Debt restructuring delays seen as sowing confusion among stock market circles
By Hiran H.Senewiratne
CSE trading yesterday was unable to maintain the previous day’s trading momentum due to speculation that the delay in the internal debt restructuring plan had created some confusion among stock market investors, market analysts said.
It is said that the debt restructuring process was expected to be completed in September but speculation in some sections revealed that it would likely be completed by November. That has created some confusion among the investors, which negatively impacted the stock market, analysts said.
“Majority of the selling pressures was borne by the tile counters and tile holding companies, market sources said.
The main All- Share Price Index was down 42.25 points, while the most liquid index S&P SL20 declined by 2.7 points. Turnover stood at Rs 893 million with one crossing. The crossing took place in JKH, which crossed 3.2 million shares to the tune of Rs 453 million and its shares traded at Rs 140.
In the retail market top seven companies that mainly contributed to the turnover were; JKH Rs72 million (520,000 shares traded), Watawala Plantations Rs 29.8 million (410,000 shares traded), Sunshine Holdings Rs 29.6 million (687,000 shares traded), Expolanka Holdings Rs 19.9 million (140,000 shares traded), Lanka IOC Rs 15.5 million (124,000 shares traded), Elpitiya Plantations Rs 15.8 million (158,000 shares traded) and Ceylon Cold Stores Rs 15.3 million (393,000 shares traded). During the day 22.8 million share volumes changed hands in 8000 transactions.
High net worth and institutional investor participation was noted in PGP Glass Ceylon, Lanka IOC and Windforce Limited. Mixed interest was observed in HNB, Expolanka Holdings and Ceylon Cold Stores, while retail interest was noted in Industrial Asphalts, Browns Investments and Access Engineering.
The Banking sector was the top contributor to the market turnover (due to Hatton National Bank), while the sector index gained 1.15 per cent. The share price of HNB closed flat at Rs 120.The Energy sector was the second highest contributor to the market turnover (due to Lanka IOC), while the sector index increased by 3.37 per cent. The share price of Lanka IOC increased by Rs 4 to Rs 134.
PGP Glass Ceylon, Expolanka Holdings and Ceylon Cold Stores were also included among the top turnover contributors. The share price of PGP Glass Ceylon moved up by 30 cents to Rs 20.10.The Central Bank terminated a cash margin requirement on import letters of credit imposed over the previous 12 months to limit imports, as liquidity injection triggered forex shortages and a currency collapse.In an order issued under the monetary law, the Central Bank imposed a 100 per cent cash deposit margin on 843 imports on May 19, 2022 and February 16, 2023 to discourage imports.
Sri Lanka plans to lift import controls on 100 items which were banned during forex shortages in the past two years, which was hurting small and medium industries, State Minister for Finance Shehan Semasinghe said.Sri Lanka had controlled imports of 3,000 items denoted by HS codes out of a total of 8,000 during the past two years. The controls were then brought down to 1,000 as they hurt small and medium industries which depended on inputs.
The rupee pegged at Rs 302.80/303.10 against the US dollar in the spot market yesterday, while bond yields were steady, dealers said. A bond maturing on 01.09.2027 was quoted at 26.80/90 per cent, steady from Wednesday’s close at 26.85/27.00 per cent.The rupee was at Rs 302.80/303.10 against the US dollar in the spot market yesterday from Rs 303.50/304.20 a day earlier.
Hela Apparel Holdings completes FY 2022/23 with resilience, amidst a challenging operating environment
The fourth quarter of FY 2022/23 marked the close of a challenging year for Hela Apparel Holdings PLC. While revenue of Rs. 20.5 Bn in Q4 represented a 40.6% increase in the same period of the previous year, this was primarily driven by the impact of the rupee depreciation. In US Dollar terms, quarterly revenue declined by 9.6% year-on-year. The drop in US Dollar revenue, however, is smaller than the 19.7% year-on-year decline recorded during Q3, as consumer demand in the Group’s key export markets remained relatively resilient.
The tentative stabilisation in demand conditions during the fourth quarter, alongside the proactive cost control measures taken by the organization contributed to an improvement in profit margins. The Group’s gross profit margin increased to 13.5% in Q4, compared to 10.0% in Q3, as capacity utilisation rates improved across the Group’s manufacturing facilities. Operating profit margins also improved, supported by greater optimisation of distribution and administration expenses. That said, elevated finance costs driven by the ongoing rise in global US Dollar interest rates were a significant drag on profitability. As a result, the Group recorded a post-tax loss of Rs. 257 Mn in the fourth quarter.
For the full year ended 31st March 2023, the Group’s revenue increased by 69.3% to Rs. 95.1 Bn. Nonetheless, the significant deterioration in market conditions during H2 eroded accumulated profits, and the Group closed the year with a post-tax loss of Rs. 1,038 Mn. Despite this, Hela’s balance sheet remained in a robust position with the Net-Debt-to-Equity ratio closing FY 2022/23 at 1.6, compared to 1.8 at the same point of the previous year, supported by improvements in the working capital cycle.
In a statement accompanying the financial results, the Company noted that it expects the challenging operating environment to continue into the first half of FY 2023/24 as consumers in its key export markets remain under pressure from high inflation. In this context, it will continue to focus on proactively strengthening its strategic customer partnerships based on its long-term value proposition as a leading global apparel supply chain solutions provider.
The organization also intends to remain agile in the evolving operating environment and consider additional proactive steps to manage costs and ensure a return to profitability. Several of the strategic initiatives taken during FY 2022/23, with a precise focus on process improvements, digital systems, and supply chain management are also expected to support the improvements in profit margins in the coming quarters.
Hela Apparel Holdings PLC is a social capital-focused company built on the principles of inclusivity, equity, and climate stability. With over three decades of industry experience, Hela focuses on building strategic partnerships with global brands to provide apparel supply chain solutions with distinctive advantages. The organisation has a global presence with 10 manufacturing facilities across Sri Lanka, Kenya, Ethiopia, and Egypt, as well as design centres in Sri Lanka, the US, the UK, and France, providing direct employment to over 20,000 people. Innovative, ethical, and sustainable apparel manufacturing is at the centre of Hela’s operations. With numerous accolades for sustainability, the organization was recently endorsed as a signatory to the UN Global Compact and was awarded the ISO 14064-1:2018 certification for quantification and reporting of greenhouse gas emissions across the Group for the second consecutive year.
Calais Dentelles announces the sale of ‘NOYON’ – Noyon Lanka acquires 100 years of lace heritage
In groundbreaking industry news, Noyon Lanka (Pvt) Ltd., a subsidiary of MAS Holdings, and DESSEILLES CALAIS, a subsidiary of the CALAIS DENTELLES holding company, announced the sale of NOYON CALAIS’ IP rights and other intangible assets to Noyon Lanka.
NOYON CALAIS is a French lace manufacturer known for a 100+ years of heritage in the industry. This Intellectual Property (IP) acquisition now positions Noyon Lanka as an industry leader in lace manufacturing, combining the legacy and heritage of NOYON CALAIS SAS and MAS Holdings’ technical competency and manufacturing excellence. This sale gives the opportunity for the French business DESSEILLES CALAIS to focus on their main luxury core market.
The IP and other assets acquired enable Noyon Lanka to draw inspiration, create and commercialize lace products and manufacture lace products under the trademark ‘Noyon’. Additionally, Noyon Lanka will now be the owner of all ‘Noyon’ trademarks belonging to Noyon Calais and will own all their archives of sketches, drafts, and samples of lace and embroidery fabrics from the 19th and 20th centuries.
With the acquisition, Noyon Lanka enhances its ability to provide high-quality lace products to customers worldwide, drawing upon and preserving the rich history and heritage of lace manufacturing in France.
Noyon Lanka’s CEO, Ashiq Lafir, commenting on the acquisition, said, “This acquisition will enable us to expand our product design offerings and strengthen our leadership position in lace manufacturing globally. We are humbled and proud to take ownership of NOYON CALAIS’ remarkable legacy and combine it with our technical expertise to create beautiful, innovative lace products for our customers”.
Sébastien Bento Soares, the Directeur Général – CEO of CALAIS DENTELLES, the parent company of NOYON CALAIS, added that “This asset sale enables DESSEILLES CALAIS to focus on our core luxury market and ensures that the rich history and legacy of Noyon’s lace continues to effectively serve its long-time customers, who have come to rely on Noyon’s heritage in lace to provide some of the world foremost brands with the finest lace designs that their customers have adorned over many generations”.
Noyon Lanka was established in 2004 when Noyon Calais France, an industry expert in knitted and leavers lace, partnered with MAS Holdings. Today, Noyon’s lace creators and designers launch over 450 designs each year, with collections ranging from multi-way stretch, high tenacity lace to engineered lace for fabric.
In addition to its production facilities in Sri Lanka, the company has a global footprint with a manufacturing presence in Indonesia and China.
In the image from left to right: Sébastien Bento Soares (Directeur Général – CEO of Calais Dentelles), Pascal Cochez (Chairman of Cochez group and Calais dentelles), Olivier Noyon (Shareholder – Noyon Lanka) and Ashiq Lafir (CEO – Noyon Lanka Pvt. Ltd.).
Nippon Paint Lanka sponsors painting of Sri Lanka’s tallest Buddha statue
Nippon Paint has donated the paint required to paint the tallest Buddha statue in Sri Lanka. Built by the Methsaviya Sansadaya, it is located at the Mahiyangana Purana Rajamaha Viharaya.
“History records Mahiyanganaya as the first place visited by the Lord Buddha nine months after receiving enlightenment,” said Vidyakeerthi Prof. Chandana Jayaratne, President of the Meth Saviya Sansadaya. “It is also recorded that the Lord Buddha donated a lock of hair to the leader of those who heard his preaching and embraced the noble path. This leader who was known as King Saman (Known today as Saman Deviyo), enshrined the relics and built the first Dagoba in Mahiyanganaya. This has been gradually increased in height during later years. On completion, this will be the tallest Buddha statue in Sri Lanka at 84-feet. The statue was unveiled on Sunday May, 28, 2023.”
Nemantha Abeysinghe, General Manager, Nippon Paint Lanka, said they were very happy to be associated in such a noble venture. “It is an honour for us to be able join the Meth Saviya Sansadaya to have the statue painted with high-quality, weather-resistant, and long-lasting Nippon Paint. Buddhism is the religion of the majority in Sri Lanka and we consider this as a contribution from Nippon Paint to the propagation of religion and culture in Sri Lanka.”
“We are deeply grateful to Nippon Paint Lanka for their noble gesture in donating not one but five coats of paint to withstand the heavy rains, winds and sunshine at this location,” Prof. Jayaratne said.
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