Sunday Observer Online


Sunday, 21 February 2010





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SLI posts remarkable growth in Life Insurance

Sri Lanka Insurance (SLI) recorded an impressive growth in Life and General Insurance categories during January compared to the corresponding period last year, said Managing Director SLI, Dr. Nalaka Godahewa.

He said, Life Insurance posted a 333 per cent growth last month compared to the corresponding period in 2009. The company faced many challenges to achieve this feat.

Dr. Nalaka Godahewa exchanges the MoU with CEO/Chairman DIMO, A.R. Pandithage. - Pic: Sumanachandra Ariyawansa

"This growth will be sustained through product launches and aggressive marketing", he said.

Dr. Godahewa disclosed these facts at a media briefing held at the Ceylon Continental Hotel on Wednesday to announce SLI's partnership with premier motor vehicle agents to offer customer convenient solutions to Motor Insurance policy holders.

SLI the pioneer insurance company in the country made another first in the insurance sector with the tie-up with globally renowned vehicle franchise holders to offer a tailor made service to customers. A hassle free experience at repairs and restoration of damaged vehicles through the repair centres islandwide is a hallmark in the motor insurance sector.

The partners are AMW, Toyota, Carmart, DIMO, Hyundai, Prestige, Senok, Swedish, Carplan and United Motors.

"The SLI has a good blend of private and public sector following the recent transition to a fully government owned entity, he said.

The protection of the State and the service standards of the private sector is a unique combination that provides a competitive edge to the company.

Free replacement of spare parts, after collision services, follow up services and convenience of payment to garages are some of the other benefits of the agreement.

Dr. Godahewa said plans are in the offing to introduce more insurance schemes for the agriculture, healthcare and housing sectors. Promotional campaigns will be held throughout the country every month.

SLI, a private entity since 2002 under business tycoon Harry Jayawardena changed hands last year following a Supreme Court judgement to handover the management back to the Government.

Ever since the transition there has been speculation whether inefficiency and corruption would creep into the prestigious entity under the public sector where it had proven otherwise.

Kotmale posts pre-tax profit of Rs 57 million

Strong growth in the liquid milk based product segment has enabled Kotmale Holdings PLC to post a pre-tax profit of Rs 57 million for the nine months ending 31st December 2009, despite a slowdown in the powdered milk business.

Kotmale, maintained pre-tax profit on par with that of the corresponding period of last year, although the turnover for the period at Rs 1 billion was marginally lower.

The company reported a profit after tax of Rs 42 million, which represented a 10 per cent decline due to a deduction of Rs 9.4 million on account of withholding tax on inter-company dividends.

Commenting on these results, Kotmale Holdings Director and CEO Jude Fernando said rising world market prices for powdered milk at a time when domestic retail prices were capped and increased import duties prevailed, compelled the company to curtail import and sales until conditions were more favourable.

A volume-driven business, powdered milk previously accounted for about a third of Kotmale's turnover.

Nation Building Tax, which became an additional charge to the bottom line this year due to the nature of the business also impacted on the company's figures, he said.

However, improved efficiencies had enabled Kotmale to reduce cost of sales by 5 per cent and finance expenses by a hefty 68 per cent during the reviewed period.

The liquid milk based product segment recorded a strong performance improving turnover by 23 per cent and posted a remarkable profit growth of 149 per cent, Fernando disclosed. Administrative expenses reduced by a marginal 2 per cent.

Net profit after tax, discounting the withholding tax on inter-company dividends, would have reflected a growth of 9 per cent over the first nine months of last year, he said.

The Group's operational performance at the end of the third quarter is encouraging and cause for optimism, he added.

'We have achieved noteworthy volume growth in the local market, strengthened our skills base and expanded our distribution network.

We also believe our portfolio is now better balanced for good long-term prospects.'

Kotmale's net assets per share at consolidated level stood at Rs. 16.26 as at 31st December 2009, as against Rs. 12.99 a year earlier.

The Kotmale Group of companies traces its beginnings to 1979 and the cool climes of Bogahawatte in upper Kotmale, also known as the Kotmale valley where it began business as a manufacturer of high quality cheese.

Today, the company is the local market leader for liquid milk, employs 370 people at three manufacturing plants in Bogahawatte, Mulleriyawa New Town and Kalutara, and purchases more than 10 million litres of fresh milk per annum, from 7,000 dairy farmers.

Piramal glass poised for growth drive

Piramal Glass Ceylon Plc (PGC), a manufacturer of flaconnage (glass containers) for food and beverages, pharmaceuticals, Agro ,as well as cosmetics and perfumery, have reported its continuation of profit trend this quarter too, after the turnaround it achieved second quarter of this financial year 2010 said the CEO and Executive Director of PGC, Sanjay Tiwari.

According to Tiwari, nett sales for the quarter ending 31st December, 2009 grew by 12% to Rs. 910 million. "Our Gross profits grew by 27% to Rs. 261 million, while the nett profit for the period was Rs. 28.6 million as compared to a loss of Rs. 87 million for the same period last year".

The total increase in sales during the quarter was only due to the increase in the export segment.

The company reported an export of Rs. 243 million, which in turn reflected a growth of 241% during the third quarter of the financial year 2010.

The company's exports consisted of coloured liquor and wine bottles, as well as flint liquor and food bottles. During the period under review the Company also launched some new bottles in the international market.

The company in its cost reduction drive converted more than 50% of its long term Rupee debt to foreign currency loans.

This was done looking forward to the exponential growth in the exports.

This conversion was done in November 2009 with the same consortium of banks. The management is confident that this will result in the company being able to reduce its interest costs in the future periods.

The Total Revenue for the nine months ending 31st December grew by 19% to Rs. 2,661 million.

The Gross profit [GP] ratio increased to 27% this year as against 19% in the similar period of the previous year.

The company achieved the GP of Rs. 705 million for the first nine months of the FY 2010 as against Rs. 431 million in the same period previous year reflecting a growth of 64%.

Nett loss for the nine months ending results of the year FY 2010 was lower at Rs. 89 million when compared to the loss of Rs. 207 million in same period of FY 2009. "Once again PGC has demonstrated its capability of selling the capacities in the international market by achieving an encouraging growth of 210% in export sales as against the corresponding period in the previous year.

The exports during the nine months increased to 34% of total revenue, as against the figure of 13% in same period in the financial year 2009".

During the period under review, PGC exported a total volume of over 20,000 tonnes, consisting of over 73 million bottles to various countries.

Tiwari said that the domestic market had continued to show a drop of 9% as against that of the same period of the previous year.

"The Company has yet to realize the benefits in the domestic market with the opening up of the North and the East subsequent to the cessation of the war", he said.

With the ongoing improvements and stabilization of the new plant, the daily production of glass tonnage drawn from the furnace has increased from 191 tonnes to 217 tonnes, with efficiency too increasing by over 6%.

"This has resulted in almost 8500 tonnes of additional glass being produced during the first nine months of the year."

On the cost front, the company was hit by the continuous increase in the LPG prices as PGC is one of the largest industrial consumers of LPG in the country and other input costs which affected the profitability of the company in a significant manner.

Rose Cooray joins Board of HNB

The Board of Hatton National Bank PLC has appointed Ms Rose Cooray as an Independent Non-Executive Director w.e.f February 15 according to a Press Release issued by the Bank.

Ms Cooray had a distinguished career of over 35 years with the Central Bank of Sri Lanka and the Ministry of Finance and served as the Secretary to the Monetary Board of Sri Lanka prior to her retirement in May 2009.

From 1999 to 2004, she had served as the Director General Fiscal Policy and Economic Affairs Department of the Ministry of Finance, on release from the Central Bank.

She has been the Vice Chairperson of the Institute of Bankers of Sri Lanka from 2005 to 2009.

Bilateral trade seminar

The National Chamber of Commerce of Sri Lanka (NCCSL) will hold a bilateral Trade Seminar on Investment and trade opportunities between India and Sri Lanka on Thursday 25th February 2010 from 2.00 p.m to 5.00 p.m at the Chamber Auditorium, D.R. Wijewardene Mw, Colombo 10.

First Capital PAT tops Rs. 619.5 million

First Capital achieved profit after tax of Rs. 619.5 million for the nine months ending 31st December 2009, a nine-fold increase over the corresponding period of last year. Profit attributable to equity holders of the parent company grew nearly 12 times to Rs. 553.2 million. Earnings per Share increased to Rs 16.39 for the review period from Rs. 1.39 for the first nine months of 2008-09, while Group Net Assets per Share stood at Rs. 29.71 as at 31st Dec 2009, up from Rs. 10.91 a year earlier.

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