14-Nov-2013 Interim Financial Statements 30-09-2013

BAIRAHA FARMS, ABANS FINANCE, SERENDIB LAND , NATION LANKA FINANCE , BROWNS BEACH HOTELS, AITKEN SPENCE , COLOMBO LAND & DEVELOPMENT COMPANY, SINGER INDUSTRIES (CEYLON), REGNIS(LANKA) , CITY HOUSING & REAL ESTATE CO. LEE HEDGES, HAPUGASTENNE PLANTATIONS, UDAPUSSELLAWA PLANTATIONS, CEYLON HOSPITALS, DOLPHIN HOTELS, HOTEL SIGIRIYA , ENTRUST SECURITIES, ELPITIYA PLANTATIONS, SMB LEASING, TAPROBANE HOLDINGS, ASIA CAPITAL , CAPITAL ALLIANCE FINANCE, ASIA ASSET FINANCE , DFCC VARDHANA BANK , CARSON CUMBERBATCH , THE BUKIT DARAH, THE INDO MALAY, THE GOOD HOPE , SELINSING, SHALIMAR (MALAY), COMMERCIAL CREDIT AND FINANCE , BROWN & COMPANY, BROWNS INVESTMENTS, COLOMBO DOCKYARD , LANKA CENTURY INVESTMENTS, BLUE DIAMONDS JEWELLERY WORLDWIDE , NATIONAL DEVELOPMENT BANK, KAHAWATTE PLANTATIONS , CONVENIENCE FOODS (LANKA ), BANK OF CEYLON, TESS AGRO, CIC HOLDINGS, AITKEN SPENCE HOTEL HOLDINGS, AITKEN SPENCE PLANTATION MANAGEMENTS , CEYLON TEA SERVICES , AMANA TAKAFUL, SINGER FINANCE (LANKA) , SINGER SRI LANKA, LANKEM CEYLON , E B CREASY & COMPANY , THE COLOMBO FORT LAND & BUILDING , KOTAGALA PLANTATIONS, C M HOLDINGS , THE LION BREWERY CEYLON , CEYLON BEVERAGE HOLDINGS, CEYLON GUARDIAN INVESTMENT TRUST , GUARDIAN CAPITAL PARTNERS , PEGASUS HOTELS OF CEYLON , EQUITY TWO , EQUITY ONE , CEYLON INVESTMENT , SIERRA CABLES , UNITED MOTORS LANKA , VALLIBEL ONE, HEMAS POWER, SERENDIB HOTELS, EXPOLANKA HOLDINGS, N D B CAPITAL HOLDINGS

Interim Financial Statements for the period ended 30-09-2013 have been uploaded on the CSE website.

Amidst an industry climate characterised by stiff competition, National Development Bank PLC (NDB) recorded a profit after tax of Rs.7.6 billion for the nine months ended 30 September 2013, a 229% growth compared to the comparative nine months in 2012. This outcome was a combination of a healthy net interest income and a significant net equity income.

The bank was able to achieve Net Interest Income of Rs.5.2 billion, which was a commendable 27% growth, despite the low interest regime. The NII achievement was also challenged by the relative stagnant credit growth prevalent in the industry.

The net fee and commission income of Rs.1.1 billion was another positive contributor to the bank’s Profit after Tax, with a 38% increase over the previous year. This reiterates the bank’s solid focus on fee based income, by leveraging the wide array of banking products and services NDB offers to its clientele.

NDB also extensively made use of the cross selling opportunities available via its group companies to achieve sound fee-based income levels. Net gains from trading and forex income declined by 18% compared to the corresponding period last year, due to the marked depreciation of the Sri Lankan rupee in the first half of 2012, which led to the revaluation of the balance sheet.

The significant increase in other operating income was primarily due to the capital gain of approximately Rs.5.4 billion made on the strategic divestment of AVIVA NDB Insurance PLC in December 2012.
Efficient cost management

Cost management remains a key strategic focus at NDB. The bank has been able to restrict its cost growth to 18% for the third consecutive quarter, despite opening nine new branches during the 12 months ended September 2013. The bank’s continuous effective cost saving and monitoring strategies resulted in the bank’s cost-to-income ratio being maintained at the same levels as of the prior period.

The strength of the NDB Group was reflected in the profits attributable to ordinary shareholders increasing by 10% over the last year’s comparative period, to Rs. 2.2 billion. The top contributor to the group’s enhanced performance was the capital and the investment banking cluster.

The NDB Group has a strong footprint in financial services including areas such as wealth management, investment banking and securities management through its subsidiaries.

Total assets of the bank rose to Rs. 183 billion, a noteworthy 12% increase over the nine month period. Loans and advances grew by 6%, amidst the low credit growth environment.

NDB continues to support the national economic revival, harnessing the benefits of its strong capital base and maintaining considerable focus on SMEs, micro financing, project loans and export oriented businesses.
Growing customer deposits

The bank’s customer deposit base achieved the same trajectory as assets, recording a 10% satisfactory growth to Rs. 119 billion compared to December 2012.

Benefiting from a robust risk management framework together with rigorous recovery processes adopted by the bank, NDB recorded an NPL ratio of 1.94% (gross), well below the industry average of 5.2%.

The bank’s Tier I capital at 14.2% reflected a noteworthy increase compared to December 2012 which was 11.2%. The Tier I & II capital stands at 15.2%. A strong capital base is a clear indicator of the bank’s resilience to any shocks or losses that it may encounter and the capability to expand its operations and leverage on opportunities arising in the economy.

NDB’s ROE was 46.6% compared to 21.2% for the year ended 31 December 2012. The bank’s EPS and ROA for the nine months ended 30 September 2013 are Rs. 49.70 and 4.7% respectively. When adjusted for the exceptional capital gain, the bank’s ROE and ROA were 16.70% and 1.60% respectively.

Customer-centric focus
NDB Chairman Hemaka Amarasuriya reflecting on the nine months ended 30 September 2013, emphasised that the bank places the customer at the centre of its key strategies and excellence in customer service is constantly pursued. Staying committed to this objective, NDB extended service levels to ‘9 a.m. – 6 p.m. Full Service Banking’ from September 2013 bringing in an absolute form of convenience for both personal and business customers alike.

NDB’s newly appointed CEO Rajendra Theagarajah stated that the bank is well positioned to exploit the opportunities arising in the economic renaissance of Sri Lanka. The bank strategically and methodically approaches new prospects that arise with the rapidly awakening economic activities in many areas of the country. Three new branches were opened during the 3rd quarter, bringing the total number of branches up to 76.

The bank is well poised for the remainder of the year, to sustain its performance and deliver a balanced outcome to all its stakeholder groups.
http://www.ft.lk/2013/11/15/ndb-ups-nine-month-pat-by-229-to-rs-7-6-b/

Union Assurance PLC (UA), a leading player in the Sri Lankan insurance sector, maintained its growth momentum in both turnover and profits for the nine months ended 30 September 2013. UA reported a 10% growth in combined gross written premiums and 31% growth in profit after tax compared to the same period of the previous year.

The combined Gross Written Premium (GWP) increased by Rs. 697 million to Rs. 7.7 billion in the 3rd quarter 2013 from Rs. 7 billion in the corresponding period. Non-life insurance GWP recorded a growth of 14% from Rs. 3.3 billion in 2012 to Rs. 3.8 billion in 2013, which was above the industry average for the period. Both corporate and retail customer segments and all classes of non life insurance business reported year on year growth. The life insurance segment contributed Rs. 4 billion to the combined GWP with a growth rate of 6%.

Total net revenue for the period increased to Rs. 8.7 billion (2012 – Rs. 7.9 billion), a 10% growth compared to the same period of 2012. Profit before tax amounted to Rs. 328 million, a 22% increase compared to the same period in 2012.

Profit after tax increased by 31% to Rs. 291 million from Rs. 222 million in the first nine months of 2012, excluding the surplus from life insurance business which is determined after an actuarial valuation at the end of the year.

As at 30 September 2013, UA’s life fund (including the unit linked fund), which is one of the largest life
funds in the Industry stood at Rs. 18.7 billion with a healthy solvency ratio indicating the financial strength of the life business.

UA was most recently recognised as the ‘Best Service Brand’ at the SLIM Brand Excellence Awards 2013, being awarded Silver in the ‘Service Brand of the Year’ category. The company was also recognised as a ‘Great Place to Work’ by the Great Place to Work Institute, celebrating UA’s many initiatives to ensure employee engagement, satisfaction and welfare.

The Union Assurance brand is positioned on the promise of “trust” and strives to deliver this promise by being transparent, convenient and respectful when dealing with all stakeholders.
http://www.ft.lk/2013/11/15/union-assurance-continues-growth-momentum-in-2013-3q/

Expolanka Holdings PLC posted revenue of Rs. 14.9 billion for the second quarter in the financial year 2013/14 in comparison to Rs. 12.6 billion for the corresponding period in 2012/2013, resulting in an 18% growth.

The group recorded a Net Profit after Tax (NPAT) of Rs. 402 million while the Net Profit attributable to the equity holders of the its parent reached Rs. 342 million in comparison to Rs. 289 million recorded during the corresponding period last year.

Expolanka Holdings PLC Group CEO Hanif Yusoof said: “The results of the second quarter of the financial year reflect a strong performance from new markets in the freight sector despite the slowdown in activity in the Indian subcontinent. This has enabled the group to record a profit growth despite volatile market conditions. Our focus is to concentrate on growth markets in freight and consolidate existing businesses in other sectors.”

Positive results despite lower growth than expected
The group’s core sector, freight and logistics, recorded a healthy revenue and profit growth in comparison to corresponding period last year. The increase in profit was driven by growth in trade volumes and revenue generated from new ventures in Hong Kong, China and USA. These new stations continue to provide positive results despite lower than expected growth from core markets.

The travel and leisure sector recorded a significant growth in revenue at Rs. 1,313 million from Rs. 823 million recorded in the corresponding period last year. However, profits declined from Rs. 77 million to Rs. 61 million partially due to the cost escalation in the growing markets. Further challenges in margin management in a competitive outbound businesses depressed profits. Nonetheless this sector has been showing positive signs during the quarter under review where it has recorded Rs. 40 million profits in comparison to Rs. 21 million in the first quarter of the current financial year.

Positive trading and manufacturing performance
The group’s international trading and manufacturing sector revenue reached Rs. 8.3 billion from Rs. 6.0 billion recorded during the corresponding period last year. This was as a result of increased exports of perishables, tea and commodity products.

The sector faced challenges in managing margins as a result of fluctuations in commodity prices. The sector profit for the first six month period came in flat at Rs. 86 million compared to Rs. 83 million for the corresponding period last year.

“The decision to exit from Expolanka Commodities and Lanka Premier Foods, both having high volatility to earnings was a result of our strategic portfolio review. The divestment would enable the group to free up capital and reduce its exposure to high volatility in earnings in the sector.

“This strategic move will enable us to focus on the core businesses. We will continue to take initiatives to improve group profitability and focus on consolidation of existing businesses to improve efficiency,” Yusoof added.
http://www.ft.lk/2013/11/15/expolanka-holdings-posts-rs-402-m-npat-in-2q/

Aitken Spence financial performance for the first six months has been negatively impacted by its power sector whilst the other key sectors, tourism, and maritime and logistics have performed positively. Aitken Spence posted a pre-tax profit of Rs. 1.88 bn for six months ended 30 September 2013, a decrease of 9.2 per cent from the corresponding period last year.

The blue-chip's half-year results released to the Colombo Stock Exchange show a fall of 19.8 per cent in group revenue to Rs. 14.9 bn. Profit attributable to shareholders declined by 10.6 per cent to Rs. 1.2 bn while earnings per share decreased by 10.6 per cent to Rs. 3.05, over the corresponding period.

Revenue from its tourism sector, comprising travels and hotels in Sri Lanka, Maldives, India and Oman was up by 6.7 per cent to Rs.6.3bn for the six months, whilst the sector's pre-tax profits surged by 26 per cent to Rs. 1.2 bn.

Maritime and Logistics sector saw its revenue increase by 12.3 per cent to Rs. 3.2 bn and pre-tax profits rose by 11.6 per cent to Rs. 343 mn. Aitken Spence is Sri Lanka's largest player in logistics with interests in the whole gamut of logistics operations, as well port management operations in Africa and the South Pacific. The contribution from the recently acquired subsidiary Ports Terminal Ltd Fiji, which is also managed by the Group boosted the profits of the sector.

The printing and garment manufacturing sectors also showed strong growth during the period under review.

The Aitken Spence power plants in Matara and Horana were not operational during the reporting period consequent to the cessation of the Power Purchase Agreements, while the power plant in Embilipitiya remained operational with curtailed generation.

- See more at: http://www.dailynews.lk/business/aitken-spence-posts-rs-12-bn-profits-6-months#sthash.Rk9M9xwD.dpuf

Oh Carson group.. Ouch. (Again)

Impressive.

It good to buy this condition...Is't it?

UKboy wrote:Oh Carson group.. Ouch. (Again)

Heavy loss on foreign exchange. It's a ridiculous figure.

Monster wrote:

UKboy wrote:Oh Carson group.. Ouch. (Again)

Heavy loss on foreign exchange. It's a ridiculous figure.

This is a non cash book loss due to mainly the indonesian rupiah depreciating about 15 % from 10,000 rupiah to 1 usd on 30th june to 11500 rupiah to 1 usd on 30th sep. (mainly due to tapering concerns).
it is not an actual loss, but only due to translation of usd debt to functional currency indonesian rupiah and restating it in sri lankan rupees.  
as all palm oil contracts are u.s. dollar denominated in indonesia, an actual loss in repaying dollar debt does not arise.  
actually, a weakening rupiah against the dollar, like what has happened, is really good news for them as their local value add (wages, fertilizer) are in rupiah and do not automatically adjust to this devaluation immediately (lagged effect later maybe due to inflation).

another way to look at it, if the sri lankan rupee went down to Rs 150 to a dollar, would it be good news or bad news to an exporting company selling only in dollars (or booking to dollar adjusted rupee contracts) operating in sri lanka, expensing all mainly local input costs in rupees ? (even though they had dollar debt).
now say this sri lankan company is a subsidiary of a singapore company. when the singapore company reports the accounts in singapore, they will translate this rupee devaluation into the dollar debt and consider that a forex loss although it is only notional and non cash.

Accounting rules for currencies are most complex for multinationals. for Goodhope Asia, although their nominal currency is the dollar, their functional currencies include rupiah, ringitt & indian rupee. then all this is translated (translation currency) to sri lankan rupee ! volatility amongst these currencies, like what happened in the 2nd quarter, can sometimes skew real operating results.

Anticipating strong medium term growth prospects, Singer Sri Lanka, the country’s leading consumer durables retailer continued to make infrastructure improvements during the 2013 financial year.

For example, the company carried out renovations and expansions of its existing retail network and added new shops. Singer Sri Lanka already has the country’s most extensive retail network, with nearly 400 outlets island-wide.

Difficult business conditions
However, difficult business conditions continued to impact the company’s bottom line. While collecting receivables posed certain difficulties, the Singer Group still performed better than the rest of the industry in this operational area, due to its outstanding culture, use of a state-of-the-art ERP system and call centre service, as well as SMS reminders, together with more traditional collection drives.

Although the Singer Group’s gross sales revenue increased during the first three quarters of the financial year, the application of the Value Added Tax regime to the retail sector resulted in net revenue decreasing by 1%. However, Singer Sri Lanka’s communications segment continued to impress, with revenue increasing by a staggering 130%.

While revenues dipped marginally, expenses increased due to inflation and high electricity tariffs and finance costs increased by 55%, due mainly to the higher level of interest rates. The combination of these factors led to a fall in profits of 54% and 64% for the Group and Company, respectively.

Business opportunities
The company’s retail strength, however, allows it to transform economic challenges into business opportunities. For example, retail space has become more affordable, while new brands and agencies have become available to Singer, setting the stage for continued expansion. In the third quarter of the current financial year, it launched the cutting-edge Huawei Ascend P6 smartphone to widespread demand.

The company also continues to strengthen its relationships with customers, introducing an integrated customer loyalty program that further enhances Singer’s value proposition. Together with the country’s most extensive retail network, the industry’s most widespread service network, and the largest offering of world-class brands, Singer Sri Lanka continues to set the standard for ‘trusted excellence’ in Sri Lankan retail.
http://www.ft.lk/2013/11/18/singer-optimistic-about-the-future-despite-dip-in-profits/

Nov 18, 2013 (LBO) - Sri Lanka's Lion Brewery Ceylon Plc, the largest brewer in the country said profits fell 18 percent to 258 million rupees in the September 2013 quarter from a year earlier, amid cost rises and a tax hike.

"Higher excise duty and cost increases in other operational areas contributed to this decline in profitability," the firm told shareholders in a quarterly review.

Excise duty was last raise in October 2012.

The firm reported earnings of 3.23 rupees per share. For the six months to September the firm reported earnings of 6.83 rupees per share on total profits of 546 million rupees, down 13 percent from a year earlier.

Lion Brewery said revenues rose 19 percent to 6.3 billion rupees, cost of sales rose at a faster 22 percent to 5.0 billion rupees and gross profits rose 9 percent to 1.36 billion rupees.

But net finance costs rose to 42 million rupees from a 60 million rupee income a year earlier.
http://www.lankabusinessonline.com/news/sri-lankas-lion-brewery-net-down-18-pct/299412435