Corporate News

Hayleys posts Rs. 31 b turnover, Rs. 1.1 b PAT in 2007-08

Sri Lanka's Hayleys PLC has reported healthy turnover growth and encouraging improvements in pre and post tax profit from continuing operations in 2007-08, described by the multinational blue chip as a year of hard decisions and one in which it witnessed the most inimical macroeconomic conditions .

In results released to the Colombo Stock Exchange this week, the manufacturing and agriculture weighted conglomerate whose mix of businesses makes it a barometer of the country's economic performance, has reported that turnover grew 17 per cent to Rs. 31 billion in the year ending March 31, 2008, following strong performances in difficult circumstances by its businesses in manufacturing, transportation and plantations.

Profit before tax and discontinued operations in the year under review grew 10 per cent to Rs. 1,985 million, and profit after tax from continuing operations at Rs. 1,520 million, was an improvement of 11 per cent over the previous year, the Group said.

Measures initiated in the final quarter of the previous year to restructure the Group's Consumer Durables business had an impact of Rs 384 million during the year. As a result, final profit for the period was Rs 1,090 million, marginally higher than in the previous year.

Of this, profit attributable to equity holders of the Company was Rs. 453 million, 15 per cent lower than the previous year's Rs. 534 million. Nevertheless, this represented a strong recovery from the poor results at the start of the year and is more than a two-fold increase over the Group's performance in the first nine months of the year.

Commenting on these results, Hayleys Group Chairman N. G. Wickremeratne said that if not for the provisions for discontinued operations, profit attributable to equity holders of the Company would have been Rs 865 million.

"The other critical factor was the impact on the Group's business of the most inimical macroeconomic conditions in memory which affected the manufacturing businesses of the Group and local value-adding industry with a deadly combination of high inflation, high interest rates and an appreciating exchange rate," Wickremeratne said.

"The effect of this is difficult to calculate but must exceed a billion rupees or 5 per cent of the revenues of our export manufacturing sector."

Stafford Hotels net profits soar 78% to Rs. 35.9 m in nine months

Stafford Hotels PLC, the owners of Dolphin Hotel has recorded an impressive 78 per cent growth in net profits for the nine months up to December 31, 2007 with a net profit of 35.9 million against Rs. 20.2 million recorded for the previous period.

The turnover of Rs. 234 million for the period under review records 25% growth against Rs. 188 million for the corresponding period 2006/07. The group also carries in reserves and retained earnings Rs. 161 million and Rs. 63.6 million respectively.

The group which also includes Miami Beach Hotel and Rainforest Ecolodge (Pvt) owned and managed by Hemas Group is a unique example where a Hotel can perform exceptionally well despite the factors adverse to tourism in the country.

The hotel had maintained an occupancy rate of 80 per cent compared to Rs. 36.2 per cent recorded in the country during 2006/07 and it is expected that the same trend had followed during the recent financial year too.

KVPL post-tax profit grows 147% to Rs 158 m in 1Q, 2008

An improved contribution from the tea sector has enabled Kelani Valley Plantations PLC (KVPL) the plantation company of Dipped Products PLC, the Hayleys Group's multinational hand protection business to post a 147 per cent increase in post-tax profit in the three months ending March 31, 2008.

According to figures released to the Colombo Stock Exchange, the company's post tax profit grew to Rs. 158 million from Rs. 64 million in the corresponding quarter of 2007, while pre-tax profit rose by 140 per cent to Rs. 162 million in the same period.

Turnover increased to Rs. 852 million from Rs. 604 million, an increase of 41 per cent. Turnover from tea and rubber increased by 58 per cent and 19 per cent contributing to this growth.

KVPL Managing Director Kavi Seneviratne said: "We are encouraged by the quarter's results, especially in the context of increased costs of inputs and high inflationary conditions." He said the tea sector which recorded an operating loss during the same period last year had shown a satisfactory improvement to reflect a six-fold increase.

"The rise in prices was mainly driven by the shortfall in Kenyan production due to the political turmoil in that country.

The positive impact on price compensated for the shorter quality season experienced during the first quarter," Seneviratne said.

The significant improvement in tea production in the first quarter stems from the poor production of last year consequent to the work stoppage in late 2006. Rubber production fell marginally during the period under review due to unfavourable weather conditions. However, operating profit from rubber improved due to stronger prices. Seneviratne said that although profit from rubber increased by only 7 per cent, it constituted 60 percent, of the operating profit.

Ceylinco Development Bank net profit up 12% to Rs. 49.3 m

Ceylinco Development Bank (CDB) reported all round good results in asset growth, revenue, profitability, asset quality and productivity for the year ended December 31, 2007.

Chairman Dr. J. L. B. Kotelawala's message in the annual report released to its shareholders calling for the Annual General Meeting (AGM) on April 29 states that apart from the good financial results, CDB has also strengthened its reach by adding eight new outlets during the period under review bringing the total number of outlets to 26, covering major cities in the country.

CDB has successfully concluded an issue of 7.5mn ordinary shares in early 2008 which were launched in December 2007 infusing Rs. 75mn - fresh capital, strengthening its balance sheet and keeping in line with regulatory commitments.

Total assets have recorded a growth of 32% standing at Rs. 5.39bn, whilst revenue recorded a growth of 65.20% surpassing the Rs. 1bn mark for the first time in the 12 years of CDB. Net interest income also recorded a growth of 50.54%, Rs. 318.82mn.

The increase in the interest expenses to interest income ratio from 64.61% in 2006 to 67.77% in 2007 impacted the growth in net profit after tax at 12% recording Rs. 49.33mn. Earnings per share (EPS) recorded Rs. 3 and return on total assets (ROA) recorded 1.04%.