Crisis-hit Nation Lanka records Rs. 1.3 mn profit
The quarterly financial report of Nation Lanka PLC for the period ended 31st March 2011 reveals dramatic turnaround of the group far exceeding the expectations of the investor public. The group which faced financial crisis in the past has recorded a net profit of Rs. 1.3 million in the quarter under review compared to a massive loss of Rs. 509 million for the corresponding period of last year. The earnings per share vastly improved from minus Rs.12.80 to Rs.0.05 positive. For the 12 month period ending 31st March 2011 -losses have been reduced to Rs. 216M compared to previous year with a massive loss of Rs. 1071 M. Accordingly the negative earnings per share has been reduced from Rs. 42.52 to Rs. 5.21.
The company which was under close supervision of the Central Bank was recently acquired by a very capable set of private sector management and a sum of Rs. 500 million has been injected to the company by way of a private placement by the new management. In addition, a sum of Rs. 300 million has been raised by way of a rights issue and this positive factor would be reflected in the next financial statement. For instance it would result in the net asset value per share increasing from Rs.0.05 to Rs. 1 .55.
The management has been very prudent in its investment strategy and accordingly a substantial portion of the Rs. 800 million mobilized has been invested in government securities at present. It is expected with the increase in lending with high return would enhance the profitability in the current financial year.
The company which devoted much time on the restructuring and rehabilitation of the company in the past after achieving success has now embarked on the expansion of business for greater profitability as follows:
a) It is expected the license to operate as a margin provider would be approved by the Securities and Exchange Commission of Sri Lanka shortly. For this specific purpose Nation Lanka Capital Ltd has been formed as a subsidiary and initial funding would be a proposed substantial debenture issue ensuring satisfactory margin.
b) Diversion of investments from low yielding treasury bills presently at 7% to loans and advances and margin trading which may give additional margin of around 6% to 7%.
c) The company expects approval to function as a finance company from the central bank shortly which would facilitate mobilization of deposits increasing the capacity to lend and profitability.
d) Nation Lanka Finance a subsidiary approved by the Central Bank as a leasing facilities provider too is expected to perform better with the increased economic activity in the country.
e) Ceylinco Stock Broking Company with a full member license which is a money spinner would transfer broker credit to Nation Lanka Capital Ltd, once approval is granted and this would facilitate enhancement of credit presently restricted and increased profitability.
f) The Millenium Housing Developer Ltd has now turned profitable and it is expected to generate substantial profits in the current financial year.
It is also expected the company would record a substantial net profit during the current financial year with further steady progress in the coming years. Nation Lanka Plc is a success story out of several loss making companies of Ceylinco Group and the President as Minister of Finance should be commended for the initiative taken to successfully rehabilitate the company.
During the current financial year the group would emerge as a leading conglomerate in the financial sector with varied functions such as housing, property development, stock broking, leasing, hire purchase, loans, deposit, mobilization and pawning.
There have been takeover bids of the company in the past and with the achievement of financial stability and substantial potential for growth ,now this effort may be intensified by a few conglomerates during next few months. Some analysts estimate with the goodwill the bid price could be even higher than the current market price.
source - www.dailymirror.lk
The company which was under close supervision of the Central Bank was recently acquired by a very capable set of private sector management and a sum of Rs. 500 million has been injected to the company by way of a private placement by the new management. In addition, a sum of Rs. 300 million has been raised by way of a rights issue and this positive factor would be reflected in the next financial statement. For instance it would result in the net asset value per share increasing from Rs.0.05 to Rs. 1 .55.
The management has been very prudent in its investment strategy and accordingly a substantial portion of the Rs. 800 million mobilized has been invested in government securities at present. It is expected with the increase in lending with high return would enhance the profitability in the current financial year.
The company which devoted much time on the restructuring and rehabilitation of the company in the past after achieving success has now embarked on the expansion of business for greater profitability as follows:
a) It is expected the license to operate as a margin provider would be approved by the Securities and Exchange Commission of Sri Lanka shortly. For this specific purpose Nation Lanka Capital Ltd has been formed as a subsidiary and initial funding would be a proposed substantial debenture issue ensuring satisfactory margin.
b) Diversion of investments from low yielding treasury bills presently at 7% to loans and advances and margin trading which may give additional margin of around 6% to 7%.
c) The company expects approval to function as a finance company from the central bank shortly which would facilitate mobilization of deposits increasing the capacity to lend and profitability.
d) Nation Lanka Finance a subsidiary approved by the Central Bank as a leasing facilities provider too is expected to perform better with the increased economic activity in the country.
e) Ceylinco Stock Broking Company with a full member license which is a money spinner would transfer broker credit to Nation Lanka Capital Ltd, once approval is granted and this would facilitate enhancement of credit presently restricted and increased profitability.
f) The Millenium Housing Developer Ltd has now turned profitable and it is expected to generate substantial profits in the current financial year.
It is also expected the company would record a substantial net profit during the current financial year with further steady progress in the coming years. Nation Lanka Plc is a success story out of several loss making companies of Ceylinco Group and the President as Minister of Finance should be commended for the initiative taken to successfully rehabilitate the company.
During the current financial year the group would emerge as a leading conglomerate in the financial sector with varied functions such as housing, property development, stock broking, leasing, hire purchase, loans, deposit, mobilization and pawning.
There have been takeover bids of the company in the past and with the achievement of financial stability and substantial potential for growth ,now this effort may be intensified by a few conglomerates during next few months. Some analysts estimate with the goodwill the bid price could be even higher than the current market price.
source - www.dailymirror.lk
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