United Motors posts Rs. 519.7 million profit after tax in 2007/08

United Motors Lanka PLC (UML) completed yet another successful year, sustaining its consistent record of profitability and growth and the Group as a whole, earned its highest ever profit in the financial year 2007/08 reporting a PAT of Rs. 519.7 million, an increase of 21.2 % over the previous year.

The parent company, UML, reported a turnover of Rs. 5,664.6 million which reflects a growth of 37.5% over the previous year whilst the group turnover of Rs. 8,395.1 million recorded an increase of 24.5%.

UML has maintained a healthy balance sheet with a strong reserve base of over Rs. 2 billion. In addition to the strong financial performance, the company rationalised some of its business operations during the year, trimming costs and improving efficiency, all of which contributed to the increase in profitability during 2007/2008

The high finance cost was one of the biggest challenges the company faced, escalating by over 200% and sharply increasing the stockholding costs.

The depreciation of the rupee against the Japanese Yen by approximately 11% particularly in the latter part of the year increased the cost of vehicle imports.

High inflation and the high cost of borrowings impacted on the purchasing power of customers, which in turn affected sales in the passenger vehicle segment.

A notable feature in 2007/08 was the incremental profit earned as a result of supplying 1,120 Mitsubishi vehicles by UML, to senior government officials who were eligible to import vehicles on concessionary terms.

ICICI Bank assets cross $ 100 billion

The Board of Directors of ICICI Bank Limited approved the audited accounts of the Bank for the quarter ended June 30, 2008.

Core operating profit (operating profit excluding treasury) for Q1-2009 increased 74 per cent to Rs. 2,308 crore (US$ 536 million) from Rs. 1,330 crore (US$ 309 million) for the quarter ended June 30, 2007.

Net interest income increased 41 per cent to Rs. 2,090 crore (US$ 486 million) for Q1-2009 from Rs. 1,479 crore (US$ 344 million) for Q1- 2008.

Fee income increased 37 per cent to Rs. 1,958 crore (US$ 455 million) for Q1-2009 from Rs 1,428 crore (US$ 332 million) for Q1-2008.

The sharp increase in interest rates and adverse market conditions during the quarter had a negative impact of Rs. 594 crore (US$ 138 million) on the Bank's trading portfolio and Statutory Liquidity Ratio (SLR) securities portfolio and its treasury income in Q1-2009.

Despite the negative impact on the Bank's treasury income, profit after tax for Q1-2009 was Rs. 728 crore (US$ 169 million) compared to Rs. 775 crore (US$ 180 million) for Q1-2008.

At June 30, 2008, ICICI Bank and its subsidiaries had consolidated total assets of Rs. 484,643 crore (US$ 112.6 billion).

Savings account deposits increased 35 per cent to Rs. 43,465 crore (US$ 10.1 billion) at June 30, 2008 from Rs. 32,121 crore (US$ 7.5 billion) June 30, 2007. Current and savings account (CASA) deposits constituted 27.6 per cent of total deposits at June 30, 2008 compared to 22.4% at June 30, 2007.

The Bank has significantly expanded its branch network to expand its reach and further enhance its deposit franchise.

At July 21, 2008, the Bank had 1,388 branches and extension counters and 4,233 ATMs.

Hemas turnover up 22% to Rs. 3.8 billion

Hemas Holdings recorded a turnover of Rs 3.8 Bn for the quarter ended June 2008 reflecting a year-on-year growth of 22%; a satisfactory performance in a challenging economic environment.

Although operating profits increased by 10% over the corresponding period to Rs 389.6 Mn, high interest rates continued to exert pressure on the business with finance costs increasing by 22% to Rs 97.8 Mn.

As a result, Profit before Tax increased by a modest 5% to Rs 293.5 Mn. Group tax efficiencies, mainly as a result of the relocation of the FMCG factory to Dankotuwa, contributed to Profit after Tax increasing by 15% to Rs 263.3 Mn for the quarter under review.

The FMCG sector recorded a turnover of Rs 1.1 Bn for the quarter, an increase of 5% over the corresponding period last year whilst post tax profits grew by 7% to Rs 108.3 Mn.

The business witnessed significant cost escalation of input and operating costs and was forced to pass these on by way of price increases. This in turn has negatively impacted volumes, not only for our business but for the industry as a whole.

Baby Cheramy expanded its range by introducing the 'flowers' range during the quarter while Gold hair gel was relaunched with a new look and feel.

During the quarter, manufacturing operations were fully shifted to the new plant in Dankotuwa.

A healthy 28% increase in turnover in the Healthcare sector was recorded in the period under review to Rs 884.4 Mn, primarily driven by the increased sales in the branded generic drug category.

However, profit after tax declined by 19% to Rs 25.4 Mn, mainly on account of start-up costs of the Hospitals together with higher finance costs.

During the quarter, the business won exclusive distribution rights for the pharmaceutical range of Reckitt Benckiser and CCL Pharma further strengthening the business portfolio.

The soft opening of the 100 - bed hospital in Wattala is planned to take place this month with full operations expected to commence in November.

Completion of construction within the budget was a major achievement in the present environment with the focus now shifting to delivering high standards of patient care.

CIMA elects new President

The Chartered Institute of Management Accountants (CIMA) elected a new President, Deputy President and Vice President at its Annual General Meeting (AGM), at the Caf, Royal, London.

Glynn Lowth, FCMA, was elected President at the 89th CIMA AGM.

He has been a member of the Institute's Council for over 18 years and has chaired and served on several of the Institute's committees, including Education and Training, International and Disciplinary.

His previous roles within CIMA include Chairman of the Disciplinary Committee and President of the Nottingham and Derby Branch.

Glynn is currently IT manager for the IT services company of BASF, the world's largest chemical company.