Corporate News

Ceylinco insurance non-voting share issue to raise Rs. 1.5 b

Ceylinco Insurance Plc will launch its non voting share issue to raise Rs. 1.5 bln.

The non-voting share issue will open on June 20 and the company will issue 8.5 million non voting shares at Rs. 175 per share, said Chief Executive Director (General) Ceylinco Insurance Plc Ajith Gunawardena.

He said that monies raised from the issue will be used for further expansion into the region, establish medical centres and strengthen the local presence.

At present we operate in 11 countries including Bangladesh, Nepal, Maldives, Dubai, Oman, Qatar, Kuwait, Saudi Arabia and Phillipines while we are planning to venture into Thailand, Vietnam and Indonesia in the near future.

Gunawardena said that the company has already set up five medical centres and any adult who obtains a policy by paying Rs. 500 or a child who pays Rs. 250 can visit the medical centre and get OPD treatment which includes checking of pressure and blood sugar, dressing of wounds and burns as well as treating of common ailments. Any number of visits per year is permitted.

He said the reason to introduce the spot for motor as well as non-motor was because people required speed. Today speed is the name of the game. Therefore, we adopted that to our business to serve our customers with speed.

These innovative steps helped us to increase the profitability of the company to over Rs. one billion. The gross written premium for both life and general stood at Rs. 17.2 bln in 2007.

The company is also planning to create new channels of distribution as we want to take insurance to the doorstep of the customer.

Gunawardena said that voting shares of Ceylinco Insurance are trading at the bourse between Rs. 200-225 which is claimed to be the highest in the financial sector.

He said that they have won many awards including innovation.

Speaking of their CSR initiatives, he said that every person who dies due to a bomb blast is given Rs. 50,000 while the Sathkara Fund assists policyholder families in health, education and extracurricular activities.

The Ceylon Insurance Company was the first Sri Lankan company registered under the Companies Ordinance of 1938.

The company commenced operations in April 1939. In 1962 all life insurance business was taken over by the Insurance Corporation of Sri Lanka which was owned by the government and in 1964 the general insurance business too was taken over by the government.

In 1988 the government liberalised the insurance sector and permitted private insurance companies to enter the market again.

The managers to the issue is SMB Kenanga Investment Corporation Ltd, while the bankers to the issue is Seylan Bank Plc.

SG

JKH Group profit after tax up 45% to Rs. 5.12b for 2007/08

The John Keells Holdings (JKH) group profit after tax (attributable to equity holders) increased by 45 per cent to Rs. 5.12 billion while the group revenue increased by 27 per cent to Rs. 41.81 billion during the financial year ended March 31, 2008. Group profit before tax grew by 37 per cent to Rs. 6.58 billion .

The earnings per share increased by 32 per cent to Rs. 8.00 while the dividend payout increased by 29 per cent from 62.8 per cent to 81.0 per cent. The net cash flows from operating activities increased by 174 per cent to Rs. 6.91 billion. The Cash EPS increased by 27 per cent to Rs. 9.54. The pre tax return on capital employed increased to 13.7 per cent from 13.6 per cent in the previous year.

Chairman Susantha Ratnayaka said the macro environment continued to pose a multitude of challenges during the year with the escalation of the North-East conflict and the increased frequency of incidents of violence across the country. Commodity and oil prices rose sharply on the back of increasing global prices, he said.

Interest rates continued to remain high against the backdrop of high inflationary trends. A re-valued Sri Lankan Rupee, while helping to lower the cost of imports, resulted in export and other forex denominated revenue being lower in local terms. Despite these adverse factors, it is pleasing to note that the country’s reported GDP growth for the calendar year 2007 at 6.8 per cent was not a significant slow down from the previous year’s 7.7 per cent, he said.

These factors had a varying impact on the performance of our industry groups. While Transportation, Property, Financial Services, Plantation Services and the holding company recorded improvement in profits, Leisure, Information Technology and Consumer Foods and Retail achieved profits which were lower than that recorded during the previous year, he said.

NSB leads in profits and savings mobilisation

The National Savings Bank (NSB)succeeded in mobilising savings worth Rs. 3,261 million and recorded a pre-tax profit of Rs. 1,351 million in the first quarter of 2008.

Though tight monetory policies, high inflation rate and the competitive market conditions did affect mobilisation of savings adversely, it is a great achievement for the NSB to attain such progress.

The NSB achieved a major breakthrough in the area of Non-Resident Foreign Currency (NRFC) accounts in the first quarter of the year. The bank received an unprecedented amount of inward remittances from Italy and South Korea.

The bank introduced a system through which Sri Lankans resident abroad can send money home in the most efficient, trusted and convenient way at the lowest cost.

A salient feature of this system is that non- resident Sri Lankans can remit funds to other banks in Sri Lanka through the NSB.

Deviation from traditional ways of mobilisation of savings and offering a variety of daily services such as specialised customer services, facility for bill payments, facilitation of inter-branch transactions and installing of an islandwide ATM network and setting up an efficient banking service through state-of-the-art technology contributed immensely to the high growth in savings mobilisation.