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Sunday, 16 August 2009





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Aitken Spence records Rs. 488mn as first quarter PBT

Aitken Spence PLC released its first quarter financial results to the Colombo Stock Exchange today, reporting Rs. 488mn as pre-tax profit, a decline of 19.4% while revenue fell by 20% to Rs. 5.06 billion over the previous year.

The diversified conglomerate attributed the decline as mainly due to drop in earnings from its Maldivian resorts and the plantations sector, which resulted in profits-after-tax being reduced by 22.3% and profit attributable to shareholders amounting to Rs. 293.8 million.

With a chain of seven resorts Aitken Spence is the largest international resort operator in the Maldives.

The islands attract high-end tourists mainly from Western Europe.

A sharp drop in tourist arrivals to the Maldives due to the global recession had a negative effect on the tourism sector earnings in the first quarter.

With aggressive promotions in alternative markets, especially in East Asia, we hope to further diversify our markets in the future, said J. M. S. Brito, Deputy Chairman and Managing Director of Aitken Spence PLC. During the quarter under review Aitken Spence Hotels announced that its first property, Neptune Hotel will be transformed into a 60 room wellness resort under its Heritance brand umbrella.

We are vigorously looking at opportunities in all sectors to partner in the development of the North and East provinces.

Concerted destination marketing and infrastructure development in targeted tourism hotspots would give reasons for the industry to be bullish about Sri Lanka's tourism prospects, in spite the recession curbing global travel, added Brito.

The company's cargo logistics sector which includes maritime services, cargo, integrated logistics and courier services displayed improved performance from the previous year.

The Group managed to sustain robust earnings from the port management & container services operations in South Africa.

Furthermore, a strong performance by the courier division during the first three months and improved efficiencies across the sector has resulted in an improved performance in cargo logistics.

Hatton National Bank's profits up by 31%

Hatton National Bank released its first half results for 2009 showing an impressive 13% growth in the Bank's profit after taxation, which amounted to Rs. 1.77 Bn.

The Bank was also recognised recently as the 'Best Bank in Sri Lanka' by Euromoney Magazine for its financial stability and consistent performance.

The Bank recorded a top line growth of 12 % to Rs 19.8 Bn., with main contribution coming from interest income.

Interest income for the period under review grew by 16% which was driven mainly by interest from investments in fixed income securities. Interest expenses also witnessed a 15% increase mainly from the growth witnessed in customer deposits.

The Net Interest Income for the Bank amounted to Rs. 7.09 Bn reflecting an impressive 18% growth from the corresponding period last year.

A drop of 18% was witnessed in income from foreign exchange as a result of the decline witnessed in foreign trade as well as stringent regulations imposed for booking forward exchange which resulted in a significant drop in forward booking of currencies.

Income from investments also depicted a marginal drop of 9% compared to 2008, due to the absence of the one off dividend amounting to Rs. 225 Mn paid by HNB Securities Ltd., in the second quarter of last year as part of the restructuring process that took place with the establishment of the new joint venture investment bank. The cost management initiatives that were put in place continued to payoff with operating expenses increasing by just 14% compared to last year. The Bank will continue to focus on improving productivity and managing cost in its efforts to reduce the cost to income ratio.

The Bank made Rs. 381 Mn as specific provisions during the period which is 11% higher than last year. However, a decline in general provisions was witnessed compared to 2008 as the loan book contracted during the period under consideration decreasing the general provisioning requirement, while last year the Bank accelerated its general provisioning to meet the 1% Central Bank regulation prior to the deadline of 31st March 2009.

The gross NPA ratio of the Bank increased to 8.7% which was reflective of the Banking Industry in the Country experiencing a drop in asset quality in the recent past due to slowdown in economic activity.

However, HNB continues to maintain a high provisioning cover of 56%, well above the industry average, as a result of prudent provisioning policies which has enabled the Bank to maintain the net NPA ratio at 3.86%

The Bank's total tax provision continued to rise this year with value added tax increasing by 22% and corporate tax rising by 34% compared to the corresponding period last year.

Allianz Lanka continues healthy growth performance

Allianz Lanka over achieved the company plan in all areas of business in the 2nd quarter of 2009, posting a General Insurance GWP of Rs 496 million, which is a growth of 48% over figures of the corresponding period last year.

Underwriting profits as at end June 2009, also increased by a substantial 358% to Rs. 56 million, which is a remarkable achievement in a challenging market. The company's Net Profit Before Tax was a record Rs 90 million, a percentage growth of 219 over the second quarter figure of Rs 28 million last year.

We are pleased that we have been able to sustain our steady growth and profitability into our fifth year of general insurance business in Sri Lanka. We still continue to maintain our Gross Operating Ratio well below industry norms, which we have maintained since inception, confirmed CEO Allianz Lanka, Surekha Alles.

The Company attributes its highly commendable performance to the implementation of several discerning core business strategies and to selective risk management and underwriting practices.

The success of its General insurance business in Sri Lanka prompted the setting up of Allianz Life Insurance Lanka in the country in November last year.

As of the second quarter 2009, the company achieved a commendable Life Insurance GWP of Rs 40.8 million.

Allianz has since expanded its branch network to the provinces and now has a strong presence in Kurunegala, Galle and Negombo, where the company services its rapidly expanding clientele with the same benefits, facilities and financial security enjoyed by its customers in Colombo.

Plans are also on board to expand to other viable locations including the North and East in the near future. 'We intend to fully utilise the business opportunities that have arisen as a result of the opening up of the North and East to private businesses', explained Mrs. Alles.


LANKAPUVATH - National News Agency of Sri Lanka
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