Business

Fitch also said, “As most insurers predominantly use agency networks that rely on human interaction for distribution. In addition, we expect non-life business growth to slow in light of the government’s temporary restriction on the import of motor vehicles to control currency depreciation.”

Fitch expects the potential pressure on SLIC's earnings from the slowdown in premiums and softer investment yields to be somewhat mitigated by lower claims from motor insurance lines due to fewer traffic accidents following restrictions on travel to contain the spread of the coronavirus. SLIC has consistently maintained its non-life combined ratio below 100% (2019: 95%) for the previous five years, buoyed by its scale advantages and prudent underwriting practices.

Fitch has affirmed the Insurer Financial Strength (IFS) Rating of SLIC at ‘B’. The outlook is negative. The agency has simultaneously affirmed SLIC’s National IFS Rating at ‘AAA(lka)’ with a Stable outlook.

Fitch says that SLIC’s ratings reflect its ‘Favourable’ business profile, and capital position and financial performance that are better than that of the industry. These strengths are partially offset by its high exposure to sovereign-related investments, which caps its investment and asset risk score on the international rating scale at ‘ccc+’ under Fitch’s credit-factor scoring guidelines.

The Negative outlook on SLIC’s international IFS Rating reflects the credit rating agency’s expectations of a further increase in the insurer’s investment-related risks, which are heightened in the international rating scale because of its sizeable exposure to assets linked to the Sri Lankan sovereign (B-/Negative).

Fitch assesses SLIC’s business profile as Favourable’ compared with other Sri Lankan insurance companies due to its leading business franchise, diversified participation and stable business lines across life and non-life insurance sectors, and its large domestic operating scale.

In light of this ranking, Fitch scores SLIC’s business profile at ‘b+’ under its credit-factor scoring guidelines on the international rating scale. SLIC is Sri Lanka’s second largest life insurer and third largest non-life insurer based on gross written premiums.

SLIC’s risk-based capital ratios of 434% for its life and 208% for its non-life segments, which measure its capital position, were well above the industry average and the 120% regulatory minimum.

Fitch expects the insurer’s sufficient capital buffers, strengthened partly by its large unallocated participating surpluses, to somewhat mitigate the impact from any potential investment losses stemming from volatile financial markets as a result of the coronavirus pandemic.

Chinese tech giant Huawei on Monday (04) donated hi-tech equipment to the Sri Lankan government as part of its efforts to support Sri Lanka's fight against the COVID-19 pandemic, a statement from Huawei Sri Lanka said.

The donation, handed over to Prime Minister Mahinda Rajapaksa here, included five sets of high definition video conference system and six high precision thermal cameras.

Prime Minister Mahinda Rajapaksa said at the hand-over ceremony that he was glad to see ICT sectors contribute unique values during this challenging time, and the Sri Lankan government appreciated Huawei's timely support.

Liang Yi, chief executive officer of Huawei Sri Lanka, said Huawei believed emerging ICT technologies would play important roles under the current situation.

"Huawei will contin uously support Sri Lanka with cutting-edge technologies, to help this beautiful island to win this epidemic battle and bring joy and contentment back to people's life," Liang said. (Xinhua)

The CBSL announced today that they will take "necessary measures to ensure that this regulatory action does not have a disruptive impact on the Government Securities market" adding that action will also be taken to facilitate the handling of the interests of the customers and counterparties of NWSL in an orderly manner.

Lanka Hotels and Residencies (Pvt.) Ltd., the owners of 'Sheraton Colombo' has reiterated their commitment for the opening of the 320 room property at Galle Road.

"We, as Lanka Hotels and Residencies (Pvt) Ltd., would like to reassure our partners, employees, prospective professionals and all other key stakeholders on the continuity and steadfast commitment for the opening of our flagship Project in Sri Lanka - Sheraton Colombo Hotel, a 320 room property at Galle Road," chairman of Lanka Hotels and Residencies, Don Gamini Gunaratne said in a statement.

Gunarathna said that they had to shutdown as a direct response to the pandemic but assured that they will resume operations once the government of Sri Lanka provides clearance to the hospitality industry and added that the well-being of our employees continues to remain a top priority.

"We are vigilantly monitoring the situation and have taken all proactive precautions to ensure the health and safety of all parties involved is of paramount importance," Gunaratne said.

"Although our plans were to soft launch this property from June 2020 onwards, we have been compelled to pause these plans as a direct response to the emergency prevalent across the country and globally. We are vigilantly monitoring the situation and have taken all proactive precautions to ensure the health and safety of all parties involved is of paramount importance. We will be ready to resume our operational activities once the government of Sri Lanka provides clearance to the hospitality industry," Gunaratne said.

He also noted that they stand by the government to take their vision forward for the country, contributing to the revival of the vibrant travel and tourism industry in Sri Lanka and appreciated all the efforts undertaken by the government, the healthcare workers, the armed forces and the police force who are tirelessly working in order to contain the spread of the virus.

Gunaratne further stated that they look forward to engaging with necessary industry bodies under the guidance given by the government to discuss and strategize on re-energizing the Sri Lankan economy.

Evan after experiencing two black swan events with their distinctive and severe impacts within the space of one year, Aitken Spence PLC remained resilient despite these challenges due to the Group’s diversified business portfolio and strategic direction.

The Group’s financial performance for the twelve months ending 31st March 2020 recorded a year-on-year profit-before-tax of Rs. 4.2 billion compared Rs. 7.3 billion last year.

Despite considerable economic headwinds the organisation’s agile strategy was reflected in the earnings from the overseas businesses that contributed 39% compared to 43% last year. This underlined the exceptional relationships that have been built with global industry players across the key sectors. The Group’s businesses from the domestic market derived 61% earnings of the Group’s PBT for 2019/2020 compared to 57% in the previous year.

The total revenue of the Group ending 31st March 2020 was Rs. 53.5 billion, a 4% drop from the previous year, primarily due to a reduction of revenue from the Tourism sector which was affected by the significant impacts mentioned above. However, the drop was compensated by the commencement of the operations during the third quarter of the year of Heritance Aarah, the flagship hotel in the Maldives.

The total assets of the Group increased by 14% to Rs. 140 billion. The Group invested Rs. 10 billion in capital expenditure across many sectors with the highest investment incurred in the power generation segment to fund the construction of the pioneering waste to energy power project, the first of its kind in Sri Lanka. This reflects the organisation’s confidence in its future earnings growth capacity.

The Group’s expansion increased to 9 countries as the Maritime & Freight Logistics sector re-established its presence in South Africa whilst the Tourism sector commenced operations in Myanmar during the year.

Nestlé was recognised as Sri Lanka’s number one F&B company at the recent Business Today TOP 30 awards. The company jumped nine places from its previous ranking to become one of the top 10 companies on the list, which featured Sri Lanka’s best-performing corporates across all industries.

The event awarded organisations that had achieved growth in challenging times during the 2018-2019 period, demonstrating resilience and ingenuity in serving consumers and supporting the country’s economy. This is the fifth consecutive year Nestlé has been recognised by Business Today.  

 “We are honoured to be recognised as one of Sri Lanka’s top 10 corporates by Business Today, in acknowledgement of the contribution we make every day to the country and its people. We have always placed Sri Lankan consumers’ needs first in everything we do - helping to nourish their families, develop their communities, and protect their environment” said Fabrice Cavallin, Nestlé Lanka’s Managing Director.   
Managing Director of Nestlé Lanka Fabrice Cavallin receiving the award from Prime Minister Mahinda Rajapaksa at the Business Top 30 awards.

As one of Sri Lanka’s oldest multinationals, Nestlé celebrates 114 years in the island this year. Its range of popular products serve Sri Lankans right from birth to old age, with recipes carefully tailored to ensure it meets local tastes and nutritional needs. Approximately 90% of the products sold by the company in Sri Lanka is made locally at its factory in Kurunegala.

In 2019, Nestlé provided its consumers with close to 1 billion micro-nutrient enriched servings through its products. Through its business, Nestlé also supports the livelihoods of almost 30,000 Sri Lankan families – from farmers and suppliers, to distributors and employees – by sharing expertise, and providing training, employment and business opportunities.

The company is currently one of Sri Lanka’s largest fresh milk collectors and one of the world’s largest exporters of coconut milk powder. The company is also aggressively driving its 2025 commitment to make all of its packaging 100% recyclable or reusable. It has made good progress, with more than 80% of its current packaging already recyclable. It will no longer offer plastic items in its promotions from April this year, and are working together with its stakeholders to launch Sri Lanka’s first UHT milk carton recycling facility by mid-2020. 

Mastercard, a global technology company in the payments industry, has announced the appointment of Rajesh Mani as the new Country Manager for Sri Lanka & Maldives. Rajesh, who took office earlier in March, will bring over two decades of extensive background in the payments and fintech sectors.

“I’m very confident that Rajesh’s multi-faceted payments background will be of great value to our customers, partners and the team in Sri Lanka & Maldives. As these markets continue to develop and evolve rapidly, Rajesh is very well placed to support our partners towards building a vibrant digital ecosystem in these geographies.,” Mastercard's Chief Operating Officer for South Asia, Vikas Varma said.

In his last position in Singapore, Rajesh led Mastercard’s delivery of domestic payment system infrastructure enhancements in Indonesia, which won the global CEO award in 2018. Further, he also actively led a number of Mastercard’s high impact digital partnerships with key digital clients in Southeast Asia, including Grab, Gojek and Shopee.

“I am honored to have this opportunity, and I’m looking forward to working with the government, all of our customers, partners and stakeholders to support Sri Lanka & Maldives’ vison of digital transformation, financial inclusion for citizens and their overall evolution towards cashless economies,” said Rajesh Mani.

Sri Lanka’s diversified conglomerate, the Hayleys Group, demonstrated strong resilience in the 3rd quarter of 2019/20 to achieve a 41 percent growth in profit-after-tax.

The robust performance during the quarter enabled the Group to offset the subdued performance of the previous quarters, with the Group’s profit-after-tax increasing by 18 percent on a cumulative basis during the 9 months up to December 2019.

Profitability was upheld by broad-based improvements in the operating performance of the Group’s export-oriented businesses.

Turnover declined marginally to Rs.160.6 billion in 9 months, mainly reflecting reductions in the Leisure, Transportation and Consumer & Retail segments while other sectors including Purification (+23%), Textiles (+15%), Hand Protection (+4%) and Industry Inputs (+18%) recorded top-line growth.

Improvements in the core performance of key sectors, particularly across export-oriented business lines is reflected in the 9 percent increase in Consolidated Earnings before interest, tax, depreciation, and amortization (EBITDA) to Rs.16.3 billion during the period.

Meanwhile, Consolidated operating profit also recorded an increase of 9 percent to Rs.12.3 billion, driven by Purification (+81%), Textiles (+83%), Hand Protection (+45%) and Industry Inputs (4 fold increase) among others.

The Leisure, Retail, Construction Materials sectors continue to be adversely impacted by challenges stemming from the operating environment. The growth in Group operating expenses was contained at 4% reflecting ongoing investments in lean initiatives and process efficiencies.

Consolidated finance costs increased by 9 percent to Rs.8.4 billion during the period, although the quarter recorded a reduction of 1 percent reflecting the gradual decline in interest rates. The Group’s consolidated pre-tax profit increased by 11 percent to Rs.3.9 billion while profit after tax also grew to Rs.2.2 billion from 1.9 billion, a commendable achievement given the operating conditions. Meanwhile, total assets increased by 4 percent to Rs.242.2 billion by end-December 2019.

“The recently announced tax concessions are likely to result in improved consumer and investor sentiments presenting upside potential for the Group. Additionally, we are confident that the continued growth of our export businesses, coupled with the reduction in lending rates will support the Group’s earnings growth in the coming months” said Mohan Pandithage, Chairman and Chief Executive of Hayleys.
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Fitch Ratings has revised the Outlook on Sri Lanka-based People's Leasing & Finance PLC's (PLC) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) to Negative, from Stable, and has affirmed the ratings at 'B-'.

This follows the 24 April 2020 downgrade of Sri Lanka's sovereign rating to 'B-', from 'B', with a Negative Outlook to reflect the impact of the escalating coronavirus pandemic on the economy.

Fitch forecasts Sri Lanka's economy to contract by 1.0% in 2020, from 2.3% growth in 2019, due to the impact of the coronavirus pandemic.

"Our base-case scenario assumes that any economic recovery later this year will be gradual, with limited growth prospects for the non-bank financial institutions (NBFI) sector through 2020 and 2021. We expect NBFIs' financial profiles to come under strain from a more challenging operating environment, and for their key credit metrics to be weaker than our previous expectations, notwithstanding regulatory relief," Fitch Ratings said.

The Negative Outlook reflects the increased risk to the company's financial profile from the pandemic and our assessment that the sovereign's weakened credit profile could constrain PLC's rating if it deteriorates further.

HCL Technologies will set up its global delivery center in Colombo, Sri Lanka, the Noida-based IT major said on Monday (03).

The company, which has signed an agreement with the Board of Investment (BOI) of Sri Lanka, said its key business and development strategy in the island nation will be to generate local employment and provide skill programs.

HCL’s local entity, HCL Technologies Lanka (Private) Limited, will collaborate with the Sri Lanka board to implement its ‘Work Integrated Education Program’ to foster growth by cooperating with local information and communications technology and engineering institutions to develop and train the island’s talent pool.

The centre will provide global services in the field of applications & system integration, infrastructure services and digital process operations.

“...we are fully prepared and committed to bring in new opportunities for the local workforce and creating ever-lasting partnerships within the region. Our valuable partnership with the BOI will help us showcase the true essence of our culture of ‘Relationship Beyond the Contract’. By imbibing our ideapreneurship culture we will be aiming to provide best-in-class support to the global clients with the help of local talent pool," said corporate vice president of HCL Technologies, Srimathi Shivashankar, said in a statement.

Kerry Logistics has formed a joined venture with Sri Lanka-based IAS Holdings to increase its global freight forwarding capabilities in South Asia.

The joint venture, dubbed Kerry Logistics Lanka (Kerry Lanka), is headquartered in Colombo, Sri Lanka — conveniently located to act as a crossroads between East Asia, South and South East Asia, Africa and Europe.

In addition to its head office, Kerry Lanka also operates an office and warehouse at Bandaranaike International Airport.

Sri Lanka is a large export of textiles: according to the Central Bank of Sri Lanka’s external sector performance review, 46% of Sri Lanka’s total exports derived from the garments industry in 2019, amounting to $5.6bn.

There are more than 300 apparel manufacturers in Sri Lanka, which are well connected to the major brands in Europe and the US. Thus, Kerry Logistics’ expansion to Sri Lanka will enable it to tap into opportunities in the sector.

Patrick Cheah, executive director of global air of Kerry Logistics, commented: “Located in Sri Lanka, the intersection of freight routes in South Asia, Kerry Lanka will become a significant hub for Kerry Logistics and give a strong boost to our global connectivity.

“Plans are also in place to aggressively focus on the upstream of the supply chain to support the fashion industry vertical.

“The forming of the joint venture also marks the deepening of our presence in the South Asian subcontinent, rounding out our full suite of services in the region.”

Kerry Logistics has also established a subsidiary in Pakistan in 2018 to extend its footprint in the Indian subcontinent. This new subsidiary is in addition to Kerry Indev Logistics in India, which was established in 1984.

Uber Eats, one of the world’s leading food delivery networks, will soon launch its operations in its third Sri Lankan city – Negombo. With a global presence in more than 500 cities across the world, UberEats has grown and expanded to be a market leader in Sri Lanka, where it collaborates with many delivery and restaurant partners to provide fast, affordable and convenient food delivery.

By looking to partner with the best and most loved restaurants in Negombo, UberEats provides hungry customers with a tasty selection of dishes at the simple touch of a button. Combining convenience, efficiency and delivery of delicious meals, UberEats continues to redefine traditional methods of food delivery. Customers in Negombo will soon have the opportunity to fulfill their food ordering needs at their convenience, within the comfort of their own homes.

Commenting on the upcoming launch, Bhavna Dadlani – Lead, UberEats Sri Lanka stated: “It has been very encouraging to see the response from restaurant partners in Negombo in the pilot phase. A number of restaurant owners have reached out to partner with us. We continue to receive a lot of love in Colombo and Kandy and are optimistic about Negombo. We look forward to becoming an integral part of the food culture of the city.”

As an app-based food delivery pioneer in a predominantly call-based food delivery market, Uber Eats Sri Lanka has seen immense support and popularity from its range of consumers. With evident success in Colombo and Kandy, Uber Eats Sri Lanka aims to offer reliable delivery options in Negombo, while simultaneously helping restaurants expand their capacity and customer base. (Press Release)