the assets of the company including the statement of affairs which the counsel appearing on that day undertook to do,” he said. Judge Senevirathna reiterating the view of Counsel Rodrigo said there had been many opportunities given to Kiwlegedara to provide the said documents to the liquidator.

Fernando, PC, said he was appearing for the first time and therefore requested for more time in order to submit the said documents.

Fernando, PC, further said the company was willing to corporate with the liquidator to dispose all assets and settle the creditors.

“We will be able to revive the company back again with the help of the liquidator,” he said. The company has enough assets to settle all the depositors, we have assets in Thailand and we will go with the liquidator and look at ways of selling them. These are all valuable assets,” he said. Counsel V.K. Choksy appearing for another creditor also said that Kiwlegedara has been given enough time to produce the said documents pertaining to the assets, but has failed to do so.

Thereafter the court called on the liquidator Sudath Kumara who said the only document he had received so far was a bank statement from Hatton National Bank, which had a balance of Rs.3, 000. However, all parties agreed that since a senior counsel was appearing and making an undertaking, a further date may be granted.

Having heard submissions by all parties, Judge Senevirathna ordered Kiwlegedara to submit all documents pertaining to the assets of the company, and the statement of affairs to be submitted by August 25 to the liquidator.

The Judge said that he was making the extension only due to the application made by Nihal Fernando, PC, who undertook to present all documents.

The next hearing was fixed for 27th August,1.30 pm .
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Dialog consolidates performance with a Net Profit of Rs3.0Bn in 1H 2014

Dialog Axiata PLC announced, Friday 08th August 2014, its consolidated financial results for the six months ended 30th June 2014. Financial results included those of Dialog Axiata PLC (the “Company”) and of the Dialog Axiata Group (the “Group”) post-consolidation with subsidiaries Dialog Broadband Networks (Pvt) Ltd (“DBN”), and Dialog Television (Pvt) Ltd (“DTV”).

The Group recorded strong growth in revenue across Mobile, Digital Pay Television and Fixed Line businesses to reach Rs16.7Bn in Q2 2014 and Rs33Bn for 1H 2014 respectively, representing an increase of 2% Quarter On Quarter (“QoQ”) and 7% Year to Date (“YTD”). 

On the backdrop of strong revenue growth and lower operating costs, Group EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) increased 12% QoQ with Q2 2014 EBITDA being recorded at Rs5.3Bn. Group EBITDA for 1H 2014 was recorded at Rs9.9Bn featuring an EBITDA margin of 30.2%.

Group NPAT (Net profit After Tax) for Q2 2014 was posted at Rs1.7Bn, an increase of 31%
QoQ on the back of growth in Group EBITDA and lower depreciation. Group NPAT for 1H 2014 was recorded at Rs3.0Bn, an increase of 15% YTD largely due to 1H 2013 performance being impacted by foreign exchange losses.

At an entity level, Dialog Axiata PLC (“the Company”) featuring the Mobile, International and Tele-Infrastructure segments of the Group portfolio continued to contribute a major share of Group Revenue (85%) and of Group EBITDA (90%). Underpinned by the contribution from its 9 Million over Mobile subscriber base, Company Revenue grew by 1% QoQ to reach Rs14.4Bn in Q2 2014, with revenue for 1H 2014 being recorded at Rs28.6Bn, up 6% relative to the corresponding period in 2013. Company EBITDA reached Rs4.7Bn in Q2 2014 and Rs8.9Bn for 1H 2014 respectively, representing an increase of 13% QoQ and 1% YTD, largely driven by growth in revenue and lower operating costs. Company NPAT for Q2 2014 increased by 35% QoQ to reach Rs2.0Bn on the back of higher EBITDA. Company NPAT for 1H 2014, was posted at Rs3.5Bn compared to a NPAT of Rs2.7Bn recorded for the corresponding period in 2013 largely due to 1H 2013 performance being impacted by foreign exchange losses.

Dialog Television (DTV) the Digital Pay Television business of the Dialog Group continued its positive performance trajectory to reach a revenue figure of Rs2.2Bn for 1H 2014, exhibiting growth of 30% on a YTD basis. On the back of strong revenue performance EBITDA for the same period grew 70% YTD to be recorded at Rs506Mn. DTV Net Profit for 1H 2014, driven by growth in EBITDA was recorded at Rs222Mn, compared to a Net Profit of Rs10Mn posted for the corresponding period in 2013. The company’s Pay TV subscriber base grew by over 102,000 subscribers YoY to be recorded at 390,000 as at end Q2 2014.

Dialog Broadband Networks (DBN) featuring the Group’s Fixed Telecommunications and
Broadband Business recorded revenue of Rs3.0Bn for 1H 2014, representing an increase of 2% YTD. Following the expiration of VAT credits recognised during the previous year, DBN EBITDA contracted 41% YTD to reach Rs507Mn. DBN’s Net Loss for 1H 2014 was recorded at
Rs655Mn relative to the Net Loss of Rs97Mn in the corresponding period of 2013. Negative
movement in NPAT performance was underpinned by the decline in EBITDA in combine with the increase in depreciation stemming from Fixed 4G LTE related investments.

Group capital expenditure for Q2 2014 amounted to Rs2.5Bn and was focused on coverage and capacity expansion alongside the extension of the Group’s Optical Fibre Network. Group Free Cash Flow (FCF) was recorded at Rs2.5Bn for Q2 2014 on the back of improved EBITDA and lower Capex spend during the quarter. The Dialog Group continued to maintain a structurally robust balance sheet with the Net Debt to EBITDA ratio at Group level being maintained at 1.20x as at end of June 2014.

Hayleys ups revenue by 17% in 1Q 2014/15 - Maintains Growth Momentum

Sri Lankan stocks up for 3rd session; hovers near 3-yr high

(Reuters) - Sri Lankan stocks rose to a near three-year closing high on Friday as hopes of a policy rate cut and further fall in interest rates led investors to snap up banking and diversified shares amid continued buying by foreign investors.

The main stock index edged up 0.15 percent, or 10.05 points to 6,918.23, its highest close since September 13, 2011. It has risen 17 percent so far this year.

"The market continued its run on low interest rates, good results and continued foreign buying," said a stockbroker requesting not to be named.

Foreign investors bought a net 346.6 million rupees worth of shares on Friday, extending the year-to-date net foreign inflow to 12.03 billion rupees.

Turnover was 1.58 billion rupees ($12.14 million), more than this year's daily average of about 1.11 billion rupees.

Stockbrokers said investors had "no option" but to buy into stocks due to low interest rates as the market is expecting another rate cut during the Aug. 15 policy rate announcement.

Central bank chief Ajith Nivard Cabraal on Thursday said there was a greater chance of a cut, rather than a hike, in key policy rates, a day after yields on one-year government debt fell, below the rate of 6.50 percent at which the central bank mops up liquidity from commercial banks.

Hopes over strong earnings, declining interest rates and continued buying by foreign investors have helped boost interest in risky assets in the $22 billion-worth stock market.

Gains were led by Distilleries Company of Sri Lanka Plc which rose 2.99 percent to 210.90 rupees a share while DFCC Bank rose 2.51 percent 175.40 rupees.

The index has been in the overbought region since July 3, as local investors moved funds from fixed income to riskier assets such as shares because of low interest rates and foreign buying. 

(1 US dollar = 130.1700 Sri Lankan rupees) 

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

Sri Lanka stocks close up 0.1-pct

Aug 08, 2014 (LBO) - Sri Lanka's stocks closed 0.15 percent higher with Distilleries gaining amid strong foreign buying, brokers said.

The Colombo benchmark All Share Price Index closed 10.05 points higher at 6,918.23, up 0.15percent. The S&P SL20 closed 11.84 points higher at 3,801.87, up 0.31 percent.

Turnover was 1.58 billion rupees, down from 2.24 billion rupees a day earlier with 112 stocks closed positive against 84 negative.

Access Engineering closed 50 cents higher at 27.50 rupees with an off-market transaction of 62.64 million rupees changing hands at 27.50 rupees per share contributing 4 percent of the daily turnover.

The aggregate value of all off-the-floor deals represented only 8 percent of the turnover.

John Keells Holdings closed 80 cents lower at 239.20 rupees with market transactions of 174.03 million rupees contributing 11 percent of the turnover.

JKH’s W0022 warrants closed 1.00 rupee lower at 71.00 rupees and its W0023 warrants closed 2.00 rupees lower at 77.00 rupees.

Central Investments and Finance closed 10 cents lower at 2.50 rupees, attracting most number of trades during the day.

Foreign investors bought 471.37 million rupees worth shares while selling 124.72 million rupees worth shares.

Distilleries closed 5.90 rupees higher at 210.90 rupees, contributing most to the index gain.

DFCC Bank closed 4.30 rupees higher at 175.40 rupees and Lanka Orix Finance closed 20 cents higher at 4.30 rupees.

Ceylon Tobacco Company closed 9.10 rupees lower at 1,150.20 rupees and Lion Brewery Ceylon closed 9.80 rupees lower at 614.00 rupees.