Corporate

Rocell Posts outstanding second quarter growth

Rocell Posted an outstanding second quarter growth in a Challenging Market Environment. Company profitability was sustained through an innovative marketing and operations strategy.

Royal Ceramics Lanka Plc (Rocell) reported an impressive growth for the Second quarter 2009-2010, recording an impressive 18% rise with an increase of Rs. 43 million in the group's cumulative profit after tax compared to the previous year.

This exceptional performance in light of a challenging market environment is claimed by the group to have been achieved through the implementation of several brilliant and prudent strategies that include carefully tailored greater marketing activities; adoption of effective sales structures, and innovative production structures leading to greater efficiency and reduced costs of their three tile and bathware manufacturing plants; and a significant increase in the export of locally manufactured Rocell tile and bathware products across Europe.

Commenting on Rocell's exceptional second quarter earnings results, Nimal Perera, Managing Director of Royal Ceramics Lanka Plc said. "It is with great pride and pleasure that we announce our Second quarter results, significant of sustained profitability and smart business acumen."

"In the face of the difficult economic conditions over the last few months, the company decided to implement contemporary operations and marketing strategy by expanding the network of showrooms and introducing state-of-the-art bathware concept centre at Nawala.

In the wake of our success as a result of these strategies, we have further extended our reach to cover the North and East, ensuring best services."

As a result of their tremendous growth and success in this Second quarter, Rocell recently introduced its latest venture, their state-of-the-art bathware manufacturing plant to facilitate delivery of locally manufactured quality branded products to the local and international markets.

The first quarter of this financial year also saw the company introduce several innovative products under their flagship brand, Rocell, which included their Material and Design surface covering collection and reflects the company's strong orientation towards design and functional superiority.

Royal Ceramics also unveiled the 600x600 tile format, the largest tile size produced in Sri Lanka and a new range of top-of-the-line, premium quality bathware.

Successfully operating in both the Sri Lankan and International markets, Rocell is renowned for their commitment to innovation, value, quality, excellence in design and the highest standards in terms of functionality.

With this significant growth marking a milestone in the company's history, Royal Ceramics foresees strong growth momentum and increased business development throughout this financial year.

CF poised to expand business

Central Finance emerged through the most difficult period ever for RFCs when public confidence in the sector was seriously threatened as a result of the collapse of unregulated institutions also engaged in mobilizing funds from the public. In addition, this period witnessed very high interest rates, tight liquidity and deteriorating market conditions where certain sectors of our economy were adversely affected as a result of the global economic crisis.

As a result, growth of new business was seriously hampered. Central Finance was yet able to improve its net interest income by 5.24%, a key measure of profitability from core operations for the half year ending September 2009.

Operating profit before taxes reflected a healthy Rs. 716.7 Mn. for the Company and Rs. 872.7 Mn. for the group while the profit after tax reflected Rs. 430.6 Mn. for the Company and Rs. 515.9 Mn. for the group.

An obvious fallout of the slowdown in business growth has been the contracting loan book which resulted in profit before provisions and losses decreasing marginally by 4.41%. Loan loss provision increased as expected in this difficult economic climate, resulting in profit before taxes being 11.85% lower than in the previous year.

The combined effects of VAT on financial services and income tax continue to increase, as a result of lower demand for lease facilities as against hire purchase as unregistered vehicles become unattractive on account of high import duties and other levies. As a result, the net profit after tax for the period is 15.77% below the comparable period of 2008.

However, earnings per share continued to be healthy at Rs. 23.22 with net asset value of share at Rs. 365 (Rs. 422.38 for Group) and market value as at September 30th at Rs. 300.

CF has emerged out of this difficult period with extremely satisfactory levels of liquidity of Rs. 1.6 Bn over and above the statutory requirement. Capital Adequacy ratios are at 22.73% (Tier I) and 23.53% (Total - Tier I and II) when the required limits are only 5% and 10% respectively.

It continues to enjoy the highest rating at A+ (lka) (Fitch Ratings Lanka) among all registered Finance and Leasing Companies. The Company enjoyed significant growth in its deposit base of over 20% demonstrating an extra ordinary level of confidence by the investing public.

Rising business confidence is expected to bring back corporate, housing, auto and retail demand helping the industry to boost loan growth.

HNB Assurance reports excellent results

HNB Assurance PLC has yet again reported excellent results for the 9 months ended September 30, 2009.

It recorded a turnover of Rs. 1.63 billion which was 19% higher than the turnover achieved during the corresponding period last year.

The Gross Written Premium (GWP) from General Insurance grew by 22% while the Life sector generated a GWP growth of 15%.

These growth rates are significantly above the growth rates experienced by the insurance industry as a whole during this period.

The company was also able to achieve a growth of 56 % in its profit before tax and a growth of 15% in its profit after tax. The profit before tax for the 9 months stood at Rs. 75.4 million while the profit after tax recorded Rs. 55.3 million.

These figures do not include any contribution from the Life business since profits from Life business are recognized only after the year - end actuarial valuation.

HNB Assurance PLC also achieved its first international recognition recently by becoming the second runner - up in the Financial Sector - Non Banking category at the Best Presented Accounts and Corporate Governance Disclosures Awards - 2008 conducted by the South Asian Federation of Accountants (SAFA).