Corporate

AVIVA NDB records 42% growth in 1 Q

AVIVA NDB Insurance recorded a significant growth in consolidated group revenue amounting to LKR 2,731 million during the first three months ended 31 March, 2010.

This reflects a growth of 42% over the corresponding period in 2009.

Total Gross Written Premium income of LKR 2,080 million recorded a growth of 34% compared to the previous year reflecting a successful transformation of the Company and its sales force who are now known as `Wealth Planners'.

The commendable top-line performance of the group was largely driven by the 33% growth in Life insurance and 36% growth in General insurance business compared to the corresponding period in 2009.

The Group reported a loss of LKR 80 million which was attributed to brand migration investment.

Profit before tax excluding brand migration spend amounted to LKR 119 million.

There was also a prudent increase of provision for incurred but not reported (IBNR) claims for the General insurance business arising from the increased volume and mix of new business.

The bottom line performance for the period is marginally higher than the business plan for the period.

The financial results for the quarter do not include a bottom-line contribution from the long-term insurance business as it is usual that this is determined at the end of the financial period, after the actuarial valuation is carried out.

Commenting on the Company's performance, Managing Director, Shah Rouf said our results reflect a very successful transformation in line with the Aviva Group's vision of creating 'One Aviva Twice the value'.

The transformed entity, AVIVA NDB, was readily accepted by all stakeholders and this became evident immediately.

are delighted that it has become an instantly recognisable brand. Furthermore, our distribution capability was strengthened in the first quarter.

Our Wealth Planners are now equipped with the expertise to meet both Life and General insurance needs which is a significant value addition to our customers and this is reaping positive results for the Company. Bill Lisle, Chairman, said: 'We have had a great start with the Company's transformation and are now well positioned and poised to become a driving force in the industry'.

Aviva is committed to bring Prosperity and Peace of Mind to all our stakeholders and I am confident that with the prudent strategies in place for the growth of the business, we will deliver on our ambitious plans by the end of this year'.

2009-10 a record year for Haycarb

The world's largest producer of coconut shell-based activated carbon, Haycarb has more than doubled its profit before tax for the year ending 31st March 2010, and nearly tripled profit attributable to equity holders of the company. A significant contribution came from overseas manufacturing units in Thailand and Indonesia, coupled with marketing operations worldwide, the company said.

Releasing its income statements to the Colombo Stock Exchange this week, the Haycarb Group reported that profit before tax grew 129 per cent to Rs 819.8 million from Rs 358.7 million in the previous year. Profit after tax was up 146 per cent to Rs 685.6 million.

Profit attributable to equity holders of the company increased from Rs 225 million in 2008-09 to Rs 632.9 million in the year under review, a growth of 181 per cent. Turnover grew 12 per cent to Rs 5,076 million.

Basic Earnings per Share of Rs 21.30 for the year reviewed was nearly triple the EPS of Rs 7.57 for the previous year.

Based on these results, the Board of Directors of Haycarb PLC has recommended the payment of a final dividend of Rs. 3 per share, which adds up to a total of Rs. 5 per share for the year. Hayleys Group Chairman Mohan Pandithage described the performance as one of significant merit in the context of the global economic recession.

Haycarb Managing Director Rajitha Kariyawasan said: "Our strategy of steadily augmenting high value adding products in the total portfolio in tandem with maximising high margin generating products, complemented by the growing efforts of our strengthening global marketing network allowed us to improve the Gross Profit margin significantly."

He said reductions in oil prices helped to some extent to cushion the impact of higher input costs, particularly as a result of continually increasing prices of charcoal in Sri Lanka.

"We are facing increasing competition to secure supplies of coconut charcoal and shells in Sri Lanka, as a result of stagnation in coconut cultivation and increasing demand for these materials for manufacture of activated carbon and energy generation," he said.

"This has forced the company to import over 50 per cent of its charcoal requirements at a higher cost, and will remain an area of significant challenge in the years ahead."

A capital profit of Rs 144 million from the disposal of Haycarb's interests in two leisure sector properties in line with the Group's portfolio rationalisation had also contributed to profits, he said.

Looking ahead, Kariyawasan said critical environmental issues on climate change have resulted in a growing emphasis in developed and developing countries alike, on protection of the environment.

This in turn has created a strong demand for purification products and solutions that Haycarb is positioned to provide.

Haycarb's drive to innovate and pursue new product development involving special carbons will continue as the Group value adds to the product range and expands the process of providing end-solutions of premium quality, Kariyawasan said.

"We will continue to lay emphasis on promoting the Green Charcoal manufacturing capability of Recogen.

We are also actively pursuing environmental certification of most of our facilities," he said.

HNB Assurance on a high note

HNB Assurance PLC has made a strong start to the year 2010 by registering impressive growth rates in respect of both turnover and profitability for the quarter ending March 31, 2010. Its combined turnover measured by the gross written premium grew by 18% to reach Rs. 538 million.

The general insurance business was the main driver of growth recording a 27% growth over the corresponding period last year.

Life Insurance business also contributed with a 7% growth. While achieving a commendable growth in turnover, HNB Assurance was also able to record a 31% growth in Profit Before Tax and a 27% growth in Profit After Tax.

This was a creditable achievement in the midst of low interest rates which restricted the growth in Investment Income to just 10% over the corresponding period.