Business

‘National carrier matters, but profitability matters more’

Published

3 years ago

2022/08/15

By Sanath Nanayakkare

Delaying the privatisation of SriLankan Airlines will not help, however the steps towards privatisation of the national carrier should be taken in consultation with international experts who understand the aviation industry, Thilan Wijesinghe, Chairman and CEO of TWCorp (Pvt) Ltd., said at ‘Let’s Reset Sri Lanka –Reform Now’ conference hosted by Advocate Institute, recently.Thilan who is knowledgeable about many aspects of SriLankan Airlines’ operational outlook said so responding to a query on how debt-laden SriLankan Airlines can attract potential buyers to push a privatisation process forward.

“We need to enhance value within Sri Lankan airlines within a short term. However, some of the recommendations made to achieve this objective may become contentious; for example, extending the ground handling for a limited period of time and what sort of charges to be levied for budget carriers. We need to understand that airlines’ ground handling and catering have different valuation principles. So bundling all these together and saying that we want to attract a strategic investor won’t work. First and foremost, we must generate separate PnLs (profit and loss) in order to obtain the optimum valuations and that is a job for specialists,” he emphasised.

Elaborating on the topic he said:

“SriLankan ground handling and catering operations are the profitable ones, and then you have the bilateral routes where open skies policy applies, to China, India and Europe. What is really important is to essentially demonstrate that the government has thought through a path to profitability and present that particular forecast. It can be made with experts in order to show the potential investors that a path of profitability for SriLankan Airlines is in fact available as and when Tourism turns around.”

“Why should a State have a national airline? Data has shown that for each dollar an airline brings in as revenue from a tourist, it actually generates four dollars of benefit to that country. But can it justify the losses that Sri Lankan Airlines has been incurring? No. So the overall strategy still holds true even today for privatisation of Sri Lankan airlines. We failed in our attempt to privatise it during the government of 2015-2019 primarily on account of issues that arose due to Easter Sunday attack, and secondly, the infamous 52-day constitutional crisis after which the board and the chairman were changed. Also there were policy and administrative delays and thus SriLankan remains as an airline owned by the State to date. However, the overall privatisation strategy of the Airline remains the same. First and foremost, what should be the vision to retain and have a national carrier hopefully under private ownership in the not too distant future? So one of the key visions decided at that time was that SriLankan Airlines should follow what is called a ‘value model ‘which is something in between a legacy carrier and a budget airline while focusing on regional markets because we have to compete with Emirates and Qatar Airlines,” , he said.

“I was involved with the privatisation of SriLankan Airlines in 1998. At that time we issued requests for proposals and three bids; from Emirates, French Airlines and Korean Air. It was decided by PERC to go ahead with Emirates which made the highest offer, and thus a 44% stake of SriLankan Airlines was divested for USD 73 million on a 10-year management contract where the chairman of SriLankan Airlines would be appointed by the government and there would be certain checks and balances imposed under the management contract. Board control remained with the government particularly in order to retain the national-airline- status.”

During his presentation, he showed a slide to the audience containing SriLankan Airlines’ performance during its Emirates partnership and after the government acquired all the shares of the airline from Emirates in 2008, implying the fact that ‘a national carrier matters, but profitability matters more.”

Thilan Wijesinghe, one-time chairman of the BOI, co-founded Asia Capital PLC in the early 1990s which became Sri Lanka’s largest investment bank and stockbroker during this time, executing several landmark acquisition and IPO deals. He was also a founder director of PSIDC , a government owned company funded by the World Bank and ADB that was set up to provide long term loans for PPP infrastructure projects.

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Business

Hemas posts resilient nine-month results

Published

9 hours ago

2026/02/11

Sahan Weerasooriya

Ashish Chandra, Group Chief Executive Officer

During the quarter, macroeconomic conditions reflected selective cost pressures alongside areas of stability, with a moderated net impact on the Group’s performance.

The Sri Lankan Rupee depreciated by 2.4%, driven by higher import-related foreign exchange outflows and cyclone-related economic disruption. This created some pressure on imported inputs, particularly in Consumer Brands and Healthcare, which was partially mitigated through pricing actions, procurement discipline and cost optimisation initiatives.

Monetary conditions tightened, with the Average Weighted Prime Lending Rate (AWPLR) rising by 89 basis points to 8.94%. The impact on the Group was contained due to its strong balance sheet, negative net gearing and disciplined funding strategy, limiting the effect on finance costs.

Inflation remained low at 2.1%, helping to contain operating cost escalation and preserve consumer affordability. In parallel, softer global palm oil and crude oil prices provided relief on input and energy costs, partially offsetting currency pressures.

In December 2025, the IMF approved US$ 206 million in emergency financing to support Sri Lanka’s cyclone recovery. Sovereign credit ratings were maintained during the period, supporting overall macro stability and business confidence.

Impact from Cyclone Ditwah

Cyclone Ditwah, which struck Sri Lanka on 25 November, was one of the most severe natural disasters experienced by the country in recent decades. The cyclone resulted in an estimated US$ 4.1 billion in direct economic damage—approximately 4% of national GDP—impacting homes, agriculture, infrastructure and livelihoods, with nearly two million people affected nationwide.

The Group’s manufacturing and service facilities did not sustain any direct physical damage, reflecting the effectiveness of proactive preparedness measures and robust business continuity frameworks across our operations. However, in the affected areas, the broader business ecosystems were significantly disrupted due to damage to personal assets, commercial premises, inventory losses, and disruptions to public transportation & logistics infrastructure, adversely impacting our employees, distributors and retail partners, including pharmacies.

These factors led to temporary supply-chain and distribution disruption during November and December, alongside a short-term deterioration in consumer sentiment. As a result, demand softness was observed during the latter part of the third quarter, particularly within the Consumer Brands and Healthcare sectors. Demand has since stabilised, with encouraging recovery trends evident, entering the fourth quarter.

In parallel, the Group mobilised a coordinated, multi-sector disaster response, working closely with government authorities, community organisations and local stakeholders. The Group committed approximately Rs. 30 million in financial and in-kind humanitarian assistance, focused on immediate relief for vulnerable communities. In addition, the Group has factored in Rs. 200 million for targeted support to small and medium enterprises across our value chain through extended credit terms, stock replenishment and business restoration initiatives. (Hemas)

Business

Aviyana Ceylon chairman Dr. Thisara Hewawasam wins 2025 People’s Award for Business Leadership

Published

9 hours ago

2026/02/11

Sahan Weerasooriya

By Ifham Nizam

At a time when Sri Lanka is seeking to reposition itself as a premium tourism destination amid economic recovery and declining mass-market margins, Dr. Thisara Hewawasam, Chairman and Founder of Aviyana Ceylon, has been recognised with the 2025 People’s Award – Lifetime Achievement (VIP Category) for his contribution to business leadership and tourism-led economic transformation.

Dr. Hewawasam received the award at the 2025 People’s Awards ceremony held recently in Colombo, in recognition of his role in pioneering Sri Lanka’s first seven-star hotel project, Aviyana Ceylon, and for advancing globally competitive standards within the local hospitality sector.

The award was presented by Vietnam’s Ambassador to Sri Lanka Trinh Thi Tam, along with Parliamentarian Harshana Rajakaruna and Iconic Awards Director Asanka Athapattu, reflecting growing diplomatic and regional attention to Sri Lanka’s private-sector-driven growth narrative.

According to the official citation, the honour recognises Dr. Hewawasam’s leadership as a homegrown entrepreneur who translated long-term vision, discipline and innovation into a hospitality venture designed to compete at the highest international level. His work was acknowledged for strengthening Sri Lanka’s tourism brand while supporting national economic recovery through high-value investment, skills development and employment creation.

Crucially, the citation highlights that Dr. Hewawasam’s contribution extends beyond a single project. By positioning Aviyana Ceylon at the ultra-luxury end of the market, he has helped shift the national tourism conversation away from volume-led growth towards value-based tourism, a model increasingly viewed by policymakers as essential for improving foreign exchange earnings without overburdening infrastructure or natural ecosystems.

Industry analysts note that Sri Lanka’s tourism sector is at an inflection point, where attracting fewer but higher-spending visitors has become a strategic necessity. In this context, flagship developments such as Aviyana Ceylon are seen as confidence signals to international investors, demonstrating that locally led projects can meet global benchmarks in design, service quality and brand ambition.

The People’s Award—conferred only once in a recipient’s lifetime—serves as a public endorsement of leadership that delivers sustained national impact.

In recognising Dr. Hewawasam, the award highlights the growing role of domestic entrepreneurs in shaping Sri Lanka’s post-crisis growth model, particularly in sectors capable of delivering long-term foreign exchange stability.

Business

Corporate quarterly results continue to snag CSE vibrancy

Published

10 hours ago

2026/02/11

Sahan Weerasooriya

The CSE commenced on a positive note yesterday but later the All Share Price Index slumped due to corporate quarterly results not reaching expected levels, market analysts said.

Amid those developments both indices indicated mixed reactions. The All Share Price Index went down by 103.17 points, while the S and P SL20 rose by 2.48 points. Turnover stood at Rs 3.55 billion with seven crossings.

Those crossings were: Tokyo Cement 2.58 million shares crossed to the tune of Rs 268 million; its shares traded at Rs 104, ACL Cables one million shares crossed for Rs 100 million; its shares traded at Rs 100, Cargills Ceylon 75000 shares crossed for Rs 54.7 million; its shares traded at Rs 730, LB Finance 302000 shares crossed for Rs 49.5 million; its shares traded at Rs 164, Tokyo Cement (Non-Voting) 570,000 shares crossed for 49 million and its shares traded at Rs 85.90, Seylan Bank 430,000 shares crossed for Rs 47 million; its shares sold at Rs 109.50 and HNB (Non-Voting) 70600 shares crossed for Rs 28 million; its shares traded at Rs 369.

In the retail market top seven companies that mainly contributed to the turnover were; Cargills Rs 206.6 million (283,000 shares traded), Renuka Agri Rs 153.5 million (9.6 million shares traded), ACL Cables Rs 148 million (1.45 million shares traded), Easter Merchants Rs 140 million (8.11 million shares traded), TJ Lanka Rs 109 million (2.8 million shares traded), Ceylon Land and Equity Rs 106 million (4.9 million shares traded) and Colombo Dockyard Rs 76.6 million (517,000 shares traded). During the day 158 million share volumes changed hands in 34681 transactions.

It is said that construction related companies and manufacturing and financial services related companies performed well. Top negative contributors to the ASPI were Senkadagala Finance (down Rs 68.50 at 837), Cargills (Ceylon) (down Rs 21 at 730), and Dialog Axiata (down 60 cents at Rs 32.70).

Yesterday the rupee was quoted at Rs 309.50/55 to the US dollar in the spot market, from Rs 309.43/50 the previous day, dealers said, while bond yields dropped significantly.

A bond maturing on 15.12.2029 was quoted at 9.45/55 percent.

A bond maturing on 15.03.2031 was quoted at 9.82/87 percent.

A bond maturing on 01.10.2032 was quoted at 10.15/20 percent, down from 10.17/21 percent.

A bond maturing on 01.06.2033 was quoted at 10.45/50 percent, down from 10.50/54 percent.

A bond maturing on 01.11.2033 was quoted at 10.60/62 percent.

A bond maturing on 15.06.2034 was quoted at 10.65/70 percent, down from 10.77/81 percent.

A bond maturing on 15.06.2035 was quoted at 10.72/75 percent, down from 10.95/98 percent.

An auction of Rs. 90,000 million Treasury bills is scheduled to take place today and an auction of Rs 51,000 million Treasury bonds tomorrow.

By Hiran H Senewiratne