CORPORATE

JKH PBT Rs. 4.98b for 1H

"JKH Group's Profit Before Tax (PBT) of Rs. 3.45 billion for the quarter and Rs. 4.98 billion for the first six months of the financial year 2010/ 2011 reflect increases of 281 percent and 167 percent over the PBT of Rs. 905 million and Rs. 1.86 billion in the corresponding periods in the previous year," said Chairman of JKH, Susantha Ratnayaka.

Recurring PBT, excluding gains from the sale of stakes in Asian Hotels and Properties PLC (AHPL) and John Keells Hotels PLC (KHL), grew by 83 percent for the quarter and 71 percent for the first six months.

Profits attributable to Equity Holders for the quarter and first six months, ended September 2010, of Rs. 2.93 billion and Rs. 3.94 billion respectively, reflect an increase of 409 percent and 221 percent over the corresponding periods in the previous year.

The revenues at Rs. 13.97 billion and Rs. 26.89 billion in the second quarter and the first half of 2010/2011 were 24 percent and 26 percent above the Rs. 11.23 billion and Rs. 21.30 billion recorded in the corresponding periods in the previous year.

The Company PBT of Rs. 2.31 billion for the quarter and Rs. 3.33 billion for the first six months of 2010/2011 reflect an increase of 1,330 percent and 70 percent above the PBT of Rs. 162 million and Rs. 1.96 billion in the corresponding periods in the previous year. This PBT includes the gain on the sale of shares of John Keells Hotels PLC (KHL) and Asian Hotels and Properties PLC (AHPL), during the quarter.

In the sector of transportation while SAGT performed to expectations, the Airlines and Logistics business units, in particular, performed significantly above the corresponding period in the previous year. The bunkering business, whilst maintaining market leadership, was adversely affected by volatile world oil prices during the quarter.

In line with expectations, Leisure recorded a PBT of Rs. 323 million for the first six months of the financial year compared to a loss of Rs. 174 million recorded in the same period last year, despite the full and partial closure of some hotels for refurbishment and upgrades. The second quarter PBT was Rs. 337 million [2009/10 Q2: Loss Rs. 127 million]. This improvement in performance is mainly due to better results achieved by both the Sri Lankan resorts and city hotels, Cinnamon Grand and Cinnamon Lakeside.

Coral Gardens has been closed for a complete refurbishment and is scheduled to be re-opened as Chaaya Tranz in Winter 2011/12. The construction of the new hotel in Beruwela - Chaaya Bey - is progressing as planned.

The Chaaya Lagoon Hakuraa Huraa in the Maldives has been operational since September 2010 after the completion of its refurbishment. During the quarter, KHL exited the loss making Cinnamon Alidhoo and acquired the head lease of Chaaya Island, Dhonveli, which have and will substantially improve the profitability of the Maldivian resorts.

In the sector of Property at the end of October, a 475 apartment development on Union Place in the heart of Colombo was launched and market surveys indicate encouraging interest from potential buyers and expressions of interest have already been received for over 50 percent of the units.

Consumer Foods and Retail sector - The soft drinks, ice creams and processed meats businesses saw strong volume growth while the supermarket business had a significantly better quarter on the back of higher same store sales and better margins.

Financial Services - John Keells Stock Brokers and the Group's banking associate, Nations Trust Bank were the main contributors to this increase. The contribution from Union Assurance (UA) was in line with expectations. It should be noted that profits of the life segment are recognised only at the end of the 3rd quarter, which is the end of UA's financial year.

Information Technology (IT) had an improved performance for the first six months on the back of an improved performance by the Office Automation and BPO segments. IT recorded a PBT of Rs. 35 million for the first six months, compared to the loss of Rs. 35 million in the corresponding period in the previous year. The second quarter PBT of Rs. 34 million was a significant improvement over the same period last year [2009/10 Q2: Loss Rs. 3 million]. The acquisition of a number of new customers by the BPO business, which though resulting in extra costs due to relocation and associated expenditure in the next two quarters, augurs well for the future.

Others comprising of Plantation Services, John Keells Capital and the Corporate Centre recorded a PBT of Rs 1.98 billion for the six month period, which is 484 percent higher than the Rs. 339 million PBT recorded in the same period last year. The gain on the sale of shares of KHL and AHPL during the quarter, contributed towards this significant growth. The second quarter PBT was Rs. 1.93 billion [2009/10 Q2: Rs. 122 million].

Aitken Spence profits up 37% in 1H

Aitken Spence PLC released its second quarter financial results to the Colombo Stock Exchange recently reporting a rise in pre-tax profit to Rs.1.6 b for the six months ended March 31, while profit attributable to shareholders rose by 37 percent to Rs. 1.05 b, over the previous year.

The Sri Lanka-based diversified conglomerate's earnings per share rose by 37 percent to Rs. 38.65 for the six months while group revenue increased by 11.6 percent to Rs. 11.92b.

Aitken Spence is among Sri Lanka's leading corporate entities with interests in hotels, services, logistic solutions and strategic investments in South Asia, the Middle East and Africa.

Deputy Chairman and Managing Director, J.M.S. Brito said, "Our hotels sector performed significantly better during the period under review, driven primarily by our properties in Sri Lanka. We were also able to improve the profits from our chain of resorts in the Maldives."

"In addition to our active involvement in the expansion of the Port of Colombo, we are moving ahead with major investments in tourism and several other sectors.

With an enabling environment for the private sector to invest, Sri Lanka can expect sustained levels of high growth."

During the period under review, the Ministry of Ports and Aviation and Sri Lanka Ports Authority granted the Aitken Spence-China Merchants Holdings International Consortium the letter of intent to design, build, operate and transfer a new deep-water container terminal in Colombo Port following Cabinet approval.

Aitken Spence announced in September that it signed an agreement with the luxury resort operator Six Senses group to establish the First Six Senses property in Sri Lanka as a 50:50 joint venture at a cost of USD 40 m.

"The company's ability to attract a globally acclaimed brand in up-scale sustainable tourism to invest in a major project in Sri Lanka would greatly help Sri Lanka attract similar brands to the island and establish itself as a high-end destination that offers a sustainable tourism product", said Brito.

With the view to expanding its container freight station activities to cater to the expected demand the Company acquired a 46,000 sq. ft. state-of-the-art container freight station facility.

On October 5 the Company subdivided its shares on the basis of 1 ordinary share into 15 ordinary shares. Consequent to the subdivision the number of ordinary shares of the Company increased from 27,066,403 to 405,996,045, without any change to the Stated Capital of the Company of Rs. 2,135 million.

The Company paid an interim dividend of Rs. 3.50 and a final dividend of Rs. 6.50 per share for the year ended March 31. The total dividend payment for the year amounted to Rs. 270,664,030/-.

HPFL IPO oversubscribed 57 times

The initial public offering of Hydro Power Free Lanka Ltd (HPFL) opened for subscription on October 26, was closed at 4.30 pm on the same day, as the issue was oversubscribed 57 times.

The total applications received, requested for 1.997 billion shares worth a cumulative value of Rs.19.97 billion.

The Company, to be listed on the Main Board of the Colombo Stock Exchange, offered 32 percent of its equity stake to the public.

The initial offer of 35,000,000 Ordinary Shares at Rs. 10/- was raised so as to promote future growth in the company and accordingly the Rs. 350 million raised through the issue would be invested in the construction of two to four mini hydro power plants (MHPs) in Gampola, Kuruwita and Ragala areas.

The issue managed by the Corporate Finance arm of Taprobane Holdings Ltd., was placed by their agent, Taprobane Securities (Pvt) Ltd., who achieved 57.04 times oversubscription or the highest demand of 19.97 billion, which sparked off the largest interest witnessed of all the IPO s recently.

The IPO launched amidst bearish conditions prevailing in the stock market, drew 43 applicants for the entirety of the 35 million shares, while almost 69 percent of the applications received were for the minimum of 2,000 shares.

An equitable base of allotment for the shares have been challenging. However the Board of Directors of the Company will ensure that the small investors are retained with the maximum possible allotment and the basis of allotment will be announced.

SLT nine months pre-tax profit tops Rs. 3.73 b

Sri Lanka Telecom (SLT), released its Group and Company Financial Results for the nine months ended September 30. The SLT group comprises its parent company (SLT) and seven subsidiaries including Mobitel.

The group has recorded a Profit before Tax (PBT) of Rs. 3.73 b and a Group Profit After Tax (PAT) of Rs 2.40 b with YoY growth rates of 105 percent and 108 percent.

PBT of Rs. 1.58 b has been recorded for Q3 compared to PBT of Rs.5 m recorded in the corresponding period of the previous year. Recorded Group PAT for the 3rd quarter is Rs. 1.03 b, a YoY growth of 643 percent from a loss of Rs. 189 m.

After normalization for non recurring expenses and Telecommunication Development Charge (TDC) refunds, the Group recorded a PBT of Rs. 4.49 b which is an increase of 95 percent YoY.

The Group reported revenue of Rs. 37.34 b. and Rs. 12.77 b for Q3, recording a growth of 4 percent YoY for both periods. Group revenue also grew by 3 percent on an adjacent Quarter on Quarter (QoQ) basis.

Major Group Key Performance Indicators marked positive trends. The group EBITDA (after International Telecommunication Levy - ITL) for the 9 months grew by 7 percent to Rs. 12.67 b while EBITDA (after ITL) margin rose from 33 percent to 34 percent YoY. PAT margin of the group for the 9 month period rose from 3 percent to 6 percent.

Group Free Cash Flow grew by 448 percent to Rs. 7,308 m, from a negative Rs. 2,099 m of same period of the previous year. The growth was mainly attributed by lower capital investments coupled with better performance of Mobitel.

Chairman SLT Nimal Welgama said that the Group has built a well diversified business portfolio with strong market positions in Fixed, Mobile, International, Data and Broadband services to seize new market opportunities and capture a strong share of the underlying economic growth occurring across all sectors of the country.

The company experienced a drop of just under 2 percent in its operating revenue during the first nine months of the year 2010 on a YoY basis; however strong revenue growth was recorded at 4 percent on an adjacent QoQ basis.

PGC net profit Rs.210.2m for 1H

"Piramal Glass Ceylon Plc (PGC), a manufacturer of flaconnage (glass containers) for speciality food and beverage, cosmetics, perfumery, agro chemicals, wine as well as pharmaceuticals, have reported a net profit of Rs. 210.2 million in the first six months of the financial year 2010-11 as against a loss of Rs 118.0 million posted during the corresponding period of the past financial year.

CEO/Managing Director Piramal Glass, Sanjay Tiwari said "the quarter ended 30 September 2010 has seen of stellar performance through significant growth in the domestic market share as well as in the premium segment of the export market.

The total sales for the quarter grew by 8 percent to Rs 1,026.2 million compared with that of the same period the previous year; a contribution that was mainly driven by domestic sales which showed a growth of 27 percent during the quarter under review.

The premium segment in the export market too has shown a growth of 30 percent during the quarter under review."