FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com


Join the forum, it's quick and easy

FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com
FINANCIAL CHRONICLE™
Would you like to react to this message? Create an account in a few clicks or log in to continue.

Encyclopedia of Latest news, reviews, discussions and analysis of stock market and investment opportunities in Sri Lanka


Submit PostSubmit Post
ශ්‍රී ලංකා මූල්‍ය වංශකථාව - සිංහල
Submit Post



Latest topics

» Nations Trust Bank- undervalued stock.
by Eranx Today at 8:00 am

» NATIONS TRUST BANK PLC (NTB.N0000)
by Eranx Today at 7:59 am

» GLAS will be winner with Super Gain.
by invest thinker Today at 1:03 am

» පෙබරවාරි මාසේ කොළඹ කොටස් වලට මොකක්ද වුනේ - බැසුවාද ? බැස්සාද ?
by xhunter Today at 12:31 am

» ACL post share split trading and the future potential
by EquityChamp Yesterday at 11:13 pm

» Daily Foreign Transactions
by Pradeep90 Yesterday at 10:11 pm

» DIPD/HAYC/HAYL
by Chathur Yesterday at 9:44 pm

» Sometimes you might find that you have lost all your money in the market by investing in the non profitable stocks in the market.
by Asoka Samarakone Yesterday at 8:34 pm

» Blossom March
by Vishwanarth Yesterday at 7:00 pm

» RICH or TKYO
by RJ1010 Yesterday at 5:43 pm

» TILE / LWL / RCL
by arun.cse Yesterday at 1:39 pm

» TOKYO CEMENT COMPANY (LANKA) PLC
by arun.cse Yesterday at 1:14 pm

» RAIGAM WAYAMBA SALTERNS PLC (RWSL.N0000)
by Rational Investor Yesterday at 11:58 am

» Opportunities after CSE drop
by EquityChamp Yesterday at 11:36 am

» Amana Bank's total assets cross Rs100 bilion with Rs 1billion operating profit
by samaritan Yesterday at 11:25 am

» Pakistan keen to invest in port city: Cabraal
by samaritan Yesterday at 11:16 am

» BROWNS INVESTMENTS PLC (BIL.N0000)
by samaritan Yesterday at 11:02 am

» SANASA DEVELOPMENT BANK PLC (SDB.N0000)
by IDK Yesterday at 9:23 am

» Madura takes the Portfolio Manager 2021 leadership with staggering 3.5bn
by roshan1039 Yesterday at 5:46 am

» Sri Lanka's Debt Dynamics
by sanjeewa88 Sun Feb 28, 2021 7:50 pm

EXPERT CHRONICLE™

ECONOMIC CHRONICLE

GROSS DOMESTIC PRODUCT (GDP)


CHRONICLE™ YouTube

CHRONICLE™ NEWS PRODUCTS

FINANCIAL CHRONICLE™

Views & Reviews, Analysis, Evaluations, Discussions, Gossip and Hot Tips relating to Sri Lankan companies listed on the Colombo Stock Exchange (CSE)
Contribute




DAILY CHRONICLE™

Latest news and articles published in Newspapers, Websites, Blogs and other online news sites relating to business and investments in Sri Lanka
Contribute



ECONOMIC CHRONICLE™

This is a section that provide news, views, analysis, predications relating to Political and Socio-Economic factors and how such activities affect the Stock Market and other economic activity of the Country.

Contribute




EXPERT CHRONICLE™

This is an exclusive section for Expert Articles which will help member to share knowledge through comments and responses of the members. All members are allowed to reply and make comments to these articles.

Contribute


Submit Post


CHRONICLE™ YouTube

Youtube Videos and other visual presentations relating Stock market and other investment advise submitted by members or other contributors.

Contribute


Submit Post


කොළඔ කොටස් වෙළඳපොළේ වංශකථාව
කොළඔ කොටස් වෙළඳපොළේ ලැයිස්තුගත සමාගම් කොටස් ගැන තොරතුරු¸විශ්ලේෂණ¸සාකච්ඡා¸ කටකතා¸රසකතා යන සියල්ල අපේම සිංහලෙන් කතා කළ හැකි ‘කතා මණ්ඩපය’

Contribute

Twitter Feeds
POPULAR COMPANIES
A

ABANS ELECTRICALS PLC

ACCESS ENGINEERING PLC Hot

ACL CABLES PLC

ACL PLASTICS PLC

ACME PRINTING & PACKAGING PLC

AGSTAR PLC

AITKEN SPENCE HOTEL HOLDINGS PLC

AITKEN SPENCE PLC

ANILANA HOTELS AND PROPERTIES PLC

ARPICO INSURANCE PLC

ASIA ASSET FINANCE PLC

ASIA CAPITAL PLC

B

BAIRAHA FARMS PLC

BALANGODA PLANTATIONS PLC

BIMPUTH FINANCE PLC

BLUE DIAMONDS JEWELLERY WORLDWIDE PLC

B P P L HOLDINGS PLC

BROWNS BEACH HOTELS PLC

BROWNS INVESTMENTS PLC

C

CARGO BOAT DEVELOPMENT COMPANY PLC

CENTRAL INDUSTRIES PLC

CEYLON COLD STORES PLC

CEYLON GRAIN ELEVATORS PLC Hot

CEYLON TEA BROKERS PLC

CEYLON TOBACCO COMPANY PLC

CHEVRON LUBRICANTS LANKA PLC

COLOMBO FORT LAND & BUILDING PLC

COMMERCIAL BANK OF CEYLON PLC

CITRUS LEISURE PLC Hot

COMMERCIAL CREDIT AND FINANCE PLC

D

DANKOTUWA PORCELAIN PLC

DFCC BANK PLC

DIALOG AXIATA PLC

DIALOG FINANCE PLC

DIPPED PRODUCTS PLC

DISTILLERIES COMPANY OF SRI LANKA PLC

DUNAMIS CAPITAL PLC

E

EAST WEST PROPERTIES PLC Hot

EASTERN MERCHANTS PLC

EXPOLANKA HOLDINGS PLC

E-CHANNELLING PLC

F

FIRST CAPITAL HOLDINGS PLC

G

GALADARI HOTELS (LANKA) PLC

GUARDIAN CAPITAL PARTNERS PLC

H

HATTON NATIONAL BANK PLC

HAYLEYS PLC

HAYLEYS FABRIC PLC

HAYLEYS FIBRE PLC Hot

HEMAS HOLDINGS PLC

HIKKADUWA BEACH RESORT PLC

HNB ASSURANCE PLC

HVA FOODS PLC

J

JANASHAKTHI INSURANCE COMPANY PLC

JOHN KEELLS HOLDINGS PLC Hot

JOHN KEELLS HOTELS PLC

L

LANKA ASHOK LEYLAND PLC

LANKA IOC PLC

LANKEM CEYLON PLC

LANKEM DEVELOPMENTS PLC

LAUGFS GAS PLC

LAUGFS POWER LIMITED

LOLC FINANCE PLC

LOLC HOLDINGS PLC

LUCKY LANKA MILK PROCESSING COMPANY PLC

M

MELSTACORP PLC

N

NATIONAL DEVELOPMENT BANK PLC

NATION LANKA FINANCE PLC

NESTLE LANKA PLC

O

ORIENT FINANCE PLC

OVERSEAS REALTY (CEYLON) PLC

P

PANASIAN POWER PLC

PEOPLE'S LEASING & FINANCE PLC

PIRAMAL GLASS CEYLON PLC

PRIME FINANCE PLC

R

RAIGAM WAYAMBA SALTERNS PLC

RENUKA AGRI FOODS PLC

RENUKA CAPITAL PLC

RENUKA HOLDINGS PLC

RICHARD PIERIS AND COMPANY PLC

RICHARD PIERIS EXPORTS PLC Hot

ROYAL CERAMICS PLC

S

SAMPATH BANK PLC

SEYLAN BANK PLC

SIERRA CABLES PLC

SINGHE HOSPITALS PLC Hot

SMB LEASING PLC

SOFTLOGIC HOLDINGS PLC

SOFTLOGIC LIFE INSURANCE PLC

SRI LANKA TELECOM PLC

SWISSTEK (CEYLON) PLC Hot

T

TEEJAY LANKA PLC

TESS AGRO PLC

THREE ACRE FARMS PLC

TOKYO CEMENT COMPANY (LANKA) PLC Hot

U

UNION BANK OF COLOMBO PLC

V

VALLIBEL FINANCE PLC

VALLIBEL ONE PLC Hot

VALLIBEL POWER ERATHNA PLC

W

WASKADUWA BEACH RESORT PLC


You are not connected. Please login or register

FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ » Fitch Publishes Sri Lanka's Lion Brewery's 'AA-(lka)' Rating

Fitch Publishes Sri Lanka's Lion Brewery's 'AA-(lka)' Rating

Go down  Message [Page 1 of 1]

Redbulls

Redbulls
Director - Equity Analytics
Director - Equity Analytics
Rates Proposed Debt 'AA-(lka)(EXP)'
Fitch Ratings-Colombo/Singapore-25 March 2013: Fitch Ratings has published Sri Lanka-based Lion Brewery (Ceylon) PLC's (Lion) 'AA-(lka)' National Long-Term Rating with Stable Outlook. Fitch has also assigned a 'AA-(lka)' senior unsecured rating to Lion.

The agency has also assigned an expected National Long-Term rating of 'AA-(lka)(EXP)' to Lion's proposed unsecured redeemable debentures of up to LKR3bn. Fitch will assign a final rating to the debenture subject to the receipt of final transaction documents conforming to information already received.

The proposed debentures are rated in line with Lion's National Long-Term Rating of 'AA-(lka)', as they will rank equally with the company's unsecured creditors. Lion aims to use the proceeds to fund the upgrade and modernisation of its plant in FY14 (ending March).

Key Rating Drivers
Strong market position: Lion's ratings reflect its leading market share of the domestic beer industry and its strong operating cash flow generation. Lion's market position and in turn its credit profile are also supported by its entrenched domestic brands, and limited substitution of its products due to the high technical competence required for brewing beer in contrast to the manufacturing of spirits.

High regulatory risk: Domestic producers of alcoholic beverages face high regulatory risk in the form of high excise duties, which puts legitimate alcoholic beverages outside the reach of a large portion of the population, promoting illicit consumption while stifling the growth of the licit market. At the same time, however, regulatory restrictions on advertising and the limited issuance of new retail licenses create high entry barriers and benefit entrenched players such as Lion. Continued increase in excise duties on alcoholic beverage producers could become a rating risk if profitability is impacted materially over the longer term.

Industry growth below potential: Lion's ratings are constrained over the medium-term by the limited breadth and depth of the domestic beer market, given regulatory impediments on advertising and retailing. However, economic growth and lifestyle changes may result in a shift in domestic consumption patterns towards beer over the longer-term.

Concentrated portfolio: Lion's product portfolio is diverse across price points which enables the company to cater to potential changes in consumer behavior and makes Lion attractive to its distributors. Lion's sales reflect industry trends, and is skewed towards its strong beer product, which is targeted towards the mass-market consumer.

Firmer profits starting FY15: Lion's EBITDAR margin fell to 15% at end-9MFY13 from 28% at FYE12 due to higher taxes paid on imported sales volumes. However, Fitch expects EBITDAR margins to improve after November 2013 as the company will no longer need to import a portion of its sales volumes once the upgrading and modernisation of its plant is complete.

High capex in FY14: Lion spent over LKR2.8bn in capex in 9MFY13 (equal to 24% of revenues) on upgrading and modernising its plant, and will spend a further LKR5.3bn in FY14.

Balance sheet to improve: Fitch expects Lion's financial leverage (measured as lease-adjusted net debt/operating EBTIDAR) to peak in FY14 due to lower profitability and high debt-funded capex. Leverage should improve sharply in FY15 and thereafter on lower capex and higher profits.

Satisfactory liquidity: At end-9MFY13, LKR3bn of Lion's borrowings were short-term in nature, used to fund its working capital. A further 2.8bn consisted of term debt, due after 2013. Fitch expects Lion to post negative free cash flows (FCF, after capex and dividends) until FYE14 on account of higher capex, which will mean the company may be required to refinance any term maturities. However, this is not a serious risk given the company's access to domestic banks, and Fitch's expectations that Lion will generate strong positive FCF from FY15 onwards.

Rating Sensitivities
Negative: Future developments that may individually, or collectively, lead to negative rating action include:
-Financial leverage above 1.5x on a sustained basis. Financial leverage stood at an annualised 1.09x at end-9MFY13.

Positive: Future developments that may individually or collectively lead to a positive rating action include:
-Lion's rating is constrained at the current level over the medium-term due to the limited breadth and depth of the domestic beer industry.

However this may change over the longer-term if growth in domestic beer industry outpaces growth in spirits.

A full rating report on Lion will be shortly available on www.fitchratings.com and www.fitchratings.lk.

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics
LION seems to have fallen on to CARG league for trading at a premium to market.

sriranga

sriranga
Co-Admin
Sri Lanka's Lion Brewery will sell 3.0 billion rupees in unsecured debt with the firm expected to spend 5.0 billion rupees to upgrade plant over the coming year, Fitch Ratings said.
In the current financial year it had spent 2.8 billion rupees.

Fitch had given a 'AA-(lka)' expected rating to the debenture, ahead of final documentation. Lion Brewery itself has been given a 'AA-(lka)' rating with a stable outlook.

Lion had a strong market position with the largest share of the domestic beer market giving strong cashflows.

Producers in the industry faced high regulatory risk in the form of high excise duties which put legal products out of reach of the population, Fitch said. But entry barriers and advertising restrictions helped older producers like Lion.

The full statement is reproduced below

Fitch Publishes Sri Lanka's Lion Brewery's 'AA-(lka)' Rating; Rates Proposed Debt 'AA-(lka)(EXP)'

Fitch Ratings-Colombo/Singapore-25 March 2013: Fitch Ratings has published Sri Lanka-based Lion Brewery (Ceylon) PLC's (Lion) 'AA-(lka)' National Long-Term Rating with Stable Outlook. Fitch has also assigned a 'AA-(lka)' senior unsecured rating to Lion.

The agency has also assigned an expected National Long-Term rating of 'AA-(lka)(EXP)' to Lion's proposed unsecured redeemable debentures of up to LKR3bn. Fitch will assign a final rating to the debenture subject to the receipt of final transaction documents conforming to information already received.

The proposed debentures are rated in line with Lion's National Long-Term Rating of 'AA-(lka)', as they will rank equally with the company's unsecured creditors. Lion aims to use the proceeds to fund the upgrade and modernisation of its plant in FY14 (ending March).

Key Rating Drivers

Strong market position: Lion's ratings reflect its leading market share of the domestic beer industry and its strong operating cash flow generation. Lion's market position and in turn its credit profile are also supported by its entrenched domestic brands, and limited substitution of its products due to the high technical competence required for brewing beer in contrast to the manufacturing of spirits.

High regulatory risk: Domestic producers of alcoholic beverages face high regulatory risk in the form of high excise duties, which puts legitimate alcoholic beverages outside the reach of a large portion of the population, promoting illicit consumption while stifling the growth of the licit market. At the same time, however, regulatory restrictions on advertising and the limited issuance of new retail licenses create high entry barriers and benefit entrenched players such as Lion. Continued increase in excise duties on alcoholic beverage producers could become a rating risk if profitability is impacted materially over the longer term.

Industry growth below potential: Lion's ratings are constrained over the medium-term by the limited breadth and depth of the domestic beer market, given regulatory impediments on advertising and retailing. However, economic growth and lifestyle changes may result in a shift in domestic consumption patterns towards beer over the longer-term.

Concentrated portfolio: Lion's product portfolio is diverse across price points which enables the company to cater to potential changes in consumer behavior and makes Lion attractive to its distributors. Lion's sales reflect industry trends, and is skewed towards its strong beer product, which is targeted towards the mass-market consumer.

Firmer profits starting FY15: Lion's EBITDAR margin fell to 15% at end-9MFY13 from 28% at FYE12 due to higher taxes paid on imported sales volumes. However, Fitch expects EBITDAR margins to improve after November 2013 as the company will no longer need to import a portion of its sales volumes once the upgrading and modernisation of its plant is complete.

High capex in FY14: Lion spent over LKR2.8bn in capex in 9MFY13 (equal to 24% of revenues) on upgrading and modernising its plant, and will spend a further LKR5.3bn in FY14.

Balance sheet to improve: Fitch expects Lion's financial leverage (measured as lease-adjusted net debt/operating EBTIDAR) to peak in FY14 due to lower profitability and high debt-funded capex. Leverage should improve sharply in FY15 and thereafter on lower capex and higher profits.

Satisfactory liquidity: At end-9MFY13, LKR3bn of Lion's borrowings were short-term in nature, used to fund its working capital. A further 2.8bn consisted of term debt, due after 2013. Fitch expects Lion to post negative free cash flows (FCF, after capex and dividends) until FYE14 on account of higher capex, which will mean the company may be required to refinance any term maturities. However, this is not a serious risk given the company's access to domestic banks, and Fitch's expectations that Lion will generate strong positive FCF from FY15 onwards.

Rating Sensitivities

Negative: Future developments that may individually, or collectively, lead to negative rating action include:

-Financial leverage above 1.5x on a sustained basis. Financial leverage stood at an annualised 1.09x at end-9MFY13.

Positive: Future developments that may individually or collectively lead to a positive rating action include:

-Lion's rating is constrained at the current level over the medium-term due to the limited breadth and depth of the domestic beer industry. However this may change over the longer-term if growth in domestic beer industry outpaces growth in spirits.

http://www.lbo.lk/news/Sri_Lanka_Lion_Brewery_to_sell_Rs3.0bn_in_debt_to_finance_capex/150493667

http://sharemarket-srilanka.blogspot.co.uk/

salt

salt
Vice President - Equity Analytics
Vice President - Equity Analytics
how much they are going to raise?
what rate they would offer?

Gaudente


Senior Equity Analytic
Senior Equity Analytic
any news on when the application opens and the coupon rates offered ?

Sponsored content


Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum