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Import substitution boosts profitability for Royal Ceramics

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New players expected to enter the lucrative industry with more than Rs. 15 billion worth investments

by Sanath Nanayakkare

According to a valuation note released by First Capital Research, Royal Ceramics (RCL group), the dominant local player in tile and sanitaryware products has turned out be a key beneficiary following the import restrictions employed by the government, which resulted in a complete import ban on all tile and sanitaryware products.

As a result, RCL’s pre-Covid 52% market share had surged across all segments to 75% in floor tiles and 82% in wall tiles.

RCL earnings growth had surged over 100% to reach Rs. 2 bn for the third quarter of financial year 2021 (3QFY21), compared to the Rs. 1 bn in 3QFY20 with 9MFY21 earnings expanding by 72% to Rs. 3.3bn.

Profitability was mainly supported by the surge in gross profit margins, reduction in finance cost and increased contribution from Group\s associate profits, FC Research stated.

“RCL’s gross profit margins for the quarter was enlarged by 236bpsYoY to 39% amidst strong growth in volume and economies of scale supported by higher capacity utilization nearing 100%.”

“Meanwhile, RCL’s EBIT (operating earnings over operating sales margin). and net profit margins jumped 424bps and 691bps respectively”.

“RCL plans to increase tile and bath ware capacity by 10% expansion in the existing plants while also building a new plant in order to further expand overall capacity by 20% during FY22E. New tile manufacturing plant is expected to target more price sensitive segment of the market,” the note added.

“The ceramic industry is expecting more than Rs. 15 bn in new investments, expanding industry production capacity with potential new players likely to enter the lucrative industry increasing competition over the next few years,”

“We expect RCL to maintain profitability of Rs. 4.5bn-5.0 bn in the next few years,” FC Research said.

 

 



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Cabraal briefs Chief Incumbents on Port City Project Commission Bill

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On the instructions of the President and the Prime Minister, State Minister of Finance Ajith Nivard Cabraal on April 19 visited the Asgiriya Chapter, the Malwathu Chapter and the Chief Prelates of the Amarapura and Ramanna Maha Nikayas and briefed them on the relevant draft commission bill on Port City Project.

Cabinet Minister Prasanna Ranatunga, Minister of State Lohan Ratwatte, Minister of State Kanaka Herath, MP Wasantha Yapa Bandara and MP Kokila Gunawardena were also present on the occasion.

 

 

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Growing importance of training for nurses taking care of patients with NCDs

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To keep pace with the rapid expansion and increasing complexity of elderly home healthcare, training needs of home healthcare nurses must be identified and subsequent training programs implemented. English Nursing Care conducts training sessions on a weekly basis covering a variety of care needs for Non-Communicable Diseases (NCD) such as diabetes. The World Health Organisation (WHO) record that NCDs are estimated to account for 75% of total deaths in Sri Lanka.

Furthermore, according to the Sri Lankan Ministry of Health “although people are living longer, they live more years suffering from disease and disability, mainly from NCDs; life expectancy at birth in Sri Lanka is 74.9 years but healthy life expectancy at birth is only 67.0 years.” This has a significant impact on quality of life.

English Nursing Care Sri Lanka works towards improving the quality of life of the elderly living with NCD’s by training nurses on the most advanced and developed methodologies brought through years of experience internationally and locally. Being responsible for the well-being of your loved ones is pivotal in the service they provide.

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SriLankan Airlines welcomes Indian delegation to Sri Lanka

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SriLankan Airlines in a bid to recommence Indian tourist arrivals to Sri Lanka under the proposed bio-bubble tourist arrival concept successfully completed a familiarization tour for Indian media and travel trade professionals recently. A delegation of tour operators, agents, and senior editors representing influential media institutions concluded a familiarization tour in Sri Lanka.

The delegation spent six nights and seven days touring the country while being subjected to mandatory PCR testing and other health guidelines imposed by the Ministry of Health. Upon arriving in Sri Lanka, the delegation toured the most sought-after local tourist sites including Dambulla, Kandy, Nuwara Eliya, and Bentota. The tour was initiated by SriLankan Holidays and the ground arrangements for the tour were handled by Jetwing Travels, Aitken Spence, Sri Lanka Convention Bureau (SLCB), and Hamoos Travels.

The main purpose of their participation in this fam tour was to restore confidence in visiting Sri Lanka, especially among the Indian tourists to provide them in-depth knowledge on how the country’s tourism industry operates under the bio-bubble concept. Apart from visiting various places, they experienced the stringent health and safety protocols adopted by the country in resuming tourism under the “bio-bubble” concept allowing tourists to roam around without mixing with the local population.

During their stay here, the delegation was hosted for a virtual meet-and-greet with SriLankan Airlines Chairman Ashok Pathirage, Chief Executive Officer Vipula Gunathilleka, and Head of Worldwide Sales & Distribution Dimuthu Tennakoon. The discussion focused on the airline’s operations to India, vaccination and quarantine travel arrangements between the two countries, current safety measures, and guidelines pertaining to the bio-bubble concept. They lauded the effort taken by officials to make their trip a memorable one.

The Indian delegation was highly impressed with the opportunities they were given to travel and explore the country and its exclusive holiday prospects for the enthusiastic traveller. This fam tour was a manifestation of the immense potential of Sri Lanka as a post-covid travel destination enticing the Indian traveller.

 

 

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