Business

Trade account deficit widens YoY for fourth consecutive month

Published

5 years ago

2021/08/17

External sector performance – June 2021

The deficit in the trade account widened on a year-on-year basis for the fourth consecutive month in June 2021. Both exports and imports were significantly higher in June 2021 compared to June 2020. Considering the first half of the year, although exports recorded a healthy growth, import expenditure increased at a higher pace. Workers’ remittances recorded a year-on-year decline in June 2021, while earnings from tourism remained at minimal levels. In the financial account, both foreign investment in the government securities market and the Colombo Stock Exchange (CSE) continued to record marginal net outflows during the month. The Sri Lankan rupee remained broadly stable in June 2021.

Trade Balance and Terms of Trade

Trade Balance: The deficit in the trade account widened on a year-on-year basis to US dollars 652 million in June 2021 compared to the deficit of US dollars 161 million recorded in June 2020. The cumulative deficit in the trade account in the first half of the year also widened to US dollars 4,316 million from US dollars 3,262 million recorded in the corresponding period in 2020, and US dollars 3,597 million recorded in the corresponding period in 2019. The major contributory factors for this outcome are shown in Figure 1.

Terms of Trade: Terms of trade, i.e., the ratio of the price of exports to the price of imports, deteriorated by 16.7 per cent in June 2021 compared to June 2020, as the increase in import prices were higher than the increase of export prices, compared to June 2020.

Performance of Merchandise Exports1

Overall exports: Earnings from merchandise exports in June 2021 recorded an increase of 12.6 per cent to US dollars 1,007 million on a year-on-year basis. Cumulative export earnings from January to June 2021 amounted to US dollars 5,699 million, compared to US dollars 4,413 million recorded in the corresponding period in 2020 and US dollars 5,999 million recorded in the corresponding period in 2019. Exports improved by 12.9 per cent in June 2021 over May 2021.

Industrial exports: Earnings from the export of industrial goods increased by 16.6 per cent in June 2021 compared to June 2020, with a broad-based increase in export earnings under most of the categories. Substantial increases were noted with respect to rubber products (tyres and gloves), petroleum products, machinery and mechanical appliances (all subcategories), textiles and garments, gems, diamonds and jewellery, and base metals and articles. Increase in earnings from petroleum products was due to the increase in unit values of bunker fuel along with some improvement in quantities supplied. Despite the ongoing pandemic related disruptions, the main export segments also recorded increased earnings on a month-on-month basis. Total earnings from industrial exports from January to June 2021 amounted to US dollars 4,408 million with a growth of 31.3 per cent from the same period in 2020.

Agricultural exports: Total earnings from the export of agricultural goods in June 2021 remained around the same values recorded in June 2020. Earnings from tea exports increased due to improvement in export volumes while the export unit value declined. Further, earnings from exports of coconut (both kernel and non-kernel products), spices (such as pepper and cloves) and unmanufactured tobacco increased. In contrast, there was a decline in export earnings from seafood, minor agricultural products (fruits, arecanuts, betel leaves, etc.) and vegetables (fresh, frozen, dried, preserved, etc.). Total earnings from agricultural exports during the first half of 2021 amounted to US dollars 1,259 million, with a growth of 21.2 per cent from the same period in 2020.

Mineral exports: Earnings from mineral exports were higher in June 2021 than in June 2020 with increases in earnings from earths and stone as well as ores, slag and ash. Total earnings from mineral exports from January to June 2021 amounted to US dollars 25 million.

1 Exports classified according to Standard International Trade Classification Revision 4 are presented in Annex I

Export indices: The export volume and unit value indices increased by 8.9 per cent and 3.4 per cent, respectively, on a year-on-year basis in June 2021. These indicate that the increase in export earnings, on a year-on-year basis, was due to the combined impact of higher export volumes and prices.

Performance of Merchandise Imports2

Overall imports: Expenditure on merchandise imports increased by 57.2 per cent to US dollars 1,659 million compared to US dollars 1,055 million recorded in June 2020. The increase in import expenditure was observed across all main categories of imports, namely, consumer goods, intermediate goods and investment goods, although expenditure on petroleum imports was low due to low import volumes during June 2021. On a cumulative basis, total import expenditure in the first half of 2021 amounted to US dollars 10,015 million, compared to US dollars 7,675 million recorded in the corresponding period in 2020 and US dollars 9,596 million recorded in the corresponding period in 2019.

Consumer goods: Expenditure on the importation of both food and beverages and non-food consumer good categories increased substantially in June 2021 compared to a year ago. Expenditure on food and beverages increased by 61.9 per cent to US dollars 165.0 million with a broad-based increase in all categories, except seafood. However, the largest contribution to the increase in total food bill was from dairy products (mainly milk powder, but also cheese and butter), and oils and fats (mainly coconut oil, but also other types of oil). Expenditure on non-food consumer goods increased by 47.6 per cent to US dollars 217.2 million, contributed mainly by medical and pharmaceuticals (mainly vaccines), home appliances (televisions, rice cookers, fans, refrigerators, etc.), mobile phones, rubber tyres and tubes, etc. Total expenditure on the importation of consumer goods in the first half of 2021 amounted to US dollars 1,912 million, which is an increase of 7.3 per cent compared to the same period in 2020.

Intermediate goods: Expenditure on importation of intermediate goods in June 2021 increased by 48.5 per cent over June 2020, despite the 40.0 per cent decline in the expenditure on fuel. Expenditure on fuel declined due to non-importation of crude oil and low import volumes of other types of petroleum, taking into consideration the availability of sufficient stocks. The expenditure on almost all other types of intermediate goods increased, except fertiliser, mineral products and unmanufactured tobacco, reflecting increased economic activity in the country as well as increased commodity prices in the world market. Total expenditure on importation of intermediate goods during the first half of 2021 amounted to US dollars 5,950 million with an increase of 42.8 per cent from the same period in 2020.

(CBSL)

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Business

AIA delivers strong first half results in 2026; double-digit growth across key financial metrics

Published

13 hours ago

2026/09/5

Thilina Walpola

The Board of AIA Group Limited (the “Company”) is pleased to announce the Group’s financial results for the six months ended 30 June 2026. Growth rates are shown on a constant exchange rate basis unless otherwise stated:

New business performance and embedded value

Value of new business (VONB) of US$3,212 million, up 10 per cent overall and 14 per cent excluding Thailand(1)

Record high annualised operating ROEV of 18.0 per cent, up from 15.8 per cent in full year 2025

EV Equity of US$83.4 billion, up 6 per cent per share over the first half on an actual exchange rate basis

IFRS earnings

Operating profit after tax (OPAT) of US$4,163 million, up 13 per cent per share

AIA now expects to exceed OPAT per share CAGR target of 9 to 11 per cent from 2023 to 2026(2)

Record high annualised operating ROE of 17.5 per cent, up from 15.5 per cent in full year 2025

Cash generation and capital returns

Underlying free surplus generation (UFSG) of US$3,935 million, increased by 10 per cent per share

Net free surplus generation (net FSG) of US$2,758 million, up 12 per cent per share

US$3.6 billion returned to shareholders in the first half through dividend and share buy-back

Interim dividend increased by 10 per cent to 53.90 Hong Kong cents per share

Lee Yuan Siong, AIA’s Group Chief Executive and President, said:

“AIA has delivered another strong performance in the first half of 2026, with double-digit growth across our key financial metrics, while continuing to return substantial capital to shareholders. VONB reached a record high of US$3.2 billion with growth across all distribution channels, and all reportable segments excluding Thailand. The Group has achieved 17 per cent CAGR since the first half of 2023(3), demonstrating consistently strong demand for AIA’s professional advice and differentiated products.

“At the core of our unrivalled distribution platform is our market-leading Premier Agency. I am delighted that AIA has once again been ranked the number one Million Dollar Round Table (MDRT) multinational company globally. We have held this position for a record 12 consecutive years and we have more than double the number of MDRT members of our nearest competitor. In the first half of 2026, our Premier Agency achieved strong VONB growth of 11 per cent excluding Thailand(1). Our extensive network of strategic distribution partners further expands our market reach and generated an 18 per cent increase in VONB, supported by very strong performance in both the bancassurance and independent financial adviser (IFA) and broker channels.

“Strong new business, together with disciplined management of our in-force portfolio, has supported sustained growth in recurring earnings with OPAT per share up by 13 per cent in the first half. As a result, we expect to exceed our 9 to 11 per cent OPAT per share CAGR target for 2023 to 2026(2). UFSG, the Group’s core measure of operating cash generation, increased by 10 per cent per share. After allowing for new business investment, net FSG increased by 12 per cent per share. In accordance with our prudent, sustainable and progressive dividend policy, the Board has declared a 10 per cent increase in the interim dividend to 53.90 Hong Kong cents per share. These achievements demonstrate that our financial strategy is working as intended.

“Asia remains the most compelling growth opportunity for life and health insurance. Powerful structural tailwinds across the region continue to create substantial demand for our professional advice and differentiated products and underpin the exceptional long-term prospects for AIA’s business. I am confident that AIA’s disciplined execution of our strategic priorities will continue to deliver long-term sustainable value for all our stakeholders.”

Business

British Council Sri Lanka launches soft skills workshops to elevate learning and empower communication

Published

13 hours ago

2026/09/5

Thilina Walpola

The British Council team answering questions on Corporate English Solutions from leading corporates about professional development skills courses

The British Council Sri Lanka has launched Corporate English Solutions (CES), tailored to the Sri Lankan corporate and education ecosystem, aimed at helping organisations strengthen workplace communication and professional development.

The launch event took place recently at the NH Collection, Colombo 3, gathering corporate partners, clients and education stakeholders throughout the country.

CES extends the British Council’s long-standing work in English language education and teacher training into a dedicated offering for the corporate sector. The launch introduced two new components to the British Council’s presence in Sri Lanka such as public workshops and teacher training programmes, open to learners and educators beyond the organisation’s existing corporate and academic partners. Guests at the event were shown a short video introducing Corporate English Solutions before the formal proceedings began.

Talal Meer, British Council Regional Business Development Director, South Asia, welcomed guests and introduced the British Council’s team in Sri Lanka. In his remarks, Meer set out the scope of the CES launch, covering the introduction of public workshops in Sri Lanka, the rollout of teacher training programmes, and an overview of the CES product portfolio. Meer’s role covers educational partnerships in the South Asia region, and his address framed the Sri Lanka launch within the British Council’s broader regional strategy.

Business

Ogilvy Group tops award tally at ‘Dragons of Sri Lanka’ 2026

Published

13 hours ago

2026/09/5

Thilina Walpola

Ogilvy Group Sri Lanka delivered a standout performance at the recently concluded Dragons of Sri Lanka 2026 Awards, securing a total of nine awards comprising two Gold Dragons, one Silver Dragon and six Black Dragons, among the festival’s highest overall award tallies. Gold Dragon wins for Phoenix Ogilvy and Ogilvy Digital, together with the seven additional recognitions across multiple categories, highlighted Ogilvy’s ability to combine creativity, strategic thinking and commercial effectiveness to deliver business results.

Organised by the 4As Sri Lanka, the third edition of Dragons of Sri Lanka shortlisted more than 50 agencies and corporates, making it one of the country’s most competitive marketing communications awards. These local awards, along with the chapters in Malaysia and Pakistan are part of the Dragons of Asia platform, one of the region’s leading programmes for marketing communications effectiveness, with entries being judged on strategy, originality, execution and measurable results.

Ogilvy Digital accounted for eight awards in total, including a Gold Dragon in the Business & Trade Marketing category, and a Silver Dragon in the Innovative Idea or Concept category. The Agency additionally received six Black Dragons across the categories of Innovative Idea or Concept, Business & Trade Marketing, Content Creation, Small Budget, Event or Experiential, and Brand Trial or Sales Generation.

Commenting on the achievement, Sajith Weerasinghe, Chief Operating Officer of Ogilvy Digital, said, “These recognitions reflect the breadth of capabilities we’ve built across strategy, creative, content, experience design, technology and performance marketing. The fact that the work was recognised across so many different disciplines demonstrates our ability to apply creativity to a wide range of business challenges and objectives. We’re proud that this achievement spans multiple clients, categories and types of work, reflecting both the versatility of our people and our commitment to delivering results.”