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- Research Department .
JKSB Sri Lanka Market Strategy_February 2020
The dominant services sector which accounts for a share of about 60% of total GDP recorded growth of 4.1% for Q1, 1.6% for Q2 and then a slight rebound in Q3 to 2.8%. Telecommunications and IT segments have maintained strong double digit growth momentum over the six months. Accommodation, food and beverages services, transportation of goods and passengers as well health and education all saw declines in Q2. Growing demand for IT services together with the digitalization initiatives introduced in...
- Dishan Leo
JKSB: Quarterly Highlights: Teejay Lanka PLC (TJL): 1QFY20
TJL concluded a strong 1QFY20 recording a sharp growth in earnings by 62.40%. Topline grew by 19.15% during the quarter mainly due to 1) better capacity utilization 2) stronger order book and 3) acquisition of strategic customers which supported healthy quarterly earnings growth. Revenue growth was predominantly through volume growth of 6%, sales mix contribution of 1% alongside the depreciation of the rupee which further contributed 13% to overall revenues. GP margins saw an expansion from 10.4...
- Gowtham Gunasekaran
JKSB: Quarterly Highlights: People's Insurance PLC (PINS): 2QCY19
PINS reported a 41% YoY increase in earnings for 2QCY19, mainly due to significantly improved underwriting results (+1205% YoY) and increased total other revenue (+27% YoY) despite sharply higher income tax expenses (+190% YoY). A 10% YoY growth in GWP amid a marginal increase in net claims (+2% YoY) drove underwriting results. The growth in total other revenue was largely attributable to the growth in interest & dividend income (+18% YoY). Growth in GWP (+13% YoY) during 1HCY19 supported mainly...
- Gowtham Gunasekaran
JKSB: Quarterly Highlights: Overseas Realty (Ceylon) PLC (OSEA): 2QCY1...
Modest growth in rental income (+9% YoY) along with strong support from sale of apartments (+79% YoY) has resulted in a 43% YoY growth in total revenue during the first half of the year. Sharply higher cost of sales of apartments (+99% YoY) during 1HCY19 was from higher construction costs through taxes & levies on imports and building materials as well as the steep depreciation of the SL rupee. Construction costs in Sri Lanka are 30-50% higher than in regional countries. Significant tax expenses...
- Chiranthaka Suraweera
JKSB: Quarterly Highlights: Aitken Spence Hotel Holdings PLC (AHUN): 1...
AHUN posted a marginal decline in revenues (-0.9% YoY) during 1QFY20 due to lower contributions from the Sri Lankan hotels & resorts sector stemming from the Easter Sunday attacks. Revenues from the Sri Lankan sector declined 27% (YoY) to Rs.747mn during the quarter while the South Asian and Middle East sector revenues grew by 9% (YoY) to Rs.2.8bn. Amortization expenses grew significantly (+437% YoY) to Rs.157mn during the quarter while other operating expenses declined by 8% (YoY) to Rs.2.1bn. ...
- Dishan Leo
JKSB: Quarterly Highlights: Piramal Glass Ceylon PLC (GLAS): 1QFY20
Piramal Glass Ceylon PLC is a subsidiary owned by Piramal Glass Private Limited (India) with a stake amounting to 56.45%. GLAS predominantly focuses on the domestic market together with an increase in its footprint around regions such as India, Australia, Malaysia, Africa, Pakistan, Vietnam, USA and Canada with its introduction of new designs in varying shapes, sizes & colors. GLAS continues to focus on creating a sustainable export market by increasing its footprint globally to ensure it can ne...
- Dishan Leo
JKSB: Quarterly Highlights: Hemas Holdings PLC (HHL): 1QFY20
HHL concluded 1QFY20 posting a decline in revenues (-2.3% YoY) while profits saw a sharp contraction by 199.9% (YoY) mainly due to 1) the economic slowdown seen overall in the aftermath of the Easter Sunday attacks, 2) impacts to the business mix which saw high margins segments such as FMCG been severely affected during the quarter, 3) losses in the leisure segment due to the after effects from tourism with a sharp drop in arrivals in the months of May and June and 4) overall subdued consumer en...
- Chiranthaka Suraweera
JKSB: Quarterly Highlights: Odel PLC (ODEL): 1QFY20
ODEL recorded a marginal growth in revenue (+3.1% YoY) during the quarter mainly due to the impact endured by the retail industry from the Easter Sunday attacks. GP margins remained largely flat while EBIT margins declined significantly from 11% to 0.2% (YoY) during the quarter primarily from an increase in admin expenses (+26.6% YoY). Sharply higher finance costs (+88.7% YoY) resulted in ODEL posting a loss before tax of Rs.234Mn during 1QFY20. We currently project ODEL’s full year FY20E earn...
- Chiranthaka Suraweera
JKSB: Quarterly Highlights: Softlogic Holdings PLC (SHL): 1QFY20
SHL concluded the first quarter of FY20 posting revenue growth of 7.2% (YoY) where the Financial Services segment (+20.0% YoY) was the core contributor. The unprecedented Easter Sunday attacks resulted in a severe impact on the Group’s Retail, Healthcare and Leisure segments during the quarter. GP margins improved from 36.3% to 37.1% (YoY) during the quarter although EBIT margins declined from 11.7% to 10.0% (YoY) due to higher operating expenses (+17.2% YoY) resulting from the opening of Asiri ...
JKSB: Full Year Highlights: Watawala Plantations PLC (WATA): FY19
FY19 was a year of transition to a new business model for WATA focusing on two products palm oil and milk. Reduction in turnover and profits during the year are attributable to the segregation of the tea business at the end of 2QFY18. GP and EBIT margins expanded from 25% to 37% and from 24% to 34% (YoY) respectively for the Group during FY19. Dairy segment which commenced business from 4QFY18 posted revenues of Rs.493Mn during FY19. We currently project WATA’s full year FY20E earnings to reac...
- Chiranthaka Suraweera
JKSB: Full Year Highlights: Haycarb PLC (HAYC): FY19
HAYC is a pioneer manufacturer of coconut shell based activated carbon and has established itself both locally and internationally as a premium solutions provider. The core business segments of the Group are activated carbon and environmental engineering. HAYC concluded FY19 posting healthy growth in revenues (+34.8% YoY) while earnings improved by 42.1% YoY to Rs.955Mn. The activated carbon segment made a strong contribution to profitability with PBT increasing 79% YoY to Rs.1,302Mn during the ...
- Chiranthaka Suraweera
JKSB: Full Year Highlights: Singer (Sri Lanka) PLC (SINS): FY19
FY19 was a challenging year for the Group due to subdued growth in economic activity and per capita income affecting the consumer durables industry adversely. SINS is the largest retailer, financier and manufacturer of consumer durables with 442 retail stores in the country. Negative growth in high margin items coupled with higher discounts on slower moving items resulted in GP margins for the Group contracting from 27.96% to 27.52% (YoY) during the year. Increases in exchange losses and finance...
- Chiranthaka Suraweera
JKSB: Full Year Highlights: Softlogic Holdings PLC (SHL): FY19
SHL posted revenue growth (+14% YoY) during the year despite weak economic conditions. Volume growth supported GP to increase by 17% (YoY) during FY19. Increases in distribution expenses (+13.06% YoY) and admin expenses (+19.23% YoY) resulted in a relatively flat operating profit during the year. Finance expenses increased (+19% YoY) due to higher borrowings and sharp depreciation of the rupee. We currently project SHL’s full year FY20E to reach Rs.30Mn. Subdued economic activity coupled with ...
- Gowtham Gunasekaran
JKSB: Quarterly Highlights: Ceylinco Insurance PLC (CINS): 1QCY19
CINS reported a 44% YoY decline in quarterly earnings for 1QCY19 mainly due to significantly larger transfers to the Life Fund during the quarter, a 14% YoY increase in insurance claims and benefits (continuing the trend of increased payments for life insurance contract maturities and surrenders seen in CY18) and a steep increase in income tax expenses. Earnings for the quarter shrunk in the LI and GI segments by 52% and 36% YoY, respectively. The education segment reported a contraction in earn...
- Gowtham Gunasekaran
JKSB: Quarterly Highlights: Central Finance PLC (CFIN): 4QFY19
CFIN reported a 38% YoY decline in earnings for 4QFY19 with significantly higher impairment charges (+2499% YoY) eroding improved total operating income (+16% YoY). Full year earnings declined by 7% YoY mainly due to the higher impairment charges despite healthy growth in topline. NII grew by 15% YoY during FY19 supported by increased leases in 2QFY19 & 3QFY19 while other revenue grew by 20% YoY during the year supported by increased contributions from the manufacturing and trading segment (+21%...
- Gowtham Gunasekaran
JKSB: Quarterly Highlights: Citizens Development Business Finance PLC ...
CDB concluded the fourth quarter of FY19 with a marginal decline in earnings stemming from significantly higher total taxation upon the introduction of the Debt Repayment Levy in October 2018 and higher operating expenses, despite healthy growth in NII and net fee & commission income coupled with a steep reduction in impairment charges owing to an aggressive recovery campaign during the quarter. We project full year earnings of Rs.1.3bn for FY20E (-30% YoY). We expect CDB to increase its expos...
- Dishan Leo
JKSB: Full Year Highlights: Dipped Products PLC (DIPD): FY19
Dipped Products PLC (DIPD) is one of the global leaders in protective wear which serves close to 5% of the global demand for natural, synthetic and latex based household and industrial gloves. The company broadly operates under the hand protection and plantations segments which concluded a successful financial year with group turnover increasing to Rs. 30,089mn (+6% YoY). The plantation segment grew by 4% during the year through strong contributions from its subsidiaries Kelani Valley Plantation...
- Dishan Leo
JKSB: Full Year Highlights: Access Engineering PLC (AEL): FY19
AEL reported a marginal decline in PAT (-1.07% YoY) for FY19 amid moderate growth in top line (+23.78% YoY) supported by steady order book growth for the company. Gross margins improved slightly from 15.59% to 16.04% during FY19 while margins for 4QFY19 contracted 56 ppt to 14.20%. Operating margins witnessed a sharp decline from 17.74% to 11.70% during FY19 owing to a FV gain on investment property in FY18. An increase in net finance costs by 70.06% YoY during FY19 further added pressure to the...
- Chiranthaka Suraweera
JKSB: Full Year Highlights: Aitken Spence PLC (SPEN): FY19
SPEN recorded a modest growth in net revenues (+5.6% YoY) for FY19, while earnings improved by 14.5% YoY to Rs.4,077Mn. The growth in top line was mainly due to the performance of the tourism segment which recorded a healthy increase (+10% YoY) during the year. The Group derives almost a third of its revenues from overseas operations. EBIT for the Group grew 13.21% YoY to Rs.8,016Mn where EBIT margins increased from 13.43% to 14.40% (YoY). We currently project SPEN’s full year FY20E earnings t...
- Chiranthaka Suraweera
JKSB: Full Year Highlights: Hayleys PLC (HAYL): FY19
HAYL posted revenue growth of 11% for 4QFY19, amid sluggish conditions in the consumer & retail segment which accounted for 26% of the Group’s revenue during the quarter. Transportation & Logistics posted a healthy growth in top line while EBIT margins remained flat. Consumer & Retail and Purification segments witnessed contractions in EBIT margins from 6.60% to 4.49% and 8.43% to 7.65% respectively (YoY). During the quarter, HAYL disposed the entire shareholding of Hunas Falls Hotels PLC, resul...
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