CORPORATE

Singer profits up in Q3

Continuing its impressive 2010 financial year, Singer Sri Lanka concluded the third quarter by posting dominant revenue and profit results. CEO, Asoka Pieris in his review stated that the company continued its growth trend of the first two quarters.

Third quarter revenue was the highest for the year, with a growth of 38 percent against the previous year attesting to Singer Sri Lanka's leadership position. Year to date revenue increased by 31 percent compared to the 2009 financial year, an indication of the Company's steady growth. This growth in revenue was fuelled by an increasing demand for the Company's products and services, including refrigerators, televisions, washers, furniture, DVD players, audio equipment, kitchen appliances and fans.

Sparked by the growth in revenue, an expansion of operating margins and a decrease in net finance cost, Singer Sri Lanka's third quarter profits before tax climbed by Rs. 214.7 million. With consumer preferences shifting towards more premium products, the Company is well positioned to give Sri Lankans exactly what they desire. Singer Sri Lanka's recent introductions of air conditioners and personal computers have proven to be huge hits, with very strong growth in their respective product categories.

As the nation's economy improves, Singer Sri Lanka's future prospects become even more favourable. The Company, which has long been the market leader in consumer durable goods, looks certain to assume an even more dominant industry position in the final quarter of the 2010 financial year through its continued dedication to world-class products and customer service.

Numbering more than 370 stores, Singer Sri Lanka has the island's most extensive retail network, giving its customers unrivalled convenience and choice. The Company also has the most wide-ranging service network in the country, ensuring that customers anywhere in Sri Lanka can avail of Singer's reputation for industry-best after-sales service.

Singer Sri Lanka knows that its sustained success is driven by Sri Lankan consumers and is determined to keep moving with an even better performance in the fourth quarter of the 2010 financial year.

Hemas profit up in 85% in 1H

"The Hemas Group recorded consolidated revenues of Rs. 8.7Bn for the period ended 30th September, a growth of 18percent over last year mainly driven by the growth of Healthcare and Power businesses.

Consolidated earnings stood at Rs. 588Mn for the first six months of the year, a notable growth of 85percent over the previous year.

Improved profitability in most businesses has resulted in significant margin improvements, with the Group operating margin increasing from 8.4 percent to 10.3 percent and the net margin increasing from 4.3percent to 6.8percent", said CEO Hussain Esufally.

The FMCG sector showed a growth in turnover of eight percent, recording Rs. 2.9Bn, and a marginal drop in earnings of five percent recording Rs. 294Mn for the period under review.

Most categories in our FMCG portfolio contributed positively to the growth in the sector revenue. However, the sector gross margin suffered a marginal drop mainly due to the impact of a new CESS levied on some imported material.

The Healthcare sector recorded a turnover of Rs. 3.1Bn, a growth of 30 percent year-on-year, and earnings of Rs. 122Mn in comparison to Rs. 62Mn recorded last year, reflecting a growth of 97.8 percent.

The pharmaceutical business performed beyond expectations, with a 27 percent growth in top-line while strengthening its market leadership position with a market share of 16.4 percent. (Source: IMS).

Our flagship hospital in Wattala continued to improve its performance, achieving cash break-even position in May and was the main contributor to the growth in the hospitals category, which posted a revenue growth of 57 percent.

The hospitals in Wattala and Galle continued to win the patronage and trust of the local community who have contributed greatly to the steady growth of our hospitals.

In September, the Hemas Hospital laboratory expanded their services by commencing a minilab in Ragama that would not only carry out laboratory investigations but also provide ECG service, channeling services and CT and MRI referral services for Hemas Hospital Wattala.

The Leisure sector achieved a revenue of Rs. 489Mn in comparison to Rs. 341Mn the previous year, and reduced its loss to Rs. 8Mn in comparison to the loss of Rs. 37Mn recorded the previous year.

In August, our hotel subsidiary, Serendib Hotels PLC acquired 19.9percent of Cyprea Lanka (Pvt) Ltd, which owns Kani Lanka Resort & Spa. The balance, 80.1percent was acquired by Minor International, our hotel partner.

All our hotels continue to benefit from the positive outlook of the country in the post war scenario and are currently enjoying higher occupancy levels compared to last year with both Serendib and Dolphin hotels recording average occupancy rates in excess of 70percent during summer.

Revenue of the Serendib Group was impacted by the partial closure of Hotel Dolphin, which reopened in October after completion of its upgrade at a cost of Rs. 530Mn.

The Transportation sector recorded a revenue of Rs. 374Mn, in comparison to Rs. 332Mn achieved last year, and earnings of Rs.133Mn, resulting in an impressive a year-on-year earnings growth of 46percent.

While the overall industry grew in both passenger and cargo volumes, our Aviation segment grew at a faster growth trajectory.

This contributed to a significant improvement in performance as at the end of September and further strengthened our market share in the Aviation services industry.

Our maritime business benefited from enhanced maritime services and increased volumes through the Port of Colombo.

Hemas Power experienced an impressive first half, recording a revenue of Rs. 1.6Bn, a growth of 17 percent year-on-year and earnings of Rs. 153Mn, compared to Rs. 4Mn achieved last year. Our hydro power plants in Giddawa and Agra Oya have contributed 10.1GWH to the national grid, whilst our thermal power plant Heladhanavi, contributed 345.1GWH during the six months ending September.

The hydro power plants showed an increase in performance over last quarter as a result of healthy rainfall in both catchment areas and higher tariffs in comparison to the previous year.

Heladhanavi revenues was enhanced by the pass-through effect of increasing fuel prices that were revised upwards on September 1.

DFCC PAT Rs 5,645m in Q1

The DFCC Bank's non-audited profit after tax for the three months ended June 30 (current period) was Rs5,645 million and the consolidated profit for the current period was Rs 3,346 million.

The results of the current period include profit relating to the sale and change of classification of part of the Bank's shareholding in Commercial Bank of Ceylon PLC (CBC).

The contribution to profit after tax from the transactions related to CBC was Rs 5,282 million for the Bank and a lower amount of Rs 2,921 million in the consolidated income statement.

The difference was due to the equity accounted higher carrying value of the shares in the consolidated balance sheet. The Bank sold ordinary voting shares in CBC amounting to 10.7 percent of issued voting shares during the current period.

The Bank also transferred 10.6 million ordinary voting shares representing 3 percent of the issued shares to dealing securities reflecting the decision to reduce the Banks holding to 15 percent.

The residual holding of 15 percent has been classified as an investment security and is carried at cost (Rs 31.31 per share) in the Banks balance sheet and at equity accounted cost (Rs 78.61 per share) as at the time CBC ceased to be an associate company, in the consolidated balance sheet.

The investment in CBC was treated as an investment in an associate company until June 1.

The consolidated income statement for the current period, therefore includes the proportionate share of the profit after tax of CBC for April and May based on non-audited half-year financial results of CBC.

The share of profit of CBC for the period January to March was accounted through the Reserves.

The post tax profit of the Bank excluding the impact of the transactions in CBC shares was Rs 363 million in the current period compared to Rs 468 million in the previous period.

The main reason for this reduction is the significant increase in gross specific provision for bad and doubtful loans and leases that increased from Rs 188 million in the comparable period to Rs 420 million in the current period.

The provision net of recoveries was also higher at Rs 297 million in the current period compared to Rs 116 million in the corresponding period.

The basis for recognition of impairment losses of loans for accounting purposes will change from the next financial year with the implementation of the Sri Lanka Accounting Standards on Financial Instruments.

Unlike at present, the new basis takes into account time value of money even if the full amount of doubtful debts are collected over a period of time.

CTC contributes Rs. 40.9b to state coffers end Q3

Law enforcement authorities' activities in protecting the Government's revenue base, resulted in the seizure of 53 million counterfeit and smuggled cigarettes valued at more than Rs.779 million.

In addition, an improved brand mix and excise-led price increases, helped grow overall Government revenue (comprising all levies, duties and taxes) from Ceylon Tobacco Company to Rs.40.9 billion.

A record 1,400 raids were conducted during the first nine months compared to 1,190 over the same period last year.

Provincial council tax grew by Rs.140 million to Rs.2.4 billion, whilst volumes continued to remain stable as a result of improved economic conditions. The company continued to pursue productivity improvements and investments in its key brands, offering a better brand mix and sales value, supported by lower costs, helping increase profit after tax by Rs.608 million, for the nine months ending September.

The company's flagship corporate social responsibility initiative, the Sustainable Agricultural Development Program (SADP), continues to provide noteworthy results with more than 8,400 families presently enrolled.

The Eastern Province post conflict is also benefiting from SADP with 2,500 families improving their agricultural skills via the concept of home gardening. To date over 1,350 families have graduated, having achieved the objectives of SADP.