performance Archives - Page 2 of 7

November 13, 2023

Consolidated revenue of Rs.28.2 billion, up13%
PAT increased by 15.4% to Rs. 3.6 billion
Healthcare revenue up 19.2% YoY to Rs.13.8 billion
Consumer revenue up 13.2% YoY to Rs.9.7 billion
Agribusiness revenue increased to Rs.4.6 billion

November 10, 2023: Diversified Sri Lankan conglomerate Sunshine Holdings PLC (CSE: SUN) continued to demonstrate resilience amidst prevailing macro-economic conditions, reporting solid top-line and bottom-line growth of 13.0% and 15.4% YoY. The Group recorded a consolidated revenue of Rs.28.2 billion during the first half of the current financial year (1HFY24) with Profit after tax (PAT) increased to Rs.3.6 billion as a result of lower finance costs during the period. The revenue increase was mainly due to robust revenue growth in key sectors of the Group —Healthcare, Consumer and Agribusiness.

The Group’s Healthcare sector emerged as the largest contributor to Sunshine’s top-line, accounting for 49.2% of total revenue, with Consumer at 34.4%, and Agribusiness 16.3% of the total revenue.

Commenting on the performance, Sunshine Holdings PLC Chairman Amal Cabraal remarked that “amidst a business landscape where there was a positive shift in key macroeconomic indicators such as reduced inflation, lower interest rates, and the strengthening of the Sri Lanka Rupee, its pleasing to note the Group’s strong performance in 1HY24. The substantial growth in both revenue and profit can be attributed to the resilient contributions from all business sectors. Lina Manufacturing, acquired in a strategic merger with Akbar Pharmaceuticals in 2020, played a pivotal role in boosting the Group’s overall performance during the first half.”

Healthcare

During the period in review, Group’s Healthcare sector posted revenue of Rs. 13.8 billion during the first half, a significant increase of 19.2% YoY backed by the increased top-line of all business units under the sector. Pharma segment revenue grew by 4.1% YoY and the Medical Devices segment grew by 51.0% YoY driven by both price and volume increase. Revenue of the Retail segment saw a 17.6% YoY increase, fueled by an improved footfall of 14.0% compared to the previous year.

Lina Manufacturing, the Pharma manufacturing business of the Group, recorded an impressive revenue growth of 203.5% YoY, mainly driven by higher volumes in the Metered Dose Inhaler (MDI) plant. Group’s Healthcare sector EBIT was Rs. 2.1 billion.

Consumer

The consumer sector, which includes both export and domestic business, reported a 13.2% YoY increase in revenue to close at Rs. 9.7 billion in 1HFY24. Consumer local business showcased strong performance in 1HFY24 with Group’s consumer brands continued to grow market shares. Combined Tea category experienced a volume growth of 11.5% YoY and a value growth of 84.4% YoY. The confectionery segment revenue declined by 13.8% YoY, despite an increase in price, due to a volume contraction of 26.8% YoY. PAT from the Consumer segment increased by 32.5% YoY due to the growth in local business.

Agribusiness

The Agribusiness sector of the Group, represented by Watawala Plantations PLC (CSE: WATA), reported a revenue of Rs. 4.6 billion, up by 0.4% YoY. The revenue growth was driven by the increase in palm oil volumes despite the dip in prices in line with the drop in global commodity prices. The PAT of the Agri sector closed at Rs.1.7 billion for 1HFY24, down by 15%. YoY Dairy business revenue grew by 37.8% YoY due to increases in both sales volume and milk price.

About Sunshine Holdings

Sunshine Holdings PLC is a publicly listed conglomerate contributing to ‘nation-building’ by creating value in vital sectors of the Sri Lankan economy – mainly in the healthcare and consumer sectors, with strategic investments in agribusiness.

Established over 56 years ago in 1967, the Group is now home to leading Sri Lankan brands such as Zesta Tea, Watawala Tea, Ran Kahata, Daintee, Milady, Healthguard Pharmacy and Lina Manufacturing, with nearly 2,000 employees and revenue of LKR 51 billion. The business units comprise of Sunshine Healthcare Lanka, Sunshine Consumer Lanka, and Watawala Plantations PLC, which are leaders in their respective sectors and most of them certified as a “Great Place to Work” in 2023.

We believe that the purpose of our existence is to “Bring good things to life” and that means, we will make available to all Sri Lankans, quality medicines and consumer products at affordable prices therefore ensuring a better quality of life for all. Our growth has been defined by our commitment to conduct our business ethically and staying true to our values.

November 13, 2023

Group Total operating income up by 43% to LKR 31 Bn
Group records Operating Profit Before Taxes on Financial Services of LKR 11 Bn.
Group PAT of LKR 7 Bn
Impairment charge of LKR 12 Bn reflective of present economic stresses

During the period under review, DFCC Bank remained committed to providing high-quality, customer-centric banking services across the country despite facing unprecedented challenges that affected the banking industry. As a result of this dedication, the Bank has recorded a strong performance for the Q3 of 2023.

The Central Bank of Sri Lanka’s (CBSL) timely policy rate relaxation has enabled downward adjustments to the historically high-interest rates, and improved economic conditions would help boost credit flows to the economy in the period ahead. Meanwhile, a reduction was also observed in the yields on government securities with falling risk premia following the finalisation of the debt treatment on rupee-denominated instruments under the domestic debt optimisation (DDO) programme.

The Bank has aligned with the CBSL guidelines and reduced lending and deposit rates to pass the benefits of the continued easing of monetary conditions to individuals and businesses adequately and swiftly, thus supporting the envisaged rebound of the economy.

The following commentary relates to the unaudited Financial Statements for the period ended 30 September 2023, presented in accordance with Sri Lanka Accounting Standard 34 (LKAS 34) on “Interim Financial Statements”.

Financial Performance

Profitability

DFCC Bank PLC, the largest entity within the Group, reported an Operating Profit Before Taxes on Financial Services of LKR 10,693 Mn, Profit Before Income Tax (PBT) of LKR 8,305 Mn and a Profit After Tax (PAT) of LKR 5,498 Mn for the period ended 30 September 2023. This compares with an Operating Profit Before Taxes on Financial Services of LKR 2,269 Mn, PBT of LKR 1,420 Mn and a PAT of LKR 1,043 Mn in Q3 of 2022. The Group recorded an Operating Profit Before Taxes on Financial Services of LKR11,069 Mn, PBT of LKR 9,938 Mn and PAT of LKR 7,064 Mn for the period ended 30 September 2023 compared to 2,612 Mn, LKR 1,762 Mn and LKR 1,320 Mn, respectively, in 2022. All the member entities of the Group made positive contributions to this performance. The Bank’s Return on Equity (ROE) increased to 11.66% during the period ended 30 September 2023 from 5.04% recorded for the year ended 31 December 2022. The Bank’s Return on Assets (ROA) before tax for the period ended 30 September 2023 is 1.76% compared to 0.46% for the year ended 31 December 2022.

Net Interest Income

The Bank’s Net Interest Income (NII) increased 26% over Q3 of 2022 to reach LKR 23,655 Mn by the end of September 2023. Both deposit and lending interest rates have continued to adjust downwards with the broader guidelines provided by the Central Bank in line with the relaxed monetary policy stance of the Central Bank. Accordingly, the Bank has reduced both lending and deposit rates to pass on the benefits of the continued easing of monetary conditions to individuals and businesses adequately and swiftly, thereby supporting the envisaged rebound of the economy. While lower interest rates may have resulted in reduced interest income and expenses, in nominal terms, Net Interest Income (NII) has continued to improve as a metric during the period under review as a result of the Bank’s strategy of investing in high-yield government securities.

Strategically, the Bank thus increased its fixed-income investment portfolio, contributing significantly to increased interest income. The interest margin increased from 4.95% in September 2022 to 5.45% by September 2023.

Fee and Commission Income

The Bank’s dynamic strategies and the efforts of its dedicated teams led to increased remittances, trade-related commissions, and other fee income lines, which contributed to the increase in non-funded business during the period. Fee income generated by credit cards also increased significantly, in line with the volume of the transactions. Accordingly, net fee and commission income have increased by 40% to LKR 2,848 Mn for the period ended 30 September 2023, compared to LKR 2,031 Mn for the comparative period in 2022.

Impairment Charge on Loans and Other Losses

The impaired loan (stage 3) ratio increased from 4.36% in December 2022 to 6.13% as of 30 September 2023, continuing the prevalent trend amidst the present economic conditions. However, the Bank expects this trend to moderate and potentially improve towards the end of the year, reflecting positive developments in the macroeconomic environment coupled with the Bank’s concerted efforts regarding recoveries. To address the current and potential future impacts of the present economic conditions on the lending portfolio, the Bank made adequate impairment provisions during the period by introducing changes to internal models to account for unseen risk factors in the present highly uncertain and volatile environment, including additional provisions made for the Bank’s exposure to risk elevated sectors.

The Bank has used significant judgment using the information available at the reporting date to estimate the recoverable value of foreign currency-denominated investment securities issued by the Government of Sri Lanka. Accordingly, an impairment charge has been recognised to maintain a provision cover of 45% on the above investments.

Accordingly, with these provisions to address the additional risks in the economic environment, the impairment charge recorded at LKR 12,113 Mn for the period ended 30 September 2023, compared to LKR 11,962 Mn in the comparable period.

Operating Expenses

Operating expenses for the period ended 30 September 2023 increased to LKR 8,370 Mn compared with LKR 7,382 Mn during the corresponding period in 2022, primarily due to the increase in inflation. However, the Bank has taken numerous cost control measures within the Bank, resulting in operating expenses being curtailed and managed at these levels.

Other Comprehensive Income

Changes in the fair value of investments in equity securities and fixed-income securities (treasury bills and bonds) and movement in hedging reserves are recorded through other comprehensive income. Due to the application of hedge accounting, the impact on the total equity of the Bank due to exchange rate fluctuation was minimised. A fair value gain of LKR 6,431 Mn was recorded on account of equity securities outstanding as at 30 September 2023. The increase in the share price of Commercial Bank of Ceylon PLC during the period was the main contributor to the reported fair value gain in equity securities. The favourable movement in treasury bills and bond yields also resulted in a fair value gain of LKR 3,239 Mn during the period.

Business Growth

Assets

Despite the challenges faced by the economy and the banking sector, DFCC Bank’s total assets increased by LKR 28.7 Bn, recording a growth of 5.07% from December 2022. In line with the Bank’s growth strategy and the present economic climate, an increase in investment in fixed-income securities, combined with positive fair value movement in both fixed-income securities and equity securities, has contributed to a 100% increase in investment in financial assets at fair value through other comprehensive income as of 30 September 2023 compared to the balance as of 31 December 2022. With increased provision for expected credit losses, appreciation of the Sri Lanka Rupee compared to 31 December 2022 and considerable economic challenges, the net loan portfolio was recorded at LKR 335 Bn as at 30 September 2023, which is 9% lower than the balance as at 31 December 2022.

Liabilities

The Bank’s deposit base experienced a growth of 5.75% during the period, recording an increase of LKR 21.3 Bn to LKR 392 Bn, up from LKR 370 Bn as at 31 December 2022. This resulted in recording a loan-to-deposit ratio of 96.98%. Further, the CASA ratio was 22.20% as at 30 September 2023. The Bank’s funding costs were also contained using medium to long-term concessionary credit lines, primarily used to grow the lending portfolio. Taking into consideration these concessionary term borrowings, the CASA ratio further improved to 33.12%, and the loans-to-deposit ratio improved to 83.37% as at 30 September 2023.

Equity and Compliance with Capital Requirements

DFCC Bank’s total equity increased to LKR 65 Bn as at 30 September 2023, supported by favourable movements in the equity portfolio and fixed income security portfolio classified as fair value through other comprehensive income, and positive movements in the hedging reserve, together with the recorded profit after tax of LKR 5.5 Bn. Accordingly, Tier 1 and Total Capital ratios improved to 11.090% and 13.722%, respectively, by 30 September 2023, compared to 10.085% and 13.148%, respectively, as at 31 December 2022. The Bank’s Net Stable Funding Ratio (NSFR) was 135.63%, and Liquidity Coverage Ratio (LCR) – all currency – was 463.22% as at 30 September 2023, compared to 126.55% and 202.34%, respectively, as at 31 December 2022. All these ratios were thus maintained well above the minimum regulatory requirement.

CEO’s Statement

“DFCC Bank’s strong performance in Q3 of 2023, as evidenced by a remarkable 43% increase in total group operating income, underscores our commitment to delivering exceptional banking services in challenging times. We’re optimistic about the future, thanks to the Central Bank’s supportive policies, lower interest rates, and improved economic conditions. While facing external challenges and ongoing economic stresses, our prudent strategies have led to a significant boost in profitability, growth in assets, and improved equity positions. We remain steadfast in our mission to navigate the volatile business environment and continue supporting our valued customers and the nation’s economy.”

Thimal Perera

Director / Chief Executive Officer

9 November 2023

November 13, 2023

Sherin-Cader-Chairperson-Hemantha-Gunetilleke-Director-Chief-Executive-Officer-of-Nations-Trust-Bank-LBN.jpg

Operating Income of LKR 34.2Bn up 24% YoY
Profit Before Tax at LKR 19.4Bn, up 108%
Profit After Taxes at LKR 9.4Bn, up 78%
Return on Equity increased to 24.3%, Earnings Per Share improved to LKR 29.53
Liquidity Ratio at 43.49%, Tier 1 Capital Adequacy ratio at 13.95%

Colombo, November 11, 2023 – Nations Trust Bank continued its solid financial performance into the third quarter of 2023, with a Profit Before Tax (PBT) of LKR 19.4Bn and a Profit After Tax (PAT) of LKR 9.4 billion, a YoY increase of 78% for the nine months ended 30 September. The bank recorded a 24% YoY growth in Operating Income for the nine months, supported by higher net interest income and fees as well as substantially lower impairment charges.

Hemantha Gunetilleke, Director and Chief Executive Officer of Nations Trust Bank said, “We’re pleased to report a strong result for the 9 months to 30 September 2023, highlighting steady growth across our customer segments and gains in market share. The Bank’s strengths lie in its continued focus on digital empowerment, robust risk management models and a strong capital base, in addition to healthy liquidity buffers”.

Nations Trust Bank’s financial position remained strong with Tier 1 Capital Adequacy ratio at 13.95% and Total Capital Adequacy at 15.61% against regulatory requirements of 8.5% and 12.5% respectively. The Statutory Liquid Asset Ratio was 43.49% as of 30 September, well above the regulatory requirement of 20%.

Proactive investment management, yields from fixed income securities, combined with the efficient cost of fund management, contributed to the growth in Net Interest Income (NII). The utilization of low-cost funds generated through FX Swaps further enhanced interest margins, while Fee-Based Income also experienced steady growth.

The Return on Equity (ROE) increased from 17.1% in December 2022 to 24.3% as of 30 September 2023. The bank’s Earnings Per Share (EPS) also improved significantly, reaching LKR 29.53 for the 9 months ending 30 September of 2023, compared to 16.56 during the same period last year.

Nations Trust Bank PLC serves a diverse range of customers across Consumer, Commercial and Corporate segments through multi-channel customer touch points spanning both physical and digital. The Bank is focused on digital empowerment through cutting-edge digital banking technologies, and pioneered FriMi, Sri Lanka’s leading digital banking experience. Nations Trust Bank PLC is an issuer and sole acquirer of American Express Cards in Sri Lanka with market leadership in the premium segments.

October 30, 2023

Colombo, October 27, 2023 – Expolanka Holdings PLC have announced its financial performance for the quarter ending 30th September 2023, having successfully navigated through challenging market conditions, demonstrating resilience and adaptability while focusing on long-term strategy.

During the quarter under review, Expolanka Holdings reported a Revenue of Rs. 61.5 billion, with a Gross profit of Rs. 12 billion and a Net loss of Rs. 1.5 billion. For the first half of FY24, the company recorded a revenue of Rs. 117 billion, a Gross profit of Rs. 23.3 billion and a Net loss of Rs. 7.1 billion.

Persistent market challenges continued into the quarter, including high inflation, geopolitical tensions, protectionism, climate concerns and elevated energy costs, causing curtailed demand. The weakening in worldwide commerce due to uncertainty and inflationary pressures dampened consumer and business spending. The economic outlook remained clouded due to the complexity of issues weighing on global growth.

Performance for the quarter was driven by the logistics sector, having recorded a Revenue of Rs. 59.2 billion and a Gross profit of Rs. 11.3 billion. Air and ocean freight volumes declined due to low consumer demand and high retail inventory levels impacting the results. However, Expolanka’s strong customer relationships and network enabled it to maintain market share. The sector delivered a Revenue of Rs. 112.6 billion, a Gross profit of Rs 21.9 billion and a Net loss of Rs. 7.4 billion for the first half of the financial year.

In the period under review, low consumer demand and elevated retail inventory levels have led to reduced retail orders, impacting EFL’s volumes in both Air and Ocean portfolios. While freight capacity improved from its pandemic premium, the increase created excess capacity, causing a sharp decline in freight rates.

However, EFL Global has adapted to the challenging market conditions by maintaining close relationships with existing key accounts and actively pursuing new customers. Despite a decline in volumes due to reduced imports, the company’s strong network presence and customer-centric approach has enabled it to navigate the challenging times.

Expolanka’s strategic focus on enhancing the service portfolio and domestic logistics capabilities have also yielded positive results, with many customers benefiting from the offerings. Recent acquisitions, Trans American Global and the LEI Group, have met expectations, and integration efforts are progressing well.

The leisure sector reported robust growth, with a Revenue of Rs. 838 million, a Gross Profit of Rs. 688 million and Profit after Tax of Rs. 262 million for the quarter. Performance was led by the corporate travel business. Bolstered by the continued success of its corporate travel services, the sector’s inbound and leisure businesses also gained positive traction, allowing the sector to solidify its standing in the market. This resulted in a buoyant first half with the sector, posting a Revenue of Rs. 1.5 billion, a Gross Profit of Rs 1.3 billion and a Profit after tax of Rs. 515 million.

Other investments, which consist of the IT and Fresh produce business units, contributed a Revenue of Rs. 1.4 billion, a Gross Profit of Rs. 46 million for the quarter under review. With the export operations having stabilized and IT-related business making gradual progress, year-to-date Revenue and a Gross profit recorded Rs 2.8 billion and Rs. 59 million, respectively.

Expolanka continued to focus on working capital and cash flow management, supported by efficient working capital management initiatives. Gearing remained low, while a Rs. 6.88 billion dividend was paid during the quarter.

Emphasis remained on the company’s Environmental, Social, and Governance (ESG) initiatives aligned with overall strategic goals. Building on Global Goodness efforts, the company furthered programs supporting UN sustainability aims, green logistics and women’s empowerment.

Though uncertain macro conditions have impacted short-term performance, the company remains agile and committed to overcoming challenges by focusing on growing business, driving efficiency and improving liquidity. Having demonstrated adaptability to challenging environments in the past, Expolanka aims to continue long-term investments in capabilities, infrastructure and systems while enhancing operational excellence to address the ever-changing global landscape.

October 9, 2023

In the move towards sustainable organisations the role of the CFO is evolving beyond finance to include sustainability and social aspects of their operations

New research by ACCA (the Association of Chartered Certified Accountants) and BDO, the international network of public accounting, tax and advisory firms, has revealed how the role of the CFO is growing to include driving business decisions and reporting on the non-financial areas of their operations.

Over 100 CFOs and business leaders from around the world took part in roundtables and in-depth interviews to contribute their insight into how the traditional role of the CFO is changing, resulting in the report ‘Chief value officer – the important evolution of the CFO’.

To be successful and sustainable, businesses and other organisations increasingly need to combine economic, environmental and social equity. Those that don’t, face risks and their value can diminish – there is a very strong link between value creation and strategy. Using the breadth of drivers (financial, manufactured, intellectual, human, social & relationship and nature) to generate benefit for a wide range of stakeholders creates value. With a focus for many organisations on purpose and value, contributors were asked to consider whether there is a trend to asserting the need for a new role of chief value officer and whether this a role that the CFO is already fulfilling.

The report yields three significant findings. Firstly, the concept of value holds paramount importance in organizational performance management, serving as a pivotal factor in their journey towards long-term sustainability. Secondly, Chief Financial Officers (CFOs) are progressively embracing a value-centric methodology in their operations, signifying a transition towards encompassing the role of Chief Value Officer within their traditionally financially-oriented responsibilities. Lastly, the trajectory to becoming a CFO demands an expanding array of experiences, necessitating a blend of structured and informal learning initiatives. Professional bodies and practices must actively engage with this evolving development path to effectively cater to aspiring CFOs.

Helen Brand, ACCA Chief Executive, said: ‘We already know that CFOs are increasingly acting as strategic leaders and advisers in their organisations. The CFO role is one that has moved significantly from the traditional view, while retaining the core responsibilities. Now there’s a real opportunity for them to satisfy the value agenda and evolve the role for the next generation of CFOs.’

Ashane Jayasekera, Deputy Managing Partner, Head of Forensics, Risk & IT Security, BDO Partners Sri Lanka, added CFO’s play a very important role as “Co- Pilots” in an organsiation, and they already interact with the key players involved in ESG planning and implementation. Given the importance of the ESG Agenda, CEO’s are expecting their CFO’s to step up and play their role in ESG adoption and reporting”. CFO’s are in an ideal position to provide the necessary information to obtain the funding for ESG investments”

The emerging generation of CFOs in Sri Lanka must take the lead in cultivating a comprehensive outlook on business performance and purpose. As our nation progresses towards nurturing sustainable organizations, the role of the CFO should be poised for a transformative evolution that demands a deep embrace of the broader facets of sustainability and social impact, that requires to be seamlessly integrated into their operational strategies, noted ACCA Head of South Asia, Ms,Nilusha Ranasinghe.

October 5, 2023

In the move towards sustainable organisations the role of the CFO is evolving beyond finance to include sustainability and social aspects of their operations

September 11, 2023

Bangkok, September 6, 2023: Backed by a rich racing pedigree spanning over four decades, TVS Motor Company unveils the latest addition and a new flagship to its iconic Apache line-up: the TVS Apache RTR 310. This highly anticipated naked sports motorcycle is set to redefine the realm of two-wheeled exhilaration with its impressive blend of power, agility and style and is poised to captivate motorcycle enthusiasts and adrenaline aficionados around the world. It promises an unmatched riding experience, setting new benchmarks and offering a gateway into the world of the freestyler.

The TVS Apache RTR 310 leads in innovation right from its unique design, engine layout, heat management and many differentiated technologies which are focused on rider engagement, safety and comfort.

Speaking on the occasion, Mr. Sudarshan Venu, Managing Director, TVS Motor Company said, “TVS Motor Company has always transformed and redefined technology with the TVS Apache series at the helm, where we brought to life tech led innovations such as ride modes, slipper clutch, connectivity, fully adjustable suspension and the Built to Order Platform. The global launch of the all the new TVS Apache RTR 310 marks a momentous occasion for us, as this motorcycle encapsulates Apache’s 18 year legacy of innovation and performance. With the TVS Apache RTR 310, we’re taking our engineering to a whole new level, offering enthusiasts a motorcycle that’s not only powerful but also brings together different technologies to give a unique riding experience. This motorcycle is positioned to be the flagship product for many global markets including India, Europe, LATAM and ASEAN.”

Speaking at the launch, Vimal Sumbly, Head Business – Premium, TVS Motor Company, said, “The TVS Apache RTR 310 is the first of a new generation of Apache’s that inherit a 40 year racing pedigree and are based on our ‘Track to Road’ philosophy. This machine will be the start of a new era of Freestyle Performance Motorcycling with a core essence of thrill and fun. With many defining technologies, this flagship Apache like every other Apache will lead in technology setting new benchmarks for the category. Its cyborg inspired streetfighter design, all range torque and track tuned agility, elevates the fun of motorcycling for the new age riders – Power to Play for the Freestyler.

Built from ground-up, the motorcycle’s 312.2 cc engine has a unique reverse inclined DOHC engine that provides a compact engine layout resulting in mass centralisation. The all-new forged aluminium piston is 5% lighter which produces a peak power of 35.6 PS @ 9,700 rpm and maximum torque of 28.7 Nm @ 6,650 rpm. The engine is tuned for all range torque delivery which gives you unlimited thrill across the power band and the fastest in segment 0-60 of 2.81 secs

The power is delivered through a 6-speed transmission with all new Bi Directional Quickshifter. The quickshifter is specially tuned for widest operating range starting from 2,300 rpm all the way to the red line. The state-of-the-art Throttle-By-Wire system comprises of an intelligent 46mm large throttle body that provides a crisp power delivery. Additionally, the motorcycle offers Race Tuned Linear Stability Control (RT-LSC) that includes straight line dual channel ABS, Cruise control, Linear Traction Control and rear lift protection. The first in segment cruise control maintains the set speed without any throttle or clutch input helping in reducing rider fatigue over long distance riding. The cruise control feature allows you to downshift and upshift up to 2 gears to achieve optimum cruise rpm and use cruise for longer period.

The TVS Apache RTR 310 sports a forward biased mass with an upswept sleek tail giving it a unique streetfighter silhouette. The DRL, headlamp and tail lamp are all designed to give a menacing cyborg look. The unique lightweight aluminium sub frame embodies an exoskeletal look that maximizes its agility. The all new lightweight 8 spoke dual coloured alloy wheels enhance the flamboyance. The Hyper Spec trellis frame of the TVS Apache RTR 310 is designed to provide excellent dynamic response at higher speeds, greater agility and ease of manoeuvrability.

Built on a foundation of advanced technology, the motorcycle is equipped with 5 ride modes namely Urban, Rain, Sports, Track and the all-new Supermoto mode that disengages the rear ABS while maximizing the power. The horizontal 5” TFT race computer offers unique UI themes, and customizable settings including traction control, cruise control, quickshifter, climatic seat control, TPMS, headlamp brightness and DRL control. The SmartXonnect Bluetooth connectivity links the TVS Apache RTR 310 with your smartphone offering a series of features including telephony, music control, GoPro control, smart helmet connectivity, voice assist, race telemetry, precise turn by turn navigation with what3words, digi docs and crash alert.

The TVS Apache RTR 310 boasts of 12 exclusive freestyler accessories including knuckle guard, visor, pannier and top box kit and 14 safety gears and lifestyle merchandize for the customers to choose from. The motorcycle offers 24×7 roadside assistance and hassle-free servicing with its annual maintenance contracts.

August 16, 2023

Total operating income up by 61% to LKR 20.6 Bn
DFCC Group records PAT of LKR 3.9 Bn and PBT of LKR 5.9Bn
Impairment charges of LKR 8.1 Bn reflective of present economic stresses

DFCC Bank continued its commitment to serving customers across the country, delivering high-quality customer centric banking services, despite the volatile and challenging economic environment and the Bank has recorded a resilient performance for the 1^st half of 2023.

The Sri Lankan economy has experienced positive signs of economic recovery and a measure of stability in macro-economic factors compared to the previous period, with the appreciation of LKR against USD and the IMF bailout followed by the Domestic Debt Optimization (DDO) announcement. However, the Banking industry faced many challenges in managing the quality of the loan book while having high impairment charges which created pressure on the profitability and capital adequacy requirements over the last two years. The fluid government regulations and monetary policy of Central Bank of Sri Lanka (CBSL) aim to enable the economy to reach its potential and stabilize inflation at mid-single digit levels in the medium term, while easing pressures in the financial markets. Accordingly, CBSL decided to reduce the policy interest rates which will provide the impetus for market interest rates to adjust downwards. The Bank will align to these positive market trendsby providing further assistance to customers in order to recover from the existing situation.

The following commentary relates to the unaudited Financial Statements for the period ended 30 June 2023, presented in accordance with Sri Lanka Accounting Standard 34 (LKAS 34) on “Interim Financial Statements”.

Financial Performance

Profitability

DFCC Bank PLC, the largest entity within the Group, reported a Profit Before Tax (PBT) of LKR 5,110Mn and a Profit After Tax (PAT) of LKR 3,205Mn for the period ended 30 June 2023. This compares with a PBT of LKR 331Mn and a PAT of LKR 513Mn in 1H of 2022. The Group recorded a PBT of LKR 5,867Mn and PAT of LKR 3,923Mn for the period ended 30 June 2023 compared to LKR 690Mn and LKR 824Mn, respectively, in 2022. All the member entities of the Group made positive contributions to this performance. The Bank’s Return on Equity (ROE) increased to 10.52% during the period ended 30 June 2023 from 5.04% recorded for the year ended 31 December 2022. The Bank’s Return on Assets (ROA) before tax for the period ended 30 June 2023 is 1.62% compared to 0.46% for the year ended 31 December 2022.

Net Interest Income

The Bank’s Net Interest Income (NII) increased 41% over Q2 of 2022 to reach LKR 15,475 Mn by the end of June 2023. Both deposit and lending interest rates have continued to adjust downwards with the market guidance provided by the Central Bank, along with improvement in liquidity conditions of the domestic money market. While lower interest rates may have resulted in reduced interest income and expenses, in nominal terms,Net Interest Income (NII) has continued to improve as a metric during the period under review, as a result of the time lag in repricing existing deposits and the lending portfolio, and due to the Bank’s strategy of investing in high-yield government securities. Strategically, the Bank thus increased its fixed-income investment portfolio, contributing significantly to increased interest income. The interest margin increased from 4.43% in June 2022 to 5.48% by June 2023.

Fee and Commission Income

The Bank’s dynamic strategies and the efforts of its dedicated teams led to increased remittances, trade-related commissions, and other fee income lines, which contributed to the increase in non-funded business during the period. Fee income generated by credit cards also increased significantly, in line with the volume of the transactions. Accordingly, net fee and commission income have increased by 64% to LKR 1,945Mnfor the period ended 30 June 2023, compared to LKR 1,183Mnfor the comparative period in 2022.

Impairment Charge on Loans and Other Losses

The impaired loan (stage 3) ratio increased from 4.36% in December 2022 to 5.58% as of 30 June 2023, a continuation of the prevalent trend amidst the present economic conditions. However, the Bank expects this trend to moderate and potentially improve towards the end of the year, reflecting positive developments in the macroeconomic environment,coupled with the Bank’s concerted efforts with regard to recoveries. To address the current and potential future impacts of the present economic conditions on the lending portfolio, the Bank made adequate impairment provisions during the period by introducing changes to internal models to account for unseen risk factors in the present highly uncertain and volatile environmentincluding additional provisionsmade for the Bank’s exposure to risk elevated sectors.

The Bank has used significant judgement using the information available as at reporting date to estimate the recoverable value of foreign currency denominated investment securities issued by Government of Sri Lanka. Accordingly, an impairment charge has been recognized to maintain a provision cover of 42% on above investments.

Accordingly, with these provisions made to address the additional risks in the economic environment, the impairment charge recorded an increase of 19% against the comparative period, thus standing at LKR 8,096 Mn, for the period ended 30 June 2023, compared to LKR 6,808 Mn in the comparable period.

Operating Expenses

Operating expenses for the period ended30 June 2023 rose primarily due to the increase in inflation. However, the Bank has taken numerous cost control measures within the Bank, resulting in operating expenses being curtailed and managed at these levels.

Other Comprehensive Income

Changes in fair value of investments in equity securities and fixed income securities (treasury bills and bonds) and movement in hedging reserves are recorded through other comprehensive income. Due to the application of hedge accounting, the impact on the total equity of the Bank due to exchange rate fluctuation was minimized. A fair value gain of LKR 2,759Mn was recorded on account of equity securities outstanding as at 30 June 2023. The increase in the share price of Commercial Bank of Ceylon PLC during the period was the main contributor to the reported fair value gain in equity securities. The favourable movement in treasury bill and bond yields also resulted in a fair value gain of LKR 2,344Mn during the period.

Business Growth

Assets

Despite the challenges faced by the economy and the banking sector, DFCC Bank’s total assets increased by LKR 8.1Bn, recording a growth of 1.42% from December 2022. In line with the bank’s growth strategy and the present economic climate, an increase in investment in fixed income securities, combined with positive fair value movement in both fixed income securities and equity securities, has contributed to a 91% increase in investment in financial assets at fair value through other comprehensive income as of 30June 2023 compared to the balance as of 31 December 2022. With increased provision for expected credit losses, appreciation of the Sri Lanka Rupee compared to 31 December 2022 and considerable economic challenges, the net loan portfolio was recorded at LKR 342Bn as at 30June 2023, which is 7% lower than the balance as at 31 December 2022.

Liabilities

The Bank’s deposit base experienced a growth of 3.21% during the period, recording an increase of LKR 11.9Bnto LKR 382Bn, up from LKR 370Bn as at 31 December 2022. This resulted in recording a loan-to-deposit ratio of 100.39%. Further, the CASA ratio was 19.75% as at 30June 2023. The Bank’s funding costs were also contained using medium to long-term concessionary credit lines,primarily used to grow the lending portfolio. Taking into consideration these concessionary term borrowings, the CASA ratio further improved to 30.76% and the loans-to-deposit ratio improved to 89.60% as at 30 June 2023.

Equity and Compliance with Capital Requirements

DFCC Bank’s total equity increased to LKR 59Bn as at 30 June 2023,supported by favourablemovements in the equity portfolio and fixed income security portfolio classified as fair value through other comprehensive income, and positive movements in the hedging reserve, together with therecorded profit after tax of LKR 3.2 Bn. Accordingly, Tier 1 and Total Capital ratios recorded 10.085% and 13.148%, respectively as at 31 December 2022 improved to11.416% and 14.085%, respectivelyby 30 June 2023. The Bank’s Net Stable Funding Ratio (NSFR) was 131.77%, and Liquidity Coverage Ratio (LCR) – all currency – was 305.06% as at 30 June 2023 compared to 126.55% and 202.34% respectively as at 31 December 2022. All these ratios were thus maintained well above the minimum regulatory requirement.

CEO’s Statement

“As we reflect on our performance in the first half of 2023,DFCC Bank PLC is pleased to report strong financial results across all business areas. Sri Lanka’s resilient and adaptable economy and our commitment to innovation, operational excellence, and customer-centricity continue to pay off, as evidenced by our steady revenue growth and increased profitability. We are confident that our robust growth strategy and prudent risk management practices will enable us to continue delivering sustainable value to our stakeholders in the long term, helping to support Sri Lanka’s economy as it enters into a period of significant recovery, supported by strong macroeconomic fundamentals.”

August 16, 2023

Operating Income LKR 22.4 Bn, up 35% YoY
Profit Before Taxes LKR 12.6 Bn and Profit After Taxes LKR 6.1 Bn
Tax expenses LKR 6.5 Bn in 1H2023, up 239% YoY
Total Capital Adequacy Ratio 17.17%,
Liquidity Ratio 39.7%

Nations Trust Bank PLC reported a strong performance in 1H2023 posting a Profit Before Taxes (PBT) of LKR 12.6 Bn, up 174% year-on-year (YoY) and a Profit After Taxes (PAT) of LKR 6.1 Bn, supported by a 35% growth in Operating Income (YoY).

Commenting on the results, Hemantha Gunetilleke, Director & Chief Executive Officer of Nations Trust Bank said “The Bank recorded a strong first half, highlighting steady growth across our customer segments. The Bank’s strengths lie in its continued focus on digital empowerment, robust risk management models and a strong capital base, in addition to healthy liquidity buffers.”

Supporting the Bank’s financial performance is its strong capital position with Tier I Capital at 15.35% and Total Capital Adequacy Ratio at 17.17%, well above the regulatory requirement of 8.5% and 12.5% respectively.

During 1H2023 loan impairment charges reduced by 56%, reflecting the bank’s dedication to prudent risk management practices and due to the absence of high impairment charges booked in the previous year in relation to foreign currency denominated government securities.

The Bank reported a Return on Equity (ROE) of 24.9%, while its Earnings Per Share for the 1H23 increased to LKR 19.14, against LKR 8.45 recorded during the same period last year.

During the reporting period, the Bank’s tax expenses increased by LKR 239% to LKR 6.5 Bn, due to the increase in earnings and in line with the increase in tax rates from the fourth quarter of the preceding year.

Nations Trust Bank PLC serves a diverse range of customers across Consumer, Commercial and Corporate segments through an island wide network of 96 branches. The Bank is focused on digital empowerment through cutting-edge digital banking technologies, and pioneered FriMi, Sri Lanka’s leading digital banking experience. Nations Trust Bank PLC is an issuer and sole acquirer of American Express Cards in Sri Lanka with market leadership in the premium segments.

August 16, 2023

Bank PAT improves to Rs 8.6Bn
Impairment charge of Rs 28 Bn in 1H
Deposits grow by nearly Rs 70 Bn in 6 months
Tier I and total capital ratios improve to 12.48% and 15.58% respectively

Hatton National Bank PLC continued its steady performance in Q2 2023, posting a 1H 2023 PBT of Rs 13.6 Bn, while 1H 2023 PAT stood at Rs 8.6 Bn, growing 56% YoY. Meanwhile, the Group made a consolidated PBT and PAT of Rs 15.2 Bn and Rs 9.8 Bn respectively.

Commenting on the performance, Nihal Jayawardene, Chairman of Hatton National Bank PLC, stated that “This quarter underscored the Sri Lankan economy displaying signs of normalisation, with inflation moderating, interest rates gradually pulling down, and the Rupee appreciating. Moreover, the announcement of the much-awaited Domestic Debt Optimisation (DDO) plan and the resulting clarity, marked a significant step towards settling the qualms surrounding the debt restructuring programme and its potential impact on the banking sector.”

Although interest rates tapered off towards the latter part of Q2 2023, 1H 2023 rates still remained relatively higher when compared with the corresponding period in 2022, enabling the Bank to report a net interest income of Rs 59.3 Bn in 1H 2023, up 48% YoY. Additionally, net fee and commission income grew by 12% YoY to Rs 8.0 Bn, driven by increased activity in cards, remittances, trade and digital platforms.

On the back of improved foreign inflows and the consequent rising dollars in circulation, the Rupee appreciated by approx. 15% YoY in the first six months of 2023. Currency volatility caused the Bank to record a net exchange loss of Rs 3.8 Bn for 1H 2023, primarily stemming from revaluation losses of FCBU retained earnings.

Despite the challenges, the Bank continued to prioritise asset quality, with the net stage III loan ratio at 4.77% and stage III provision cover at 51.4% as at end June 2023. In terms of impairment provisions, the Bank recorded a cumulative impairment of Rs 28.3 Bn in 1H 2023 which included impairment on loans and advances as well as on investments in foreign currency denominated government securities.

The Bank’s 1H 2023 operating expenses increased by 19% YoY, to Rs 17.6 Bn driven largely by inflation. Nevertheless, the Bank maintained an efficient cost-to-income ratio of 27% for the first half of 2023.

Jonathan Alles, Managing Director and Chief Executive Officer of Hatton National Bank PLC stated that, “We are pleased to see the positive developments on the country’s macroeconomic front and HNB’s solid performance in the first six months of this year. We commend the government’s DDO plan – which insulated the banking sector from any reprofiling of Treasury Bills or Bonds. This in turn enables banks, inundated with mounting credit impairment and higher taxes, to use much needed capacity in supporting the revival of key sectors and the broader economy.”

“Going forward, we will step up efforts to expand support to those who have been adversely impacted over the past few years, with a particular focus on the micro and SME sector. Our role towards developing SMEs goes beyond that of a traditional financial partner, as we provide assistance on capacity building and technical know-how through strategic partnerships with key multilateral agencies and international stakeholders.

“While we will continue to enhance our digital offerings and infrastructure, we will also explore capitalising on emerging digital technologies to improve our service delivery and workplace productivity. Our consistent performance notwithstanding extremely volatile conditions, is a testament to the untiring efforts of the HNB Team. Creating a culture of learning and development is vital to the success of any organisation, and HNB reiterates its commitment towards investing in our employees’ growth and wellbeing.”

“As Sri Lanka charts a new course towards its economic recovery, we at HNB remain undeterred in supporting that journey, as we continue to raise the bar as the country’s premier corporate citizen”

Due to the increase in the corporate tax rate from 24% to 30% coupled with the introduction of the social security contribution levy w.e.f. October 2022, the Bank’s total effective tax rate for 1H 2023 increased to 53%.

Since March 2023, the asset base marginally grew to Rs 1.8 Trillion as at end June 2023. Moreover, given the tight credit conditions and exchange rate volatility prevailing for a majority of the June quarter, the Bank’s gross loan book dropped to Rs 986 Bn as at end of 1H 2023. Meanwhile, as deposits remained attractive to customers, the Bank’s deposit base reached closer to Rs 1.5 Trillion at the end of June 2023.

Compared to Q1 2023, the Bank recorded stronger Tier I and Total Capital Adequacy Ratios of 12.48% and 15.58% against the minimum statutory requirements of 9.5% and 13.5% respectively, with the provision to drawdown a further 250bps from the Capital Conservation Buffer. HNB’s liquidity levels also continued to be strong and well above the regulatory minimum requirements, with Statutory Liquid Assets ratio around 40% (vs. a 20% requirement) and all currency Liquidity Coverage ratio at 341.5% (vs. a 100% requirement).

HNB is rated A (lka) by Fitch Ratings and was awarded the esteemed title of “Sri Lanka’s Best Corporate Citizen” for 2022 by the Ceylon Chamber of Commerce. Other major accolades include being ranked among the Top 1,000 Banks in the World for six consecutive years by the acclaimed UK based “The Banker Magazine”, being adjudged the “Best Retail Bank in Sri Lanka” for the 13th occasion by the Asian Banker, being declared the “Best SME Bank” by Asiamoney Magazine, as well as securing a Top 5 position on Business Today’s Top 40 rankings for 2022.

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