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  • 25% dividend level maintained despite lower profits
    Ceylon Tea Services clears Russian setback hurdle
    Ceylon Tea Services Ltd., the Merril. J. Fernando company, has survived what its chairman/managing director called "a severe setback in Russia'' to post an after-tax profit of Rs. 108.2 million and maintain its previous year's 25% dividend level to shareholders during the year ended March 31, 1998.
    The company has caught-up much of the lag in its operational profits, down to Rs. 23 million from the previous year's Rs. 127 million on other income which had surged to Rs. 109.4 million from Rs. 41.1 million the previous year.
    Much of these earnings had come from its associate, Dilmah Fine Teas and Herbs (Pvt.) Ltd. which in the words of Merril Fernando "performed remarkably well to record excellent earnings in a very difficult market.''     (full story)
  • Locals take 7%
    Aitken Spence finalises Rs. 735 mn. share issue
    Aitken Spence and Co. Ltd. last week finalised its new share offer infusing Rs. 735 million cash into the company with foreign investors particularly demonstrating confidence in the company's high growth potential. Locals took up 7% of the issue amounting to 490,000 shares.
    "We are home and dry,'' said Ratna Sivaratnam, the company's chairman and managing director. "Given the market conditions, it was a substantial achievement and governmental authorities as well as businessmen have said as much.''
    The new equity placed at Rs. 105 a ten-rupee share will dilute the company's existing issued capital of Rs. 193.8 million by 36% with the issue of slightly over 7 million new shares.     (full story)
  • IMF and the Asian Crisis I
    The failure of IMF prescribed reforms to revive the ailing economies and the prospects of declining growth, increasing unemployment and acquisition of national assets by foreign investors have combine to create in Asia a backlash against liberalization, privatization and globalization and disillusionment with free markets. Flight of speculative capital which precipitated devaluation and crash of stock markets have demonstrated to the Asians that openness has advantages as well as disadvantages and it leaves them with no defence at all in a major financial crisis except running to the IMF to get help in return for loss of economic sovereignty.

    The increasing bankruptcies, growing inadequateness, lack of liquidity, empty office buildings and apartment blocks, retrenchment and social unrest are a grim reminder of the hitherto hidden dark side of liberalization. The Thai Premier Chuan Lekpai referring to Bangkok's reticence to open the doors of its markets more fully to foreign competition, stated, "We are not fully ready for full globalization and liberalization - therefore we have to take measures to protect our people from its full impact". (full text)

  • Arrivals dip, but resort hotels maintain occupancy levels
    Although tourist arrivals during the first half of this year have dipped, resort hotel occupancies remain unaffected according to a sector review by John Keells Stock Brokers.
    The analysis said that arrivals from Europe, which contribute about 60% of the total, have grown by 16.5%, while visitors from Asian countries had declined 27%. The big western European traffic generators, Germany, UK and France, have all sent more visitors with German arrivals topping the list.     (full story)
  • Central Finance buys into Balangoda Plantations
    Central Finance Ltd. (CF), the dominant player in the country's finance company sector, and some of its unquoted subsidiaries last week bought a 19% parcel of Balangoda Plantations Ltd. at Rs. 40.50 a ten-rupee share increasing its stake in the tea sector.

    The shares were offered on the Colombo Stock Exchange by PERC on behalf of the Secretary to the Treasury. As Balangoda has already announced a 30% dividend, and the parcel was bought cum dividend, CF will next month recover Rs. 17 million on the purchase consideration of around Rs. 170 million from the dividend income.

    CF already owns 20% of Tea Small Holders Factories Ltd. (TSHFL), acquired over a year ago at a relatively low price. This entitles the company to account for TSHFL profits in its books on an equity basis. It will increase its Balangoda holding to 20% to similarly enable it to equity account that company in the CF books, Central Finance Chairman Chandra Wijenaike said. (full story)

  • Strong first quarter at Richard Pieris
    Richard Pieris and Co. Ltd., which has now achieved conglomerate status on the local bourse, has posted a strong first quarter performance during the current financial year with an operating profit of Rs. 81.3 million - nearly double its earnings a year earlier.

    After discounting interest expenses of Rs. 27.9 million (Rs. 30.5 million in the first quarter of the previous year), the results look even better. The after interest operating profit for the period under review of Rs. 53.4 million compared with Rs. 10.4 million a year earlier.

    Other income at Rs. 2.7 million was down slightly from Rs. 3 million in the corresponding period the previous year while the profit share from associated companies had grown to Rs. 61 million from Rs. 55.4 million a year earlier. (full story)

  • The Colombo -Katunayake Expressway a White Elephant waiting to be born
    "The Island" of Aug.15 reported that international tenders are to be called, for the construction of the Colombo-Katunayake Expressway, within the next two months.

    The original project report, prepared by the Road Development Authority in June 1997, estimated the cost at Rs. 5 billion.

    According to the newspaper the cost is expected to be Rs. 15 billion when it was not so long ago estimated at Rs. 5 billion.

    The project report estimated the returns from the project on the lower figure. Many knowledgeable persons said that the progress report had under-estimated the cost and expressed the view it would be double. Now the Minister says it will be treble the cost. (full text)

  • No profit from Glaxo's tender sales to govt.
  • Regnis getting over effects of last year's strike
  • Singer confident of carrying strong mid-year showing to year-end
  • Plantations catch up lag in gloves at Dipped Products
  • Reuters launches pocket-size work station
  • Amico wins a Silver for exports

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