BRS Morning Shout

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BRS MORNING SHOUT

05th August 2016

COMPANY UPDATE
1. RCL (LKR 118.00) Q1 FY 17 EPS LKR 5.64 (+11.1% YoY)
ROYAL CERAMICS LANKA PLC- RCL

NP for the period increased 1.1% YoY to LKR 712mn

PATMI for Q1 FY 17 grew 11.1% YoY to LKR 625mn

Segmental PBT for the three months is as follows :

EBIT margin 15.7% (Q1 FY 16 15.2%)

GP margin improved to 36.1% (Q1 FY 16 32.9%)
RCLs net revenue for Q1 FY 17 grew 6.8% YoY to LKR 5.49bn
Segmental net revenue for the three months ending June is a s follows :

Tiles segment LKR 599mn (+8.1% YoY)

Sanitary ware- LKR 78mn (+500% YoY)
Paints - loss LKR 17mn (-42% YoY)
Plantations - loss LKR 68mn (-28%)
Packaging- LKR 29mn (-41% YoY)
Aluminium LKR 57mn (+256 YoY)

Tiles segment LKR 3.56bn (+1.4% YoY)

Sanitaryware- LKR 468mn (+82.1% YoY)
Paints- LKR 22mn (-19.5% YoY)
Plantations- LKR 417mn (-12.6% YoY)
Packaging- LKR 533mn (-2.8% YoY)
Aluminium LKR 494mn (+41.4% YoY)

Dividend Yield 6.7% at CMP

BRS total return on the stock LKR 147 as at last review (+24% to CMP) : BUY
Forward PER- 3.8x (FY 20167 EPS LKR 30.60)
PBV- 0.9x (NAV per share LKR 133.69)
Sector PER- 8.4x, Sector PBV-1.6x

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BRS Morning Shout

65, Braybrooke Place, Colombo 2, Sri Lanka
research@bartleetreligare.com, +94 11 5220200

2. EXPO (LKR 6.80) Q1 FY 17 EPS LKR 0.09 (-18.2% YoY )

EXPOLANKA HOLDINGS PLC - EXPO

Net earnings for Q1 FY 17 down by 10.73% YoY to LKR 272.39mn

EBIT margin for Q1 FY 2.7% (Q1 FY 16 2.9%) due to non cash write down in passive investments.

GP margin for Q1 FY 17- 19% (Q1 FY 16 16.3%)

Net revenue for Q1 FY 17 up 7.4% YoY to LKR 14,954mn.

PER 12.4x (TTM EPS- LKR 0.55)

PBV- 1.1x (NAV per share- LKR 6.13)

Sector PER- 15.8x, Sector PBV- 1.2x

DPS LKR 0.15 (FY 2017)

DY 2.2%

Gearing 16% (Q1 FY 16- 15%)

Segmental Breakdown

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BRS Morning Shout

65, Braybrooke Place, Colombo 2, Sri Lanka
research@bartleetreligare.com, +94 11 5220200

3. WATA (LKR 18.90) Q1 FY 17 EPS LKR 1.01 (+84% YoY)

Watawala Plantations PLC WATA

WATA reported a bottom line 84% higher YoY to LKR 238mn (Q1 FY 16 LKR 130mn)

Net finance cost declined to LKR 10mn from LKR 20mn previously.

EBIT margin in Q1 FY 17 was 18% compared to 10% the last year.

Company reported an EBIT of LKR 291mn during the quarter ( Q1 FY 16 LKR 167mn)

GP margin in Q1 FY 17 was 21% (Q1 FY 16 was 12%)

Cost of sales declined 12% YoY to LKR 1.3bn

Top line too reflected a marginal drop of 2% YoY to LKR 1.65bn.

Revenue from tea segment dropped 4% YoY to LKR 1bn. Although the segment continued to make
losses during the quarter, WATA managed to cut down the losses to LKR -79 from LKR -136mn previously.

Palm oil segment continued to be the major contributor to WATA bottom line. Net profit from palm oil
segment increased to LKR 294mn from LKR 227mn.

Although the revenue from Export segment declined 10% YoY, net profit increased to LKR 14mn from
LKR 10mn.

Gearing 10%

PER 7.1x (TTM EPS LKR 2.64)

PBV 0.9x (NAV LKR 21)

Sector PER- nm, PBV - 0.6x

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BRS Morning Shout

65, Braybrooke Place, Colombo 2, Sri Lanka
research@bartleetreligare.com, +94 11 5220200

BUSINESS

ECONOMY

The Central Bank yesterday

Sri Lanka's Commercial Bank

INTERNATIONAL

announced a series of key

of Ceylon will sell up to 7.0

global stock prices on Friday

measures to improve effi-

billion rupees of 5 and 10 year

after the Bank of England

ciency, transparency, govern-

subordinated bonds, Fitch

(BoE) launched a potent post

ance and regulation of the

Ratings said. (4)

-Brexit stimulus campaign,

but some caution before a

Government securities market.

(1)

Fitch Ratings said 3.0 billion

big U.S. jobs report limited

rupees of senior debt of Sri

Asian shares joined a rise in

Tourist arrivals crossed the 1

Lanka's Senkakadagala Fi-

million mark in July reflecting a

nance has been given a final

near 17% growth year on year.

rating of 'BBB+(lka)'. (5)

Oil prices eased in early trading on Friday, but remained

well above this week's lows

This years end July performance is the best ever with 1.17

gains. (8)

The SBI Group is to acquire a

as traders covered short po-

strategic 25% stake in Sri

sitions after profiting from

million tourists visiting, up by

Lankan brokerage First Guard-

sharp declines since June. (9)

16.7% from 1.0 million a year

ian Equities through an investearlier. (2)
ment via a private place

ment. (6)

Primary dealers in Sri Lanka's

Nihal Fonseka, a veteran

banker has been appointed as

been asked to trade, and re-

Real wages in Japan rose the

most in almost six years in
June, data showed on Friday,

over-the-counter market for

government securities have

a member of the governing

port deals on Bloomberg . (3)

board of Sri Lanka's central
bank. (7)

but the gain was exaggerated

by the effect of falling prices,
highlighting the government's struggle to pull the
economy out of deflation.
(10)

See page no 06 for website references

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BRS Morning Shout

POLITICAL UPDATE

Chinese Ambassador Yi Xianliang has expressed support for an effort to establish a Sri Lanka- China Joint Committee which will include investment on key ventures including city construction and technical training, the Chinese embassy said in a statement yesterday. - http://www.ft.lk/article/559574/China-Sri-Lanka-JointCommittee-to-oversee-investment#sthash.xaUpeMLk.dpuf

Una McCauley presented her credentials to Minister of Foreign Affairs, Mangala Samaraweera as the new
United Nations Resident Coordinator and United Nations Development Program (UNDP) Resident Representative, at the Foreign Ministry yesterday. - http://www.ft.lk/article/559540/New-UN-Resident-Coordinator-to-SriLanka-presents-credentials-to-Foreign-Minister#sthash.HLJGz5rr.dpuf

FOREX MARKET (as at 04.08.2016)

Buying
(Rs)

Selling
(Rs)

Source: www.cbsl.gov.lk

COMMODITY MARKET (as at 04.08.2016)

Source: http://www.nasdaq.com/markets/commodities

www.bartleetreligare.com

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BRS Morning Shout

E-paper References
1.

http://www.ft.lk/article/559571/Central-Bank-improves-efficiency-and-transparency-of-Govt-securities-market

2.

http://www.ft.lk/article/559562/Tourist-arrivals-cross-1-million-mark-in-July

3.

http://www.economynext.com/
Sri_Lanka_gilt_primary_dealers_asked_to_trade_on_Bloomberg_terminals-3-5780-3.html

4.

http://www.economynext.com/Sri_Lanka_s_Commercial_Bank_to_sell_5_to_10_year_bonds-3-5779
-17.html

5.

http://www.economynext.com/Sri_Lanka_s_Senkadagala_Finance_bonds_rated__BBB+(lka)_-35784-3.html

6.

http://www.ft.lk/article/559557/Japanese-financial-powerhouse-makes-strategic-investment-in-SriLankan-brokerage

7.

http://www.economynext.com/
Veteran_banker_Nihal_Fonseka_appointed_to_Sri_Lanka_Central_Bank_board-3-5783-1.html

8.

http://www.economynext.com/Asia_gains_on_BoE_easing_boon,_key_US_jobs_data_awaited-35782-11.html

9.

http://www.reuters.com/article/us-global-oil-idUSKCN10G02O

10. http://www.reuters.com/article/us-japan-economy-wages-idUSKCN10G001

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