Corporate

DFCC profits up 30 percent

"From a business perspective there is cause for optimism. The upturn was manifest in the last quarter and the newly found confidence was marked by the unprecedented surge in equity prices on the Colombo Stock Exchange," said Chairman, DFCC Group J.M.S. Brito in his statement to shareholders.

Profit at DFCC Bank and Group showed increases to Rs. 1,713 million (26 percent) and Rs. 2,684 million (30 percent) for the year ending 31st March, 2010. Profit attributable to equity holders after minority interest was at Rs. 2,580 million, an increase of 26 percent.

The economic recovery which began in the latter part of the year with improved business confidence did not have an immediate impact on the growth of the bank's credit portfolio due to the lead time required for project formulation and the time lag between approval and disbursement. The total credit portfolio of the bank stood at Rs. 37,562 million, down 10 percent from Rs. 41,858 million.

DFCC Bank continued to raise its stake in environmentally friendly projects.

One of them was the first private grid connected wind power project to be commissioned in Kalpitiya.

The project received a syndicated loan of Rs. 1,100 million and is expected to add 28GWh annually to the national grid.

Another initiative was the first private hydropower project on the Mahaweli system. In January, The bank sold its entire shareholding in Lanka Ventures PLC (LVL) to Acuity Partners (Pvt) Limited, a joint venture company equally owned by DFCC Bank and Hatton National Bank PLC yielding a profit of Rs. 284 million and after tax added Rs. 142 million to consolidated profit.

DFCC Bank's income includes a dividend of Rs. 423 million from the Commercial Bank of Ceylon PLC (CBC), its associate company. The market value of DFCC's investment as at 31st March 2010 was Rs. 13,536 million compared to the cost of the investment, which was Rs. 3,152 million.

Considering other subsidiaries, associate company-NAMAL and joint venture - Acuity Partners (Pvt) Ltd., the collective contribution to profit after tax was Rs. 77 million.

The bank continued the expansion of its network and moved into Ampara, Batticaloa and Jaffna, while two more branches are to be opened in Trincomalee and Vavuniya in 2010. Branch operations will also be expanded in the south and an office in Hambantota is planned. DFCC Vardhana Bank (DVB) continued to expand its reach and has 44 branches and 30 post office banking units.

During 2009, DVB reported growth in key areas of operations.

Total assets amounted to Rs. 31,336 million reflecting a 26.3 percent growth. The loans and advances portfolio contracted by 3.5 percent to Rs. 14,544 million due to low demand for credit. DVB's profit before tax amounted to Rs. 598 million while profit after tax was Rs. 268 million reflecting a growth of 141 percent.

Chief Executive, DFCC Bank Nihal Fonseka in his statement said: "In the coming year we will focus on the challenge of delivering on our development mandate while ensuring that our business model will ensure value addition to all stakeholders."

On the March 31, 2010. the DFCC stock was trading at Rs. 187.50 at the Colombo Stock Exchange, an increase of 165 percent from the same day last year.

Aitken Spence records Rs 2.08b net profit

Aitken Spence PLC recorded a net profit of Rs. 2.08 billion for 2009/10, showing an increase of 1.8 percent from last year. Revenue stood at Rs. 24.4 billion. The operating profit was Rs. 4.0 billion while the net profit after tax was Rs. 3.0 billion. Results showed an earnings per share of Rs. 76.73, up from Rs. 75.37. The company announced a dividend per share of Rs. 10, which increased from Rs. 9.50 last year.

The share price at the year end stood at Rs. 1,373.75 which represents a remarkable growth of 336.1 percent from a year ago.

Chairman, Aitken Spence PLC, D.H.S. Jayawardena said: "Despite the economic downturn worldwide and a year full of challenges faced by the country, I am proud of the company's performance which recorded the highest ever profit attributable to shareholders.

2010/11 will see Aitken Spence embark on a new phase in its expansion. The Group remains committed to play its part in the nation building agenda of the Government. Our expansion plans will encompass the North and the East".

The Group's maritime transport, integrated logistics, printing and tourism segments were the main drivers of growth.

Aitken Spence Hotel Holdings PLC., the investing company of Aitken Spence Hotels, has approached its shareholders to raise Rs. 2.5 billion through a rights issue which was successfully concluded recently. The funds will be used for high priority expansion projects and a smaller portion of the funds for the development of a high-end resort in Kerala, a joint venture with an Indian partner. "We intend developing the 100 acre beach front property at Nilaveli. A hotel in Jaffna, where there is presently a dearth of high quality accommodation for international and domestic travellers, is in the pipeline.

The Group explores new opportunities for management of hotels in other regions, including those in which we already have a presence", said Deputy Chairman and Managing Director, J.M.S. Brito.

Although Sri Lankan resorts made losses during the first half of the year, the second half showed a much improved performance.

Aitken Spence refurbished and rebranded its hotel in Kandapola as Hesitance Tea Factory while the Adaaran Prestige Vadoo commenced operations in the Maldives. The Group acquired Ramada Resort, formerly known as Golden Sun Resort, in Kalutara which was earlier only a managed property.

Neptune Hotel, the Group's first ever resort property was converted into a sixty four roomed specialised Ayurveda and wellness resort and is due to open in December.

The destination management segment made a strong performance during the year as tour operators, increasing their volumes due to peaceful conditions.

Maldives fared better than last year, even though global conditions continued to impact the market.

The Group's airline GSA business for Singapore Airlines and Kingfisher Airlines reported losses due to reduced flights and reduced airfares combined with the negative conditions worldwide.

Maritime operations in the African continent widened with the award of a ship planning contract involving several South African ports.

The power segment performed well. The Group continues to pursue green and alternative energy projects and has commenced a hydropower project in Matale.

The integrated logistics segment performed well and made several investments in expanding its container freight station and warehousing facilities.