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Asia Capital’s AAI exit primary due to new insurance regulations: Chairman
http://www.sundaytimes.lk/110918/BusinessTimes/bt032.html
Asia Capital’s AAI exit primary due to new insurance regulations: Chairman
By Jagdish Hathiramani
The primary reason behind Asia Capital’s recent exit from its former insurance subsidiary, Asian Alliance Insurance, which was sold to Ashok Pathirage’s Softlogic Group for Rs. 3.3 billion, was because industry regulators brought in a ruling that only 5% of an insurance fund could be invested, according to the Asia Capital Chairman Manohan Nanayakkara. Further elaborating, he noted that this move by the country’s regulators restricted his ability to use the investment fund and thus made insurance unviable for the company, and also opined that buying over control must be one of the fundamentals of investing.
He also suggested that the recent sell-off of a 40% stake in tea broking company Asia Siyaka was due to the company’s investment having matured, and suggested that it was his preference to return the money to the investors to be used in other ventures. He further revealed that,10 years ago, Asia Capital had invested just Rs.10 million in this stake and the same stake was recently sold at Rs. 185 million.
Mr. Nanayakkara also predicted that hire purchase subsidiary Asia Asset Finance would continue to grow since their loan books showed “impressive” growth and their collection rates were “terrific,” and revealed that they were considering taking that company public in the next month or two and they were, right now, just finalising the paperwork. He also added that this would, in all likelihood, become Asia Capital’s principal subsidiary.
At the same time, he signalled that his leisure subsidiary, Asia Leisure, planned to add two new beach properties, one in Wadduwa and the other in Balapitiya, over the next seven to eight months, which will add about 50 more rooms to the company’s existing portfolio of hotels, which presently encompassed boutique hotel properties in Nuwara Eliya, Colombo, Balapitiya and Galle.
He also revealed a US$ 25,000 investment in a small, local independent film last year had earned his production company many worldwide artistic accolades, he signalled that his company would continue to make a few more low cost, low budget films backing youthful directors with new ideas trying to deal with contemporary realities. He also noted that an ongoing project in this area was a film, titled “A common man,” with famed actor Ben Kingsley, which he said had a great script as well as being topical, it being about terrorism. Also, it was written and directed by veteran local film personality Chandran Rutnam, with whom his company had virtually an exclusive contract.
Additionally, he noted that there was also a Tamil-dubbed version of “Road to Elephant Pass,” now re-named “Yal,” which had already been privately screened. The release of this film was planned for Sri Lanka and South India, with a further intention that it also be internationally released as well.
Mr. Nanayakkara also brought up his digitally delivered movie content venture which he said would allow the local industry to get away from the costliness, as well as other restrictions, inherent in using celluloid-based film. A scenario which he said, depending on the size of the release, allows 40% to 50% to be knocked off from the cost of the film. Plans to roll out this distribution across 152 local cinemas had been previously reported in the Business Times.
Further, he also noted that Sid Sheinberg and Paul Mason, two well known Hollywood producers, as well as Gemini Studios, one of the largest studios in India, based in Tamil Nadu, were already involved with Asia Capital’s digital efforts, and added that the local cinema industry was one area in which the formal economy had never invested in, and that his company was approaching it as a serious business.
However, he also added that this venture was not just being approached as making movies, but, instead, as technology adaption. Elaborating, he indicated that the plan was to provide digital projectors to movie theatres and establish a digital distribution system through which Asia Digital Entertainment could feed Hollywood, Tamil, Hindi and Sinhala films into the local industry which the company would also co-produce. He further remarked that this would be a fairly large effort for the company and would take a lot of their time over the next year-and-a-half. Previous media reports have also pointed to an US$ 2.5 million investment in Asia Digital Entertainment so far.
Commenting on the aggressive growth achieved in the recent past by Asia Capital, Mr. Nanayakkara noted that the reason he put together a group of investors in 2009 to buy Asia Securities, previously a long standing local stock broker, was because, historically, during any period of peace, the local stock market had boomed. He also added that, since the end of the war, Sri Lanka has also experienced a fairly long period of low interest rates and that, while the rates were higher now, he was still happy with where they are now as the whole credit industry is booming.
Mr. Nanayakkara also suggested that it was time to change the character of his company from being a financial conglomerate to being a conglomerate. And also revealed that Asia Capital planned to stay a venture company, and still continue look for under-performers in the local stock market to acquire. Additionally, he added that he would take Asia Leisure and Asia Digital Entertainment public when both had reached the appropriate size.
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Asia Capital Chief on Times Online
Speaking to the Times Online via Skype from Brisbane, Australia, Chairman of Asia Capital PLC, Manohan Nanayakara, outlines the journey of his company to date and also comments on the reasons for the dramatic turnaround it has experienced following the end of three decades-long local conflict.
Cargills 1Q12 group revenue, PAT up
http://www.sundaytimes.lk/110821/BusinessTimes/bt10.html
Sri Lankan food and retail conglomerate Cargills recently reported a group revenue of Rs. 11.2 billion, up 25% year-on-year, and a profit after tax (PAT) of Rs. 330 million, a 6% year-on-year increase, for the three months to end-June 2011, the first quarter (Q1) of its 2011/2012. This was also said to include a “pre-operating cost of approximately Rs. 100 million excluding the interest cost incurred to fund new investments during the last two quarters of the previous financial year.”
Additionally, according to Managing Director Abdul Wahid, the company revealed that it had “now fully revamped its biscuit facility and re-engineered the product range which would be launched during the upcoming quarter.”
Further noted by Mr. Wahid, “‘Cargills Food City’, Sri Lanka’s No 1 modern retail chain continued to maintain a steady growth in transactions and volume while consolidating its position in the industry with the opening of its 4th outlet in the Northern region in Kilinochchi, taking the total number of stores to 164. The retail sector invested Rs. 250 million to increase it’s modern trade footprint during the quarter.”
He also added that “FMCG brands comprising, Magic, Kist, Finest, Sams, Goldi and newly acquired Kotmale , reported volume growth in excess of 20%… Millers Brewery Limited, the new investment, commenced limited production during the 1st quarter and market acceptance of the renowned ‘3 Coins’ brand indicates a promising off take. Aggressive expansion has been planned for the brewery.”
In addition, capital expenditure in terms of additions of property, plant and equipment for Q1 2011/2012 was shown to have more than doubled, to Rs. 491 million, compared to the corresponding period the year before. While a segmental analysis highlighted the fact that revenues in food and beverages, wholesale distribution and leisure businesses all grew year-on-year by 25%, 12% and 7%, respectively, with photo processing being the only segment to fall, by 29% year-on-year. At the same time, segment related profitability dropped for all businesses except the food and beverages unit which witnessed of 25% year-on-year growth in the “Segmental profit before unallocated overheads” line item.
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JKH 2011/2012 Q1 group revenue at Rs. 15.69 bln, up 21% YoY
http://www.sundaytimes.lk/110731/BusinessTimes/bt34.html
Sri Lanka’s top corporate John Keells Holdings has released interim earnings for the three months to end-June 2011 which has shown group revenue to be Rs. 15.69 billion, a 21% year-on-year (YoY) increase, while profit before tax (PBT) was Rs. 1.88 billion, up 23% YoY, and profit attributable to equity holders was Rs. 1.37 billion, a 35% YoY rise.
According to comments in the interim report by group Chairman Susantha Ratnayake, the transportation group PBT was Rs. 742 million, down 7% YoY, attributed to a stronger Sri Lanka rupee. He also noted that leisure group PBT was Rs. 374 million, up from a loss of Rs. 14 million in the same quarter of the previous year, a result of strong showings by city hotels and the rebounding of Maldivian properties.
Further indicated, the group’s property arm “recorded a PBT of Rs. 85 milion for the quarter, a decrease of 41% over the corresponding period last year [2010/11 Q1: Rs. 145 million].” An outcome which Mr. Ratnayake said was due to the cyclical nature of revenue recognition of the local property market.
He also signalled a “Consumer Foods and Retail PBT of Rs. 207 million for the quarter was an increase of 22% over the first quarter last year [2010/11 Q1: Rs. 169 million], primarily due to volume increases in the ice creams and soft drinks businesses.” And that “Financial Services PBT of Rs. 422 million for the quarter is a 12% increase over the same period last year [2010/11 Q1: Rs. 377 million], mainly as a result of a significantly better performance by the banking associate Nations Trust Bank.”
In addition, he noted that the “Information Technology Group recorded a loss of Rs. 20 million for the three months, compared to the performance over the same period last year [2010/11 Q1: Rs. 0.8 million] due to costs associated with the transition of the BPO business to a new facility.” While; “Other comprising of Plantation Services, John Keells Capital and the Corporate Centre recorded a PBT of Rs. 74 million for the three month period, an increase of 43% when compared to the corresponding period last year [2010/11 Q4: Rs. 52 million].”
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Most members are senior managers – New CIM SL Chairperson
http://www.sundaytimes.lk/110327/BusinessTimes/bt13.html
Most members are senior managers – New CIM SL Chairperson
Institute is 100 years old
By Jagdish Hathiramani
Most of Sri Lanka’s Chartered Institute of Marketing (CIM) members hold senior managerial positions in local private and public sector organisations, according to its Chairperson Chitrangani Herat Gunaratne.
Elected at the end of 2010, Ms. Herat Gunaratne, who is also Vice President at local marketing research firm Quantum, added that the CIM committee planned to "showcase these members and invite them to share their knowledge and experience with others."
Further, she noted that added visibility for CIM in Sri Lanka was also a 2011 goal. With a Sri Lankan chapter that started operations 15 years ago, CIM this year celebrates its centenary (100 years) and, as such, the local office is planning a full-year calendar of events beginning this May, including a two-day international conference towards the latter half of 2011 in addition to an awards programme.
Presently having 3,000 students and 1,500 members, with many more part qualified, the Sri Lankan arm of CIM is also its regional office overseeing India, Pakistan, Bangladesh, Nepal and the Maldives, and from this base of operations CIM has already started adding members from Bangladesh and the Maldives.
Additionally, and in line with media reports that ‘aggressive’ moves are afoot by CIM Sri Lanka to promote itself in provincial towns, Ms. Herat Gunaratne revealed that the organisation had decided to extend its seven existing study centres, mostly in Colombo, with new venues in "Matara and Galle as we are already established in Kandy and Jaffna."
"Going forward we will also look at the east. With so much development happening in these areas we too should look at moving there to offer convenience to our students," said Ms. Herat Gunaratne. While it also emerged that "discussions with the ministry [to] promote CIM at all universities" were also progressing as it was suggested that many signing up for this qualification were university students, such as from engineering faculties, etc.
Meanwhile, Ms. Herat Gunaratne also indicated that an existing programme aimed at helping key industries, CIM Sri Lanka’s Marketing Interest Groups (MIG), would also be widened even further. Elaborating, she said "one area that we are looking at is research. This is of paramount interest to marketers and we should [share] some common knowledge with them. We also have had discussions with our apparel graduates who are keen on having a MIG. It definitely makes sense [considering] that garments are such a large revenue earner for our country." Currently, CIM has MIG teams working with the leisure, tea, financial services, agriculture and retail sectors.
At the same time, Ms. Herat Gunaratne noted that CIM students paid up to Rs. 350,000.00 to become fully qualified, while annual membership for CIM qualified members was British Pounds Sterling 120 (approx. Rs. 21,700).
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Renuka posts 3Q10/11 consolidated revenue jump of 150% YoY
http://www.sundaytimes.lk/110220/BusinessTimes/bt40.html
Sri Lanka’s Renuka Holdings has posted 150% and 85% year-on-year increases in consolidated revenue for the three months and nine months to end-December 2010 respectively, with the former growing to Rs. 1.16 billion and the latter to Rs. 2.26 billion.
However, revenue gains were offset by even greater rises in consolidated cost of goods numbers for both periods, to the tune of 246% and 112%, respectively. This resulted in consolidated gross profit for the three months to end-December 2010 dropping year-on-year by 26% to Rs. 121.77 million, with the same line item gained year-on-year by 30% to Rs. 513.12 million for the nine months to end-December 2010, the group said.
It showed a loss after tax for the three months to end-December 2010 of Rs.32.84 million, a fall of 79% from the year before. Additionally, there was a consolidated profit after tax for the nine months to end-December 2010 of Rs. 649.29 million, an increase of 61% year-on-year.
Also, profitability for the three months to end-December 2010 was negatively impacted by year-on-year decreases in the ‘other income’ (51%) and ‘mark-to-mark value adjustment’ (179%) line items in the income statement. However, profits for both of these line items in fact increased by 73% and 51% year-on-year, respectively, over the course of the nine months to end-December 2010.
Financials also revealed that, segment-wise, profits for the nine months to end-December 2010 were largely due to investment and services while a smaller portion came from Renuka’s agri-business unit. According to the group’s chairperson, Indumathi Renuka Rajiyah, who was quoted in the financials; "Company profit after tax grew to Rs. 347.7 million compared to Rs. 236.1 million in the corresponding nine months of last year while group profit after tax was Rs. 649.2 million.”
Ms. Rajiya also revealed the group "continued taking advantage of market opportunities, investing in listed shares, investing in unquoted equity positions and debt instruments. Its total investment portfolio was Rs. 1.3 billion of which 42% was classified as short term investments and 58% as long term investments." Financials also showed share acquisitions to the tune of Rs.156.32 million.
She also added that its "investment portfolio also consists of Biological assets and in this regard the group continued planting teak and mahogany." And concluded by suggesting that one of two projects the group had previously slated for property development and leisure had passed through its project feasibility study phase and was going ahead utilising a "mixed" development concept, all that was pending was a finalised project time line. Meanwhile, financials also indicated property investments of Rs. 214.23 million. Additionally, according to prior media reports, the group already has 1.6 acres in Colombo and 23 acres in the North and East.
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Hemas reports 85% 1H11 earnings growth
http://www.sundaytimes.lk/101114/BusinessTimes/bt22.html
Diversified Sri Lankan conglomerate Hemas Holdings this week reported Rs. 588 million in consolidated earnings for the first half of its latest financial year, a period ending September 30. This was indicated to be a growth of 85% over the corresponding period in 2009.
While consolidated group revenues were indicated as Rs. 8.7 billion, a growth of 18% over the previous year. This is a performance “mainly driven by growth of our Healthcare and Power businesses”, according to its Chief Executive Husein Esufally.
Also revealed was healthcare turnover topped Rs. 3.1 billion, a 30% year-on-year growth, with earnings also virtually doubling to Rs. 122 million.
This was mainly the result of pharmaceuticals. However, it was also noted that, along with winter hotel volumes, hospitals would drive continued growth expectations over the rest of 2010, spurred on by the first of the company’s hospitals, based in Wattala, achieving a cash break-even position in May 2010. Additionally stated was that “Hemas Power experienced an impressive first half, recording a revenue of Rs. 1.6 billion, a growth of 17% year-on-year and earnings of Rs. 153 million.”
It was also noted that improved profitability in most businesses, resulted in “significant margin improvements” for the group to the tune of 10.3%, from 8.4%, in terms of group operating margin and 6.8%, from 4.3%, in the case of group net margin.
The company’s fast moving customer goods business showed 8% turnover growth to Rs. 2.9 billion even though its profitability dropped by 5% to Rs. 249 million year-on-year. This was indicated to be a result of a new cess levy on imported materials that negatively affected sector gross margins.
It also emerged that the company’s transportation sector businesses recorded revenues of Rs. 374 million compared to Rs. 332 million last year while earnings were Rs. 133 million, a 46% year-on-year growth. While leisure sector activities revenue was Rs. 489 million as opposed to Rs. 341 million the previous year, with a reduction in losses to Rs. 8 million from Rs. 37 million recorded last year.
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