IPO investors richly rewarded with a Rs. 10,000 investment earning Rs. 8.6 million in dividends
Dilmah Ceylon Tea Company PLC (previously Ceylon Tea Services) has posted an excellent result within a challenging environment in the year ended Mar. 31, 2020, growing revenue eight percent and gross profit 14% over the previous year; but the bottom line declined two percent owing to what its chairman, Mr. Merril. J. Fernando called a “remarkable” 46% decline in the exchange rate.
Commenting that the outlook for the global economy appeared bleak, he said how long the corona virus will last God alone knows, adding “we can only pray for it to disappear soon and bring hope and comfort back to our homes and our lives.”
Dilmah, with the consent of its shareholders, has increased its contribution to the MJF Charitable Foundation from 10% to 15% of pre-tax profits to be spent towards addressing inequality and wider social and environmental concerns as a part of its core business. This will enable a significant increase in the foundation’s humanitarian operations.
The company’s key numbers for the year under review were: revenue up 8% to Rs. 11.61 billion, operating profit up 25% to Rs. 1.98 billion, pre-tax profit up 17% to Rs. 1.99 billion and the after tax profit down 2% to Rs. 1.56 billion. Dilmah’s total assets stood at Rs. 17.3 billion against liabilities of Rs. 4.97 billion.
Fernando, in his chairman’s review in the company’s recently published annual report, had drawn attention to the extraordinary rewards enjoyed by investors in what was then Ceylon Tea Services over the years. An investment of Rs. 10,000 in a thousand shares at the company’s initial public offering in 1982 had yielded Rs. 8.6 million in dividends and the original1,000 shares had increased to 20,000 via several bonus issues.
He has noted that the cost of an original ten-rupee share in the hands of the investor has as a result come down to fifty cents and the original 10,000-rupee investment is now valued at Rs. 531,000 at the current market price of the Dilmah share.
“Such is the power of Ceylon Tea in the hands of committed investors in the industry,” he has said.
It is not only investors who have benefited from Fernando’s conviction that “business is a form of human service.” He has said youth from the plantation community assisted by the MJF Foundation’s scholarship program have produced among others doctors, magistrates and chefs.
He says that the tea industry which is being written off by many, offers enormous potential to investors who believe in it. Government authorities responsible for tea can turn it around if they have a realistic vision for the industry, Fernando said welcoming recent interest and initiatives by government in finding solutions to longstanding issues in plantations and exports. Such efforts wold deliver benefit to the country’s economy and Ceylon Tea.
“If the tea industry is strategically managed in the hands of capable people with proven expertise, export earnings could well reach USD 5 billion within the next five years. Bulk tea exports should be discouraged and value added exports should be generously incentivised for the social end economic benefits they bring,” he said.
“Part of the additional income from value added export must be used to advertise and promote quality brands. This is likely to encourage bulk tea exporters to change course.”
People’s Bank celebrates 75 years of Independence by offering gifts to newborns
People’s Bank celebrated Sri Lanka’s 75thNational Independence at a modest ceremony held at their Head Office which was followed by a series of island wide initiatives.People’s Bank’s ‘Birth of Freedom’ programme which commences on every Independence Day was carried out this year as well. Under this concept, People’s Bank gifts Rs.2,000/- worth of an ‘IsuruUdana’ Gift Certificate to every baby born between the 1st and 14th of February.
People’s Bank launched this programme in 2006 with the vision of instilling national pride and encouraging parents to plan for their children’s future. Parents can open an ‘Isuru Udana’ Children’s Savings Account at any People’s Bank Branch using the Gift Certificate.
Director of the Castle Street Maternity Hospital Dr. Ajith Danthanarayana, Director of De Soysa Hospital for Women in Borella Dr. Pradeep Wijesinghe, People’s Bank Senior Deputy General Manager (TB & OCS) Rohan Pathirage, Deputy General Manager (Retail Banking) Renuka Jayasinghe, Deputy General Manager (Strategic Planning, Performance Management & Research) Jayanthi Kurukulasooriya, Deputy General Manager (Risk Management) Roshini Wijerathna, Deputy General Manager (Banking Support Services) Nipunika Wijayaratne, Deputy General Manager (Channel Management) T.M.W Chandrakumara, Head of Marketing Nalaka Wijayawardana, Assistant General Manager (Retail Banking) Nalin Pathiranage, Assistant General Manager (Human Resources) Manjula Dissanayake, Colombo North Regional Manager S.L.M.A.S Samarathunga, Colombo South Regional Manager M.S Kanakka Hewage, Borella Branch Manager W.A.N Udayangani, Town Hall Branch Manager Tiral Pradeep, Deputy Director of De Soysa Hospital for Women in Borella, Dr. K.M Nihal, Administrative Officer of Castle Street Hospital for Women S.M.T.A.R. Bandara, Nursing officers along with hospital staff were also present at the event.In line with the above all People’s Bank branches across the country initiated ‘Nidahase Upatha’ activities island wide.
Norlanka Manufacturing Trincomalee receives LEED Gold Certification
Norlanka Manufacturing Trincomalee was recently awarded the prestigious LEED Gold Certification (Leadership in Energy and Environmental Design).Norlanka, one of Sri Lanka’s largest sustainable exporters of baby and kidswear, has an extensive ESG (Environmental/Social/Governance) strategy and understands the responsibility it has concerning the future of a sustainable apparel industry. Therefore, ethical sourcing, in particular working with responsible supply chain partners has been a critical operational necessity.
The LEED certification is a globally recognized symbol of sustainability achievement, and it is backed by an entire industry of committed organizations and individuals paving the way for market transformation. It’s awarded for projects that have earned points by adhering to prerequisites and credits that address carbon, energy, water, waste, transportation, materials, health and indoor environmental quality. Buildings consume energy and resources at an alarming rate, therefore the LEED rating system is the most widely used green building rating system, as it provides a framework for healthy, efficient, carbon and cost-saving green buildings.
LEED takes multiple areas into account with varying sub-criteria when certifying a building such as location, transportation, sustainability of the site, construction, water efficiency, energy and atmosphere, materials and resource, waste management, indoor environment quality, innovations and more.
Chief Innovation Officer of Norlanka, Buddhi Paranamana stated, “This LEED Gold certification is a testament to our constant drive to improve our sustainability efforts. This award marks yet another milestone in Norlanka’s journey towards becoming carbon neutral by 2025. Since 2010 we’ve constantly been learning how to do things in a more sustainable way. I would like to congratulate our team for obtaining this certification. It showcases dedication towards achieving sustainable excellence while achieving our goals and providing customers with high-quality products.”
SL bondholders ready for debt restructuring talks with authorities– with conditions
Sri Lanka’s bondholders have told the International Monetary Fund (IMF) that they are prepared to engage with Sri Lankan authorities in debt restructuring talks consistent with the parameters of the global lender’s program.The Ad Hoc Group of Sri Lanka bondholders conveyed its stance in a letter directed to IMF Managing Director Kristalina Georgieva on Friday (Feb. 03).
“The Bondholder Group through its Steering Committee stands ready to engage quickly and effectively with the Sri Lankan authorities to design and implement restructuring terms that would help Sri Lanka restore debt sustainability and allow the country to re-gain access to the international capital markets during the IMF Programme period.”
The Bondholder Group acknowledged the Sri Lankan authorities’ engagement with their official creditors towards a resolution of the current crisis and restoration of debt sustainability.
The Bondholder Group further acknowledged that such engagement has recently resulted in the Indian government delivering letters of financing assurances to the IMF, committing to support Sri Lanka and contribute to its efforts to restore debt sustainability by providing debt relief and financing consistent with the IMF Extended Fund Facility Arrangement and the IMF Programme targets indicated in the India’s letter to the global lender.
Sri Lanka Bondholder Group Letter to IMF stated:
Based on the limited information available to us at this time, including information contained in the India Letter, we understand that the IMF Programme’s debt sustainability targets are identified as (i) reducing the ratio of public debt to GDP to 95% by 2032, (ii) limiting the central government’s annual gross financing needs to GDP ratio to 13% in the period between 2027 and 2032, and central government annual foreign currency debt service at 4.5% of GDP in every year between 2027 and 2032 and (iii) closing of the external financing gap.
The Bondholder Group hereby confirms it is prepared to engage, through its Steering Committee, with the Sri Lankan authorities in restructuring negotiations consistent with the parameters of an IMF Programme and the targets specified therein (the “IMF Programme Targets”), which the Bondholder Group understands to be the targets identified in the India Letter; it being recognized that these negotiations will necessarily be further informed by the receipt of the forthcoming DSA. We would note that the finalization of an agreement will also be subject to the satisfaction of the following conditions:
The central government’s domestic debt – defined as debt governed by local law – is reorganized in a manner that both ensures debt sustainability and safeguards financial stability. Assuming that annual gross financing needs should not exceed 13% of GDP in the period between 2027 and 2032, whilst allowing for central government annual foreign currency debt service to reach 4.5% of GDP in every year between 2027 and 2032, domestic gross financing should therefore be limited at 8.5% of GDP for the period 2027-2032.
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