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Fitch affirms Abans at ‘AA(lka)’; Outlook Stable

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Handing over the agreement by Anthony Watson – Country Manager Sri Lanka and Maldives at Visa ( second from left ) to Lakshman Silva, CEO DFCC Bank (Third from left ) Nalin Dissanayake – Director MS & A Sri Lanka and Maldives at Visa Worldwide PTE Ltd ( first from left) Denver Lewis – Vice President/Head of Cards, DFCC Bank ( second from right ) and Chrishan Jayamanne, Manager – Merchant Acquiring, DFCC Bank (first from right) are also in the picture.

Fitch Ratings has affirmed Sri Lanka-based consumer-durable retailer Abans PLC’s National Long-Term Rating at ‘AA(lka)’. The Outlook is Stable. Fitch has simultaneously affirmed the ‘AA(lka)’ rating on Abans’ outstanding senior unsecured debentures and the ‘F1+(lka)’ National Short-Term Rating on its commercial paper.

The affirmation reflects our expectations that the healthy performance of Abans’ core operations will counterbalance the higher risks of its Colombo City Centre (CCC) real-estate project. The Stable Outlook is based on our belief that Abans’ leverage, defined as net lease adjusted debt/operating EBITDAR including the full consolidation of Abans’ immediate parent Abans Retail Holdings (Pvt) Limited (ARH) and CCC, will rise only temporarily above our negative sensitivity of 6.0x in the financial year ending 31 March 2022 (FY22) even if the impending sale of its finance subsidiary and other deleveraging plans do not materialise.

Resilient Core Operations: We expect Abans’ revenue to rise by 8% in FY21, despite the challenging economic environment, amid strong demand for IT products, reduced competition from the informal sector and low interest rates. Its revenue fell 22% yoy in 1QFY21 due to an island-wide lockdown and movement restrictions, before recovering 25% yoy in the next two quarters. We do not expect similar movement restrictions amid lower infections and an ongoing vaccination drive, limiting the incremental impact on Abans’ consumer-durable sales.

Challenging Demand Conditions: Fitch expects Sri Lanka’s GDP to grow by 4.9% in 2021 (2020 estimate: -3.6%) on a lower base and a gradual return to economic normalcy. However, recovery that is weaker than our forecast could dampen demand for consumer durables as they are mostly non-discretionary. Abans has reduced sales financed by in-house hire purchase schemes to cut its incremental exposure to rising local unemployment, falling disposable income and a softening exchange rate.

Leverage to Peak in FY22: We expect Abans’ leverage to spike to 6.7x in FY22 (2.4x in last 12 months to December 2020) with the consolidation of LKR10 billion in CCC debt and LKR4.5 billion in debt we have assumed to fund the balance construction costs and any cash flow shortfalls. CCC’s consolidation will add 2.0x-2.5x to Abans’ leverage in FY21-FY23. Leverage should ease from FY23 with improved cashflows from CCC. The proposed sale of Abans Finance PLC (A(lka)/Rating Watch Evolving), if finalised in FY22, should reduce leverage by around 0.9x.



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Hemas Consumer strengthens portfolio with L’Oréal partnership in Sri Lanka

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Hemas Consumer, the leading manufacturer and distributor in Sri Lanka’s beauty and personal care sector has strengthened its portfolio of offerings in a groundbreaking partnership with the world’s number one beauty company, L’Oréal. With this partnership Hemas Consumer obtains distributor rights to leverage its sales network and innovative marketing approaches in taking L’Oréal’s wide range of beauty and personal care brands across Sri Lanka.

Commenting on the new partnership, Sriyan de Silva Wijeyeratne, Managing Director, Hemas Consumer & Executive Director Hemas Group said, “We have spent over fifty years building successful and strong consumer brands in Sri Lanka. In keeping with our promise of consumer delight and trust, we are elated to partner a world-class cosmetics group like L’Oréal expanding our existing portfolio with the world’s most sought-after beauty and personal care products.

We are well equipped in our distribution process with island-wide sales channels to serve all parts of the country. I believe this partnership will revolutionize Sri Lanka’s beauty care industry and more prospects await as we continue to look ahead with L’Oréal.”

Sabrina Esufally, Director Business Development and Innovation at Hemas Consumer said, “This partnership will enable Sri Lankans to access the iconic brands and solutions created through years of research and innovation by L’Oréal. In the fast evolving and dynamic beauty industry, the combined strength of Hemas’s local heritage and penetration, and L’Oréal’s global technology and trust is the perfect recipe for consumer delight.”

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DFCC Bank supports industrial excellence by partnering CNCI Achiever Awards

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DFCC Bank PLC, stepped up once again for the 3rd consecutive year to partner with the Ceylon National Chamber of Industries (CNCI) as the principal sponsor and official banking partner of the CNCI Achiever Awards 2020.

The CNCI Achiever Awards was held for the 19th consecutive time to recognize the outstanding efforts of exceptional performers who have molded their respective industries with innovative solutions, while overcoming challenges and meeting the demands of their clientele. This year, the event was recently held under strict health guidelines at the Galadari Hotel in Colombo. 

Commenting on the sponsorship, Chief Executive Officer of DFCC Bank PLC Lakshman Silva stated, “We are pleased to have partnered with the Ceylon National Chamber of Industries (CNCI), as the Main Sponsor and Official Banking Partner of the 19th CNCI Achiever Awards 2020. DFCC is honored to partner in reconciling successful Sri Lankan businesses from various industrial sectors. Our partnership with this prestigious awards programme aligns seamlessly with our commitment to foster and reward industrial growth across the country and support local entrepreneurs in MSME & SME sectors.”

 

 

 

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Lanka SSL triumphs with National Gold and Top Ten Awards

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CNCI Achiever Awards 2020

Lanka Special Steel Limited (Lanka SSL), a trusted name in wires and a fully-owned subsidiary of E B Creasy & Company PLC, was recently awarded the coveted National Gold Award under the Extra Large category in the Manufacturing Sector at the Achiever Awards 2020 for Industrial Excellence.

The annual event organized by the Ceylon National Chamber of Industries (CNCI) was held in March 2021 at Colombo, and celebrated some of the leading industrialists in the country for their tremendous and continued efforts in uplifting and promoting quality standards, productivity, growth and strategy, R&D, employee welfare and others whilst contributing to both the society and economy at large.

‘We are immensely proud to have been recognized with two very prominent awards at this year’s CNCI Achiever Awards. It is a huge leap from just winning a Merit Award the last time around, and this incredible achievement certainly reflects our highly ambitious plans to strive for continued excellence. We would like to thank our valued customers and all stakeholders. We are grateful to our hardworking and committed staff at Lanka SSL who have made this possible,’ said Pravin De Silva, CEO of Lanka SSL.

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