The private sector drives the economy, regardless of the enabling environment. The private sector will have to invariably face challenges, either within the country or globally but it is the inherent duty of the private sector to evolve and continue the growth momentum by not only seeking opportunities within Sri Lanka but by also expanding beyond. The Business Today TOP 30 2018-2019 provides insights into the resilience of corporate Sri Lanka as well as the changing economic landscape.
The financial year 2018-2019 started with great promise. The economy started to show revival with growth in various sectors gathering momentum. Tourism was growing and there was much expectation in the country. However, both external and internal challenges began to hamper the progress of the country, thus straining the private sector to venture forward. While the economy slowed down, the private sector continued, yet with a more wait and see approach. However, as reflected by the Business Today TOP 30 2018-2019 corporate Sri Lanka did not falter but revised their strategies to enable growth even during challenging times. The private sector of Sri Lanka has faced immense pressure during the 30-year conflict but have survived and continued to support the country. Therefore, Sri Lankans have the ability to face recent challenges and persevere. Even in this current subdued environment the private sector propels the country forward.
Yet, for any country to progress it is paramount to have a stable Government and clear economic policies that articulate the direction of the economy. There cannot be political instability, because in turn, this could cause instability in social and economic spheres as well. There is a domino effect. As a country we need to move away from focusing inwards, and believe that we are global players.
There are corporates who have sought opportunities overseas and have performed well, thus generating revenue outside and bringing it into the Sri Lankan economy. This needs to continue, and policies should be conducive for businesses to engage in such endeavors. Furthermore, Sri Lanka should become more open to foreign investment that would develop the country as well as provide greater livelihood opportunities. Sri Lanka has to progress further to realize its potential as a tourism destination. With a product offering such as ours, we have not yet garnered the opportunities available and promoted the country.
Business Today TOP 30 2018-2019 indicates the manner in which the banking and financial sector has performed even through challenging times. They have streamlined their strategies and processes to ensure that while the organization performs the customers too benefit. Larger conglomerates too have performed but in a more subdued manner. Interestingly the ranking reflects a change in the positions of the corporates as well as new performers entering the list, which is encouraging.
Sri Lanka needs to utilize the opportunities available and capitalize on its position to become a global player. If not, Sri Lanka could be left behind as other nations progress ahead of us. Thus, it is essential that we look beyond the individuals. It is the responsibility of the Government and the private sector to ensure that Sri Lanka moves forward in all spheres.
Hatton National Bank was number one in the first-ever Business Today TOP corporate ranking in 1997, which at that time was Business Today TOP 10. They have entered the list at various positions reaffirming the Bank’s stability and growth. After 22 years, Hatton National Bank is yet again at number one in the Business Today TOP 30. This is undoubtedly due to the untiring efforts of Jonathan Alles MD/CEO who has utilized his knowledge and experience to take the Bank into a new era, and the determination of the HNB team. Dinesh Weerakkody, Chairman brings with him expertise from diverse sectors, with focus on both the public and private sector, and thus has provided immense support to Hatton National Bank.
The Business Today TOP 30, 2018-2019 saw the entrance of three new companies; Dilmah Ceylon Tea Company at number 27; Citizens Development Business Finance at number 28; and Pan Asia Banking Corporation at number 30. Furthermore, it was encouraging to note Softlogic Lanka reentering the Business Today TOP 30 this year.
Founded by Merrill J Fernando, Chairman, Dilmah has taken Ceylon Tea to the world. Merrill J Fernando was pivotal in reviving the Ceylon Tea industry. The launch of Dilmah in Australia in 1988, represented a paradigm shift since it was the first time that a producer from any tea, coffee or cocoa producing country had succeeded in offering their product directly to the consumer. Merrill J Fernando has built the business through his passion and determination. It is a Group that should be emulated by other corporates.
Sri Lanka needs to utilize the opportunities available and capitalize on its position to become a global player. If not, Sri Lanka could be left behind as other nations progress ahead of us. Thus, it is essential that we look beyond the individuals. It is the responsibility of the Government and the private sector to ensure that Sri Lanka moves forward in all spheres.
Business Today congratulates the Business Today TOP 30 2018-2019 for their strong performance and for being an example of striving for greatness.
The Business Today TOP 30 is based on published information of companies listed in the Colombo Stock Exchange and social considerations. The companies have been selected on the basis of their performance recorded during the financial year ending December 31, 2018 and March 31, 2019 with the assistance of KPMG Sri Lanka
1.Hatton National Bank
Hatton National Bank (HNB) ranks at number one in the Business Today TOP 30 2018-2019, after 22 years. This achievement can be attributed to the dynamic leadership of Jonathan Alles, MD/CEO and Dinesh Weerakkody, Chairman. The Bank has steadily progressed through the years with a strategic approach and prudent policies that have benefited all stakeholders. Group profit after tax of 19.1 billion rupees recorded in 2018 was the highest for financial services group in the country. HNB has always been resilient and proactive in terms of challenges posed by policy changes globally and domestically. HNB remains resilient with a total capital ratio of 15.41 percent and market capitalization of 101 billion rupees, which accounts for three percent of total market capitalization. HNB has prioritized digitalization while focusing on customer centricity. The Bank accounts for 81 percent of Group profits and 94.6 percent of Group assets. Therefore, operating income grew by 22.2 percent to 60.7 billion within a challenging environment. Changes in taxation had an effect on the profitability. Therefore, operating profit before VAT, NBT and DRL of 29.3 billion rupees reflects a growth of 8.3 percent where PAT is 15.5 billion rupees. HNB reached 1.1 trillion rupees in assets, which was a growth of 13.8 percent. The retail banking business contributed 18.7 billion rupees to the total operating income. Loan book growth was 16.5 percent and deposit growth was 14.8 percent. Personal loans and leasing were the highest contributors to growth of the retail loan book during the financial year. SME is a key segment for HNB and it delivered a strong performance recording an operating income of 18.5 billion rupees. Microfinance is also an important segment for HNB. They have identified the need to support entrepreneurs and small businesses to enable growth in the economy. On boarding clients to digital channels has been an ongoing process and has been encouraging for HNB, which is shown in the growth of digital revenue.
The HNB team is led by the strong leadership of Jonathan Alles, MD/CEO and also the overarching guidance of Dinesh Weerakkody, Chairman that encourages and drives the team for greater performance and customer satisfaction. With a clear strategic direction that is propelling HNB forward. Their resilience and ability to adapt to change is indeed admirable.
2. Commercial Bank of Ceylon
Commercial Bank of Ceylon rises to number two in the Business Today TOP 30 2018-2019. Continuing on its upward trajectory, the Bank has remained true to its core values and has recorded strong performance within a challenging environment. Total assets of the bank grew to over one trillion rupees, which is a growth of 14 percent. Market share increased by 11 percent. By being prudent in its approach, customer centric, innovative and also its quick response has enabled the Bank to remain relevant and provide value for all stakeholders.
Growth in PBT slowed down to 10.39 per cent due to the implementation of SLFRS 9 and the decrease in asset quality. Due to the changes in the tax structure, the growth in profit after taxes recorded 5.8 percent at 17.54 billion rupees. Group PAT was 17.9 billion rupees, an increase of 7.4 percent compared to the previous year. Furthermore, higher levels of nonperforming advances also contributed to the increase in impairment charges. However, the Bank ensured adequate cushioning against non-performing advances and maintained a stable and growth profitability. A Basel III compliant debenture for ten Billion rupees was issued during the year strengthening Tier II capital. Basell III compliant debentures of 7.5 billion was approved for 2019 and a further issuance of 7.5 billion rupees in case of over subscription. The Group has the largest international footprint owned by a private Sri Lankan bank. Italy, Bangladesh, Maldives and Myanmar contributed 11.38 percent of the Group’s total assets. In Bangladesh, Commercial Bank is the best performing foreign bank. Bangladesh business contributed a PAT of 2871.3 million rupees, which accounted for 15 percent of the Bank’s total profit. The Group continues to strategically expand in the region, identifying potential for growth.
New initiatives were introduced to build synergies between customers and other stakeholders. Bank on Wheels solution for the agricultural sector also provided financial support to farmers. This enabled financial inclusion as well as prepare communities for the future of banking. The Group continues to focus on green banking and streamline processes.
The strong and dynamic team is headed by Dharma Dheerasinghe, Chairman and S Renganathan MD/CEO, who took over from Jegan Durairatnam end July 2018. This has enabled the Bank to face any challenge due to the rapidly evolving adverse domestic and global developments. This means not only ensuring the team and customers are geared to capitalize on the best of digital innovations but also having a strategic plan in place to navigate the changing macroeconomic and regulatory landscape.
3. LOLC Holdings
LOLC Holdings rises by one position to number three in the Business Today TOP 30 2018-2019. The Group continued to make timely investments in strategic locations with a longterm vision. LOLC Holdings recorded a PBT of 26.82 billion rupees during the financial year under review, while PAT was 19.64 billion rupees. LOLC also crossed trillion rupees in total assets. Financial services was the key contributor to Group performance. Steady growth was seen in all three Sri Lankan financial institutions, which contributed 28 percent to total assets. LOLC Finance recorded a PAT growth of 171 percent. Commercial Leasing and Finance recorded a PBT of 2.04 billion rupees, with a focus on capital adequacy and governance. As the microfinance sector was greatly affected by the challenging economic environment LOLC Development Finance incurred a loss of 154 million rupees. With a focus on collection and recovering by the three financial institutions there was a control on lending, which enabled better NPLs. LOLC Life Assurance and LOLC General Insurance also performed well during the financial year.
LOLC continued to invest overseas, with 85 percent investments in Cambodia, Myanmar, Pakistan, Indonesia and Philippines. PRASAC in Cambodia provided substantial return on investment in dollar terms through the Group’s 70 percent holding in the Company. Expanding to Myanmar, LOLC Myanmar Microfinance Company, which is a greenfield operation, is the third largest in the country, with an asset base of USD 52.4 million, and PBT of USD two million. LOLC aims to position Pak Oman as one of the main players in Pakistan. LOLC invested in Indonesia by acquiring a controlling interest in PT Sarana Sumut Ventura, expanding its global footprint. The Group also invested in the Philippines through LOLC ASKI Finance and LOLC Bank Philippines.
In the non-financial sector LOLC diversified investments in growth sectors in Sri Lanka, Sierra Leone and Maldives. Sunbird Bio-energy Sierra Leone was a highlight, being one of the largest agricultural projects in Africa, encompassing an integrated farm that generates power, sugar and bio ethanol. The non-financial sector in Sri Lanka, plantation and leisure showed growth, though subdued. The Group is also established in the Maldivian leisure sector as LOLC Group secured real estate in Malé. With the Group’s balanced and diversified investments, it has continued to grow in Sri Lanka and overeas. Seeking markets beyond Sri Lanka would reap greater benefits.
4.John Keells Holdings
J ohn Keells Holdings is listed at number four in the Business Today TOP 30 2018- 2019. Group revenue increased by 12 percent to 135.46 billion rupees. However, the financial year was a challenging one for the Group, where economic growth was slow due to pressures from external and domestic environments. Recurring Group EBITDA decreased by 11 percent to 25.67 billion rupees, which was due to the decline in performance of leisure, financial services, property and retail industry groups. Furthermore, the city hotel sector was impacted due to a significant increase in room supply in the market. In addition, the closure of the property in Maldives too adversely effected the performance of the Group.
The Sri Lanka resorts segment maintained average room rates and occupancies despite the challenging political and economic climate. Further, intense competition was faced from both graded and informal sectors, especially in the coastal areas. The transportation industry segment reported a revenue of 33.73 billion rupees and EBITDA of 4.56 billion rupees. South Asia Gateway Terminals, the Group’s ports and shipping business, maintained its growth momentum with a volume growth of 11 percent.
The retail industry sector recorded a revenue of 55.75 billion rupees and EBITDA of 2.15 billion rupees, contributing 36 percent and eight percent respectively. The frozen confectionery business recorded a volume growth of ten percent, that was strengthened by the expansion of its product portfolio, following the commissioning of the new factory. The Information Technology sector recorded revenue of 851 million rupees and EBITDA of 192 million rupees. The “Tri-Zen” residential development project, is a partnership with Indra Traders owned by Indra Kumara Silva.
The performance of JKH during the financial year may not have been its best. However, considering the challenges in the external and domestic environment, the Group has continued to venture forward, steadily showing growth in diversified sectors. Having contributed immensely to JKH, Susantha Ratnayake retired from the Group after four decades, and as Chairman in December 2018. And in January 2019, Krishan Balendra was appointed to the helm. He will undoubtedly continue to take JKH forward. Corporate Sri Lanka looks up to JKH for inspiration, thereby it is essential that the Group maximizes on opportunities available in Sri Lanka as well as globally
5. Sampath Bank
S ampath Bank is ranked at number five in the Business Today TOP 30 2018-2019. The Bank was able to record steady growth during the financial year. Retail advances grew by 10.6 percent. The Bank also continued to make strides into the SME segment. Furthermore, the corporate loan book too showed growth. Greater focus was given to off-shore businesses as well.
Sampath Bank was able to manage its NPL ratio at 3.69 percent, where the Bank focused on strengthening the recovery process and assisting clients to face the challenging period. Gross income grew by 24.5 percent to reach 115.3 billion rupees. Fee based income was also increased both in trade and nontrade categories. PBT grew by 10.5 percent to record 18.3 billion rupees. The collective impairment charge increased due to the deterioration of the portfolio quality during negative economic conditions.
Investing in the team has been a priority for Sampath Bank, where 70.4 million rupees was spent on training and development activities. Having been in the industry for over 30 years, Sampath Bank continues to be customer centric. Nanda Fernando, Managing Director has continued to inculcate efficiency and dynamism in the team to enable greater performance of the Bank.
Focus has been given to capitalize on available opportunities to strengthen the customer base and also positioning themselves as the bank for all Sri Lankans. While expanding within Sri Lanka may result in growth, as a strong bank it may be prudent for Sampath Bank to venture into foreign markets to enable greater business and opportunities.
6.Ceylinco Insurance
Ceylinco Insurance rises one position to number six in the Business Today TOP 30 2018-2019. The Company has efficiently adjusted itself to a new corporate structure. It has always been resilient in facing challenges and has been successful in being able to create opportunities. Ceylinco Insurance contributes to the economy not only in terms of having two insurance companies; General and Life, but also a presence in power, education, healthcare and financial services.
Ceylinco Insurance recorded a consolidated PAT of 8.7 billion rupees, which is an increase of four percent. PBT was 11 billion rupees, which was an increase of 20 percent. Ceylinco General Insurance and Ceylinco Life Insurance retain their market leadership in the general insurance and life insurance segments. While the insurance industry in Sri Lanka, in both Life and General, recorded a gross written premium of 175.7 billion rupees during the financial year, Ceylinco General Insurance recorded a premium income of 19.2 billion rupees. This indicated a growth of 6.7 percent. Ceylinco General Insurance recorded a PAT 1.8 billion rupees, an increase of 27 percent. The Company continued to strengthen its portfolio in overseas markets through strategic alliances in United Arab Emirates, Bahrain, Oman, Qatar and Saudi Arabia. Ceylinco Insurance has also performed steadily in other sectors such as health and education as well by providing innovative solutions for clients. Power is also another sector of the Company. The total revenue of the power sector companies is 834.4 million rupees while PAT is 270.1 million rupees which contributed to the overall Group profit. With the aim of developing the renewable power sector, the Company has taken many steps in order to become a larger player in Sri Lanka for this sector. Ceylinco Insurance is also exploring opportunities in Sub–Saharan Africa in the hydro power sector.
Ajith Gunawardena continues to be a strength to Ceylinco Insurance, always focusing on stability and the customers. The strategic direction and the presence of Ceylinco Insurance will contribute to national growth. It would be interesting to see whether the pioneering Company will continue to expand its reach overseas considering that the domestic market may already be saturated
7. Melstacorp
Rising one position from last year, Melstacorp ranks at number seven in the Business Today TOP 30 2018-2019. Group turnover reached 156 billion rupees, while PAT was 8.9 billion rupees. The Group contributed 64 billion rupees as taxes to the Government during this financial year. With the astute and dynamic leadership of Harry Jayawardena, Chairman the Group is bound to make greater strides, while adopting prudent strategies to expand in Sri Lanka and beyond.
The main subsidiary DCSL recorded a PAT of 5.4 billion rupees despite the challenges faced. Periceyl, the second liquor company of the Group saw its profitability shrink due to a notable decline in volumes. Beverage sector revenue reached 87 billion rupees and PAT for the year was 5.8 billion rupees. The Group invested 500 million rupees in the tea and rubber despite adverse external conditions and increased production costs. This was utilized for field development, upgrading the factories and machineries, buildings, agricultural vehicles, replanting and crop diversification. The Group continues to support the plantation sector, though it has been reporting losses, as it is an important sector for the country.
Lanka Bell recorded a positive EBITDA though revenues declined from the CDMA fixed line business. This is due to the changing customer behavior in relation to voice communication. However, revenue from the LTE technology that is used to provide internet connectivity is showing a positive trend. Continental Insurance is gradually gaining market share with a 26 percent increase in gross written premium. The Company recorded a gross written premium of four billion rupees during the financial year. Aitken Spence completed its first full year as a subsidiary of Melstacorp. Aitken Spence derives 43 percent of its profits from overseas operations. It is present in eight countries in the tourism, maritime and logistics sectors. Overseas assets represent 35 percent of total assets of the Aitken Spence Group. Bogo Power continues to generate profits. With Sri Lanka making efforts to restore normalcy and revive the economy in order to continue on a growth trajectory, the private sector will continue to be cautious in their approach. It will be the responsibility of conglomerates such as Melstacorp to lead the way and generate confidence in the economy.
8.Dialog Axiata
Dialog Axiata ranks at number eight in the Business Today TOP 30 2018-2019. The Group has made significant strides as the leading quad play connectivity provider in the country, and has been able to record a good performance despite challenging operating and economic conditions. The Group recorded strong revenue growth across mobile, broadband, pay television and fixed line business segments, with a consolidated revenue of 109.2 billion rupees, which was a growth of 16 percent. This was achieved through growth in consumption and expansion in subscriber base.
Dialog took 17 years to achieve their first 50 billion rupee revenue mark. However, they were able to achieve the next 50 billion rupees within six years. While local voice revenues remained stable, the emerging segments of mobile broadband, fixed and digital services contributed significantly to the overall profile, delivering a growth of 32 percent, 29 percent and 14 percent respectively. Group strategy focused on data leadership, convergence, and digital transformation. The strength of the team as well as the Dialog culture enabled the drive in brand equity. Dialog invested 30.6 billion rupees in network related investments. With the view of strengthening the Group’s 4G leadership journey and also to cater to the exponential growth in data traffic, Dialog increased mobile 4G base stations by 78 percent. Further, fixed 4G base stations were increased by 48 percent. Dialog launched the pre-commercial 5G transmission in December 2018. Dialog’s success stems from its exceptional capabilities of translating its brand strength to brand value across all segments in Sri Lanka.
9. National Development Bank
National Development Bank (NDB) rose to number nine in the Business Today TOP 30 2018-2019. The Group delivered a year of strong financial performance amidst a domestic and external challenging environment due to the determination and hard work of the team led by Dimantha Seneviratne, Group CEO. PAT increased by 28 percent to 5.5 billion rupees. This was due to strong portfolio growth, margin management and cost efficiencies. At Group level, profit attributable to shareholders increased by 47 percent. Net interest income growth was 38 percent and was due to portfolio expansion of 27 percent with the aim of client acquisition and deeper penetration in the retail and SME segments. Portfolio quality declined due to challenging economic conditions, slowdown in industrial sector and political instability. With the implementation of SLFRS 9 financial instruments, NDB saw its impairment charges for loans and other losses increasing to 3.6 billion rupees. NDB’s non performing loan ratio was below the industry average, which is a positive achievement.
NDB’s asset expansion of 24 percent was supported by deposit growth of 27 percent to 348 billion rupees. Measures were taken to strengthen capital by raising 3.4 billion rupees through a rights issue, which increased the Bank’s Tier 1 and total capital ratios to 9.17 percent and 12.63 percent respectively. The retail banking segment recorded sound growth. This was supported by strategic focus on client acquisition, direct to customer marketing and driving cross-sell opportunities. The SME banking segment’s inherent strengths in development banking and deep understanding of industry dynamics have enabled NDB to fortify its position during a short period of time.
The commercial banking segment maintained its position as a relatively higher contributor to the Bank’s assets base. This sector benefited by better wallet management in growth sectors. The project and infrastructure financing segment was a key driver of growth, supported by its strong market position and leveraging on the Bank’s unique competencies in project evaluating and structuring. The Group’s capital market cluster experienced a challenging year due to the prevalent subdued market conditions. However, the cluster successfully maintained its position as the country’s leading investment bank, handling several large equity and debt transactions during the year. By leveraging on its synergies NDB can definitely expand its business and thereby growth to enhance the economic drive of the country.
10. Nestlé Lanka
Nestlé Lanka rises nine positions to be ranked at number ten in the Business Today TOP 30 2018-2019. For over 150 years, Nestlé has built its success on a continuous, and strong strategy that has led to sustainable value creation. Nestlé Lanka utilizes the opportunities garnered through digital innovation to develop personalized experiences with the Company and its products. Thereby the Company is connecting with younger consumers in the digital space, and are leveraging digital marketing and exploring ecommerce platforms as avenues for growth. Continuous innovation is a key differentiator for Nestlé Lanka, fueling growth from within the company. Driven by the purpose to enhance quality of life and contribute to a healthier future, many innovations were launched to cater to the evolving preferences and nutritional needs of Sri Lankan consumers.
As for all, 2018 was a challenging year, especially for the food and beverages industry due to soft consumer confidence and demand, the political uncertainty and a steep devaluation of the Sri Lankan rupee. Nestlé Lanka paid a total of 7.5 billion rupees to local dairy farmers and the local coconut industry for their produce. Thousands of Sri Lankan farmers were supported and trained to help improve the quality and yield of their produce. The Company continues to focus on enhancing and supporting youth employability through various programs. The Company has always been committed to safeguarding the environment and resources for the future, and have thus invested in environmentally friendly initiatives, equipment and technologies. The factory located in Kurunegala is zero-waste disposal, which means that nothing goes to landfill or is incinerated without energy being recovered from the process. Having a strong presence in the country, Nestlé Lanka is confident that the food and beverage market will recover in the near future. They are wellpositioned and established to drive growth through innovative strategies and customer-centric products and programs.
11. Central Finance Company
Central Finance Company ranks at number 11 in the Business Today TOP 30 2018-2019. The Company focused on lending opportunities within their accepted risk tolerance limits, that enabled them to ensure steady growth during a challenging financial year. With a lending approach that strengthened the Company’s credit evaluation procedures, NPA ratio was controlled. Consolidated revenue grew by 15 per cent to record 23.6 billion rupees. Interest income grew at 15.2 percent and Interest expenses at 14.9 percent. As a result, NII increased by 15.43 percent from the previous year. The Company’s consolidated net profit reduced to 5.1 billion rupees, which was a 6.9 percent decrease to the previous year. Impairment charges for the financial year increased to 2,213.6 million rupees. Further, with additional taxation led to a decrease in profit after tax.
The NBFI sector faced a challenging year. Asset base too expanded slowly. The SME segment saw an increase in NPA due to the customers’ inability to service their loans. As a result, sector-wide NPA ratio increased to 7.7 percent during the financial year. Customer deposits continued to strengthen funds. Borrowings grew by 17.1 percent, an increase from the previous year. Deposit growth reduced to 4.4 percent from 29.4 percent, which is significant. PAT of the NBFI sector reduced by 17.2 percent to 21.4 billion rupees. The Company’s total assets crossed the value of 100 billion rupees’ mark to reach 110.3 billion rupees, which was as a result of growth in the loan book. Customer deposits grew by 11.3 percent and deposit liabilities was a cumulative 45.2 billion rupees. Central Finance Company has been a steady presence in the financial sector of Sri Lanka. They have always been prudent in their approach, quietly and diligently making progress.
12. Vallibel One
Vallibel One ranks at number 12 in the Business Today TOP 30 2018- 2019. The Group focused on investing continuously to enhance capacity. Thus a revenue growth of nine percent was experienced together with a PAT of 10.54 billion rupees. Total assets grew by nine percent to 224.98 billion rupees during the financial year.
Being a diversified conglomerate with interests in manufacturing, financial services and leisure sectors, Group revenue grew by nine percent to 66.6 billion rupees. Operating profit grew by 9.2 percent to reach 15 billion rupees. Increased margins in the finance sector muted the pressures experienced in the lifestyle, aluminium and plantation sectors. As the lifestyle and aluminum sectors increased their borrowings to finance capital expenditure, net finance cost increased by 61 percent. Group financial performance was impacted by the debt repayment levy and also the increase in value added tax on financial services. PBT of the Group declined by two percent to 10.5 billion rupees and PAT by 0.5 percent to 6.7 billion rupees.
LB Finance contributed 5.1 billion rupees, which 75 percent of the total Group PAT.
With the reduced momentum in the construction industry, the lifestyle sector, which includes tiles and sanitary ware saw a decline in PAT to 1.9 billion rupees, which is a 27 percent decrease. Furthermore, the aluminum sector though facing a challenging year, was able to record an operating profit of 0.15 billion rupees. The others sector of the Group which includes packaging, mining, insurance brokering, travel, aviation, and shipping recorded a PAT of 0.256 billion rupees, which was an increase from the previous year. The decline in tea and rubber prices saw a decrease in the plantation sector performance, while costs increased as well.
With Dhammika Perera, Chairman as the major shareholder, the Group has continued to make strategic acquisitions and investments. The Group’s focus has always been on reviving mature companies that had not realized their potential before.
13. People’s Leasing and Finance
People’s Leasing and Finance (PLC) ranks at number 13 in Business Today TOP 30 2018-2019. The Group focused on measured growth following structural reforms, revamping the product portfolio as well as identifying new customer segments. During the financial year the Group’s priority was to consolidate enabling stability for the future.
PLC recorded a PAT of 4,416.12 million rupees, which was a growth of 2.48 percent. This was achieved despite the higher taxes and impairment charges. Through the Debt Repayment Levy an additional 436.97 million rupees was paid by PLC. People’s Leasing Group recorded a PAT of 5,011.27 million rupees. Its asset base grew to 185,932.64 million rupees. Overseas expansion in Bangladesh is showing growth though the Group has entered a very competitive market. The product portfolio of the Group, especially leasing, term loans, and working capital loans has differentiated PLC and given an advantage.
NPA ratio was below the industry average to 3.91 percent, attributable to the challenging economic environment.
Impairment charge for the year increased to 1,954.88 million rupees. Return on assets improved to 3.95 percent. Yet profitability in terms of ROE decreased to 15.88 percent. Deposit base continued to grow to reach 88.37 billion rupees, where savings amounted to five billion. PLC maintained capital adequacy ratios at 14.36 percent, as well as 15.20 percent for Tier 1 capital and total capital respectively.
PLC Group has been continuing on its growth trajectory, steadily and prudently. With speed, efficiency, and knowledge in the market, the Group is further stabilized by its association with People’s Bank. With Hemasiri Fernando, Chairman’s direction and support as well as the experience and strategic foresight of A S Ibrahim, CEO and General Manager, the team has always focused on the evolving requirements to cater to a diverse customer base. While the challenges of the external and domestic economic environments have slowed growth, it is essential that large corporates such as PLC continue be dynamic and customer centric in their approach.
14. Nations Trust Bank
Continuing on its upward trajectory, rising through nine positions, Nations Trust Bank (NTB) is ranked at number 14 in the Business Today TOP 30, 2018-2019. With immense focus on technology transformation in the financial services sector, NTB as a young and dynamic bank has continued to gear for the future. NTB recorded a market share of three percent with a profit of 3.7 billion rupees.
NTB recorded a group PAT of 3.7 billion rupees during the financial year, which was a growth of ten percent. Group ROE reached 15.26 percent. Profitability experienced a growth of 25 percent in both fund based and fee based income. This was a result of the expansion of the loan book and also utilizing cross selling opportunities. Due to stringent regulatory and financial reporting requirements together with economic conditions, impairment charges increased from 1.08 billion rupees to 3.27 billion rupees during the financial year.
ly in Information Technology with 880 million rupees, which was a substantial component of capital expenditure. Open API Banking and FriMi continue to perform well, with FriMi reaching one billion Board of Directors Gihan Cooray (Chairman) Renuka Fernando (CEO) 1 Russell De Mel 2 Sherin Cader 3 Arjun Fernando 4 Prasanna De Silva 5 Savanth Sebastian 6 Murtaza Jafferjee 7 Suran Wijesinghe 8 Conrad D’ Souza 9 Rachini Rajapaksa 10 Chanaka Wickramasuriya 11 Sumit Maheshwari rupee transactions during the financial year. The structured finance segment showed progress being the lead in arranging a USD 30 million syndicated term loan facility to an off shore client. Deposits grew by 19 percent with an improved CASA ratio of 25 percent. NTB loan book also also grew by 19 percent. Core capital and total capital ratios improved recording 12.15 percent and 15.59 percent respectively.
Financial performance of NTB was mainly driven by corporate banking, credit cards and leasing. Due to market and challenging economic conditions, SME and consumer banking showed limited growth. This resulted in NTB moving towards low risk segments. Group net interest income grew by 27 percent to record 15.2 billion rupees, which was mainly due to improvement in loans. Advances grew by 19 percent to 222 billion rupees. NTB has always reflected a youthful dynamism and an approach that was made to be more identifiable with the continually evolving lifestyles of the customer. Renuka Fernando, CEO and Gihan Cooray, Chairman, have led the team to achieve great heights.
15. Sri Lanka Telecom
S ri Lanka Telecom (SLT) is ranked at number 15 in the Business Today TOP 30 2018-2019. With an all Sri Lankan team at the helm, the nation’s telecommunication provider has continued to introduce the latest technological solutions to Sri Lanka. SLT embarked on a five-year journey to address evolving needs of the consumer with its Vision 2020. As the only telecommunications provider with Government ownership, SLT focuses on the national socio-economic requirements, which are communicated with all stakeholders. Together with the national policy of digitally empowering all citizens and making Sri Lanka a digital hub, SLT has progressively taken steps to fulfil the nation’s needs. SLT contributed 30 billion rupees in dividend, taxes and levies for the development of the country. SLT accelerated the Fibre to The Home initiative by expanding 4G LTE and ADSL coverage. Furthermore, SLT connected 850 Government institutions island-wide with high-speed fibre connectivity under LGN 2.0. The Tier III National Data Centre in Pitipana, Homagama was launched. All data centres are connected by SLT’s national fibre optic backbone via SEA-ME-WE 5 submarine cable. SLT digitalized internally and geared staff to drive the transformation. Data Centres and Cloud platforms provided by SLT are being adopted by public and private enterprises. SLT has also been selected as the telecommunications provider for the Port City, amidst other development projects. SLT Group revenue crossed 80 billion rupees to reach 81.4 billion rupees. Operating profit saw an impressive increase of 94.3 percent to reach 7.6 billion rupees. Group PAT was 4.9 billion rupees, which was an increase of 25.6 percent.
Mobitel too saw an improvement in performance and contributed 48 percent to revenue and 72 percent in PAT. As a pioneer in South Asia, the launch of Super 3.5G HSPA network, HSPA+ MIMO technology, the successful trial of 4.5G LTE-Advanced Pro technoloy and the launch of the first commercial 4.5G/4G+ mobile network were initiatives taken by Mobitel. SLT Chairman, P G Kumarasinghe Sirisena, has been a calming presence guiding the telecommunication giant and the team to reach their full potential. For the first time, the CEO and COO have been selected from within the organization. Kiththi Perera, CEO and M B P Fernandez, COO have grown and risen to the helm from SLT. Their indepth knowledge and experience have propelled SLT forward. Nalin Perera, CEO, Mobitel too having risen to this position from within, continues to be a strength to the SLT Group.
16. Hemas Holdings
Hemas Holdings rises four positions to be ranked number 16 in the Business Today TOP 30 2018-2019. Despite economic challenges and steep currency depreciation of the past year, the Group concentrated on operational improvements, thus experiencing growth in operating margins, supply chain, and its sales and distribution. Hemas Holdings reached a milestone during the financial year, recording 64 billion rupees in Group revenue with a strong growth of 28.5 percent. During the financial year under review, the company operating profit grew by 33.4 percent while earnings increased by 25.4 percent.
The personal care category achieved domestic revenue growth of 5.9 percent, while the home and personal care recorded an increase of 17.2 percent internationally. The healthcare sector achieved a YoY growth of 20.3 percent. Due to price regulations and currency depreciation, the operating profit for the sector saw a decline of five percent, while earnings decreased by 10.5 percent. The Company’s pharmaceutical manufacturing arm Morison posted revenue growth of 8.7 percent. During the financial year, Hemas Leisure, Travel and Aviation (LTA), reported a 19.4 percent growth achieving revenue of five billion rupees. While Serendib Hotels enjoyed an average occupancy of 91 percent throughout the hotels under its flag, the acquisition of Lantern and partial closure of Avani Bentota for soft refurbishments affected the profitability.
Following the increases in volume in the maritime sector, Hemas Logistics and Maritime achieved a growth of 0.7 percent to record a revenue of 2.8 billion rupees. Over the past seven decades, Hemas Holdings has cultivated a winning mentality backed by strong values, endeavoring to ‘Enrich Lives’ by the efforts of every member of the company.
17.Seylan Bank
S eylan Bank is at number 17 in the Business Today TOP 30, 2018- 2019. Seylan Bank recorded a PAT of 3.2 billion rupees. The Bank celebrated 30 years in operations, weathering many challenges over its journey. The Bank continues to support the SME sector though this segment has been facing a difficult time due to economic challenges. The team at Seylan Bank focused on both existing and potential clients thereby enhancing customer acquisition as well as cross selling.
PAT was affected by the impairment of loans and advances as stipulated by SLFRS 9. Additionally, a long outstanding staff issue was also settled. The Bank continues to achieve consistent growth in its business in terms of deposits and advances, which increased by over 16 percent during the financial year. Total assets grew by 14 percent and enabled stability, in terms of the growth of the Bank in a responsible and sustainable way.
Seylan Bank increased its reach through 170 banking centers and 207 ATMs around the country. This indicated the Bank’s stability and network over the past three decades. Furthermore, 20 multi service counters and 29 cash deposit machines were deployed during the financial year.
Digitalization is a priority as well as developing the retail and corporate business segments. Operations of the branch network have been made more efficient and IT platforms have been strengthened. Kapila Ariyaratne, CEO and the entire team encompass immense experience and are moving forward with vigor
18. DFCC Bank
DFCC Bank ranks at number 18 in the Business Today TOP 30 2018- 2019. The Bank adopted a prudent approach to have a conservative outlook and lend carefully instead of focusing on aggressive growth. As a progressive Bank, DFCC has continued to expand and evolve with the changing requirements of the customer and the country.
atio below industry average, while AArating has been maintained together with capital ratios above regulatory requirements. Basel III and SLFRS 9 was implemented, resulting in additional capital requirements and provisioning during a very challenging period. Tier 1 capital of the Bank improved by 4.5 billion rupees. As the pioneer in development banking in Sri Lanka, with expansion into commercial banking as well, DFCC continued to expand the branch network in key cities and towns around the country. Ten extension offices were converted into branches, while products and services Board of Directors C R Jansz (Chairman) Lakshman Silva (CEO) 1 Jegan Durairatnam 2 P M B Fernando 3 T Dharmarajah 4 S R Thambiayah 5 K P Cooray 6 V J Senaratne 7 L K A H Fernando 8 N K G K Nemmawatta can be accessed through over 3,800 ATMs across the island.
DFCC also recorded a 17 percent growth in the net portfolio and recorded a nine percent increase in net interest income. This is due to the implementation of a prudent growth strategy that is combined with proper management of assets and liability pricing. DFCC has always focused on being a support to the micro, small and medium enterprises, especially where the majority of businesses are female-led and implemented at homes. Furthermore, English language projects that were implemented together with Gateway Language Centre, for 96 students from rural areas was completed with success. C R Janz, Chairman of DFCC Bank since March 2014 contributed significantly to the progress of the Bank. andLakshman Silva, CEO continues to be a dynamic and stabilizing presence. DFCC Bank will definitely utilize banking experience of the team and market knowledge to reach greater heights.
19. CT Holdings
CT Holdings ranks at number 19 in the Business Today TOP 30 2018-2019. As a Group that pioneered the import and distribution in Sri Lanka, following nationalization they diversified into retail and modern trade, diary, beverages, culinary, confectionaries, convenience food, restaurants, properties, banking, and financial services.
Due to the challenging economic and political environment, the Group’s operations were impacted by weak consumer interest. There was a topline growth of 3.4 billion rupees, which was mainly because of the opening of new outlets in retail and wholesale distribution. This sector recorded a revenue of 75.8 billion rupees. The FMCG sector recorded 1.02 billion rupees, a 7.31 percent growth. Though Group revenue saw an increase from last year, operating profits did not show growth. This was owing to the decrease in performance in the retail and wholesale distribution sector due to challenging economic and market conditions and rising costs. Restaurant and entertainment sectors too did not perform well. The FMCG sector saw growth with operating profits increased by 356 million rupees, which was a 17.4 percent increase from the previous year. Overall operating profits saw a decrease of 0.6 billion rupees, which was 9.64 percent from the previous year. Group profit for the year was 2.38 billion rupees. The investment by the Group in property, plant and equipment was 5.3 billion rupees.
The Group continues to journey forward as it has done so for the past 90 years, weathering challenges while focusing on delivering new and innovative products and experiences to customers. Furthermore, the Group’s commitment to the farmers, SMEs and all stakeholders remains thereby providing benefits for all.
20. Softlogic Holdings
S oftlogic re-entered the Business Today TOP 30 at number 20 for the financial year 2018-2019. The Group was restructured during the financial year to strengthen customer value propositions and to invest in sectors with high growth potential. During the year, the retail sector was expanded to include the Group’s telecommunication operations together with the fashion brands, restaurants and electronics.
The retail sector saw expansion enabling a large footprint for the Group. With several international brands as well as the Group’s own brands, Softlogic made significant investments to ensure that customers encountered the same experience as they would do in more developed markets. Softlogic Group recorded 14 percent revenue growth. The retail sector recorded six percent topline growth with 37.7 billion rupees, which was 50 percent of the Group revenue. Retail was the key sector in the Group that contributed 3.2 billion rupees, which was 38 percent to Group operating profit and 151 million rupees to Group PAT.
In the health sector, the Group acquired Hemas Southern Hospital in Galle thereby expanding the Asiri Group of Hospitals portfolio. This sector, recorded 12 percent revenue growth to 13.5 billion rupees though there was an increase in price regulation in the sector. Asiri Hospitals Group makes up 15 percent of the private sector healthcare. The sector contributed 1.8 billion rupees to Group PAT. The financial services sector recorded a strong performance through the performance of Softlogic Insurance as gross written premiums grew by 30 percent. The Group’s Information Technology sector recorded a 11 percent top line growth to reach four billion rupees. The automobile sector recorded 147 percent growth in revenue to reach 3.1 billion rupees. Leisure and property sector recorded a revenue growth of 21 percent with Centara and Mövenpick experiencing increased occupancy. Softlogic saw a ten percent growth in assets mainly due to the increased investments in the retail and heath care sectors. Softlogic Group continues to become a more visible entity in Sri Lanka, with its aggressive growth strategies, led by the dynamic and astute Chairman/ Managing Director, Ashok Pathirage.
21. Commercial Credit and Finance
C ommercial Credit and Finance rose six positions to number 21 in the Business Today TOP 30 2018-2019. Having experienced a subdued growth, the Company was able to consolidate its business activities by continuously investing in improving systems and procedures, knowledge and the skill development of its employees.
The Group experienced a 3.7 percent growth in profitability and maintained an ROA of four percent. Net interest margin grew up to 13.4 percent. PAT reduced by 11.6 percent to 2.08 billion rupees. This was due to the high cost to income ratio caused by the newly imposed debt repayment levy. The Group’s subsidiary, Trade Finance and Investments (TFI) recorded a positive growth. TFI’s PAT increased to 623.5 million rupees, which was an improvement of 49.2 percent. Lending portfolio increased by 29.5 percent. TFI’s total assets grew by 38.7 percent to 10.36 billion rupees.
Thereby Group PAT increased to 2.64 billion rupees. Challenging economic environment and regulatory pressure had an adverse effect on the microfinance industry. Therefore, the Commercial Credit and Finance continued to offer credit but took a more prudent approach by moderating the provision of credit. The asset base of the Company reduced to 2.3 percent due to the 5.5 percent decline in loan portfolio. Leasing, hire purchase and gold loan products grew by 15.8 percent, 16.9 percent and 36.2 percent respectively. Deposit base declined by 4.3 percent. The Group entered a strategic partnership with TVS Lanka with an investment of 390 million rupees with an equity stake of 19.5 percent. Synergies between the companies will be utilized for further growth while promoting the motorbike segment in Sri Lanka. Commercial Credit and Finance continue to gain traction within the financial services sector in Sri Lanka.
22. Hayleys
Despite functioning in a challenging operating environment, Hayleys delivered a commendable performance to remain at number 22 in the Business Today TOP 2018-2019. The Company recorded a top-line growth of 34 percent to record the highest turnover of 219 billion rupees. All sectors contributed to the growth positively, despite moderate economic growth in the domestic and international export markets. Growth excluding Singer, which was being consolidated during the year, was at a commendable 19 percent. Gross profit increased by 37 percent to 48.9 billion rupees. Hayleys Global Beverages recorded an operating profit growth of 40 percent to 15.9 billion rupees. Net Finance costs increased by 77 percent to 10.5 billion rupees to leverage investments.
Profit before tax was 5.5 billion rupees, reflecting a marginal decline of five percent despite healthy growth in operating profits and revenue. Profit after tax of 2.7 billion rupees reflected a decline of 16 percent. The transportation and logistics sector continued to exceed expectations with a consistent enhanced earnings capacity. Sri Lanka Shipping Company contributed positively to the Group. Overseas expansions in the Maldives performed well, while established operations in Bangladesh, Indonesia and Malaysia showed strong potential. Revenue increased by 27 percent, as a result of the expansion of operations with operating profit growth at 21 percent to 3.6 billion rupees.
The transportations and logistics sector delivered a PBT of 2.4 billion rupees, accounting for 44 percent of Group PBT and PAT of 1.4 billion rupees, which was 51 percent of Group PAT. Operating profit growth in the agricultural sector experienced 49 percent growth to 1.7 billion rupees. The leisure sector posted a profit of 229 million rupees with performance improvements across all properties. Hayleys continued its sustainability initiatives with a focus towards reducing emissions and water consumption in operations. Despite the challenging environment, Hayleys have taken measures to capitalize on opportunities. With the foresight of Dhammika Perera, Co-Chairman, who holds over 50 percent of the shares, the focus on increasing efficiencies and reviewing the supply chain indicates that Hayleys is in an indomitable position with a positive outlook for the future.
23. Richard Pieris and Company
Richard Pieris and Company ranks at Number 23 in the Business Today TOP 30, 2018-2019. The Company recorded a revenue of 55 billion rupees with a four percent growth and a profit before tax of 3.3 billion rupees. The Group’s retail arm continued to be the major contributor to Group profits and continued to sustain strategic capital investments in upgrading infrastructure to improve overall shopper experience. The largest Super Center outside Colombo was opened in Kegalle, which is the only platinum class green Super Center in Sri Lanka.
The strong growth forecast for the retail sector is mirrored in the performance by the Group’s retail arm, which posted revenues of 27.7 billion rupees, which reflects a growth of five percent over the previous year. The tyre sector continued to contribute more than five percent to the Group revenue and the company remains focused on optimizing manufacture. Financial services recorded a strong growth during the year under review. The Finance Company recorded an asset base of 19.1 billion rupees by the end of the financial year with a 32 growth in the revenue. The Rubber sector of the Group, comprisingnRichard Pieris Exports, Richard Pieris Natural Foams, Arpitalian Compact Soles and Micro Minerals, recorded a revenue of 5.4 billion rupees with a 19 percent increase over the previous financial year.
Present in key economic growth sectors aligned to the national strategy for exports, the Group has noted its commitment to investing in enhancing capacity, quality and geographical reach of all sectors it operates in. The Group is also set to launch a Lithium battery production facility in the following financial year, with the anticipation of a growing market for electric cars and electric scooters. In this backdrop, the prudent measures and investment initiatives taken by Richard Pieris and Company will ensure that the Company maintains its resilient momentum.
24. Chevron Lubricants Lanka
Chevron Lubricants Lanka ranked at number 24 of the Business Today TOP 30, 2018-2019. The Company’s volumes and revenue declined by seven percent and two percent respectively, compared to 2017. Net profit after tax declined by 22 percent during the same period to 1,992 million rupees. With the introduction of the New Inland Revenue Act, the Company lost the advantage of the lower tax rate of 14 percent for export earnings. Under the new Inland Revenue Act, companies predominantly conducting the business of exporting goods and services remained entitled to the lower tax rate of 14 percent; as a supplier primarily to the domestic market, Chevron Lubricants Lanka is now subject to a 28 percent rate on export earnings. The Company’s export revenues, however, exceeded one billion rupees.
The Company’s net earnings after tax fell by 22 percent to 1,992 million rupees, resulting in earnings per share of 8.30 rupees, compared to the 10.69 rupees recorded in the previous year. The decline in net earnings was mainly due to margin erosion as a result of increased input costs and weaker demand. The Company declared and paid dividends of 8.75 rupees per share. Export volumes declined by ten percent in comparison to the performance in the previous year. In Bangladesh, internal logistical issues faced by the distributor and intense competition, particularly in the industrial segment, contributed to a lackluster performance.
Due to the high standards and performance in safeguarding the health as well as safety of employees whilst setting high benchmarks for the rest of the industry, Chevron Lubricants Lanka continued a journey of incident-free operations for the 17th consecutive year. The vision for the Company remained with the aim to sustain its position as the preeminent marketer of lubricants in Sri Lanka. The Company remains confident that products, people and business strategies are positioned for long-term sustained success in the market. The revised go-to market strategy for 2019 to address challenges in the marketplace indicates that Chevron Lubricants Lanka is well-positioned to face the challenges and move forward.
25. Teejay Lanka
A high quality performance propelled Teejay Lanka three positions to number 25 in the Business Today TOP 30 2018-2019. The Group achieved a 16 percent growth in net profits to reach 1.86 billion rupees and a Group revenue of 31.7 billion rupees despite an increase in the costs of cotton, which accounts for 65 percent of raw material costs. The Group recorded one of its best years in operations, achieving the highest in meeting quality and ontime delivery standards. An increase in volumes to USA and the EU led to the Group’s growth in profitability and revenue while strategic customers contributed to the 29 percent growth in revenue. Volumes across the Group grew by 13 percent. The Group also added to its portfolio two of the world’s leading apparel brands, Nike and Uniqlo. Thus it has expanded the number of strategic customers in the Group portfolio to eight, from six in the previous year and three in 2004.
Teejay’s proactive sustainability efforts reached a new paradigm venturing into the manufacture of fabric made of discarded items, thus integrating the practices of reusing and recycling into its products. The Company also continued to invest expanding the potential of the individual and the Group. Teejay also continued to engage in CSR activities to uplift communities in the localities of its three plants and worked towards fine-tuning its CSR footprint. The apparel and textiles subsectors together contributed around 78 percent of the overall growth in the country’s manufacturing sector in 2018, while the manufacture of textiles recorded a considerably higher 3.6 percent growth in 2018. It is truly encouraging to see Teejay Lanka, the only apparel manufacturer in the Business Today TOP 30, continue to rank among the top corporates in Sri Lanka.
With the strength of Brandix, as well as the dynamism of Ashroff Omar, Group Chief Executive Officer, Brandix Lanka and Director Teejay, together with Teejay’s dedication to enhance operational and manufacturing efficiencies and continue the modernization and expansion of production capacities will continue to support the Company’s growth trajectory.
26. Access Engineering
Access Engineering ranks at number 26 in the Business Today TOP 30, 2018-2019. Amidst a volatile operating environment, the company outperformed expectations to record the highest Company and Group turnover since incorporation at 19.4 billion rupees and 32.3 billion rupees respectively. Yearly growth rates were recorded at eight percent and 24 percent. PAT was 2.2 billion rupees and two billion rupees at the Group and at the Company levels. The Group’s core construction business recorded a 19.44 percent year on year growth in the backdrop of constructionrelated activities that continued during the year. The growth of construction material segment was an impressive 16.9 percent.
Access Engineering also took tangible steps to expand core business lines and further develop diversified business areas. Thus, the biggest contribution to growth was from the automobile and the property divisions. The automobile sector recorded a growth of 32.2 percent and showed encouraging signs of recovery. Associate ZPMC Lanka Company recorded a 145 percent growth. Although the medium-term strategy of the Company focuses on improving core business lines, in long term plans diversification and synergy between different businesses are key components. Being a forerunner in using innovative technology in the field, Access Engineering is dedicated to furthering investments in this area. The Company has introduced new and unconventional construction methods to the Sri Lankan industry, which have resulted in time and cost saving. The alternative beam casting method adopted for the Central Expressway Project, for example, has enabled Access Engineering to remain ahead of schedule, while maintaining a reduction in construction cost. The Company also continued to use technologies such as HDD, diaphragm walls, micro trenching, post tensioning in projects.
Access Engineering has also maintained an above industry average retention rate despite a dearth of skilled labour and high turnover rate in the industry. While remaining optimistic about the immediate future, the Group derives confidence from its strong foundations, clear strategic direction and value of resilience embedded in its organisational culture inculcated by Sumal Perera, Chairman. The Group has always been the first to venture into development projects; as such other corporates can take them as an example.
27. Dilmah Ceylon Tea Company
Dilmah Ceylon Tea Company entered the Business Today rankings for the first time at number 27. Merrill J Fernando, Founder/Chairman is a visionary that has taken Ceylon Tea to the next level, creating a name internationally. There’s much that Corporate Sri Lanka can learn from Dilmah where they have introduced many novel concepts to Ceylon Tea. Dilmah has created a global name independently. Revenue grew by 16 percent and Gross profit increased by 30 percent over the previous year. The Company’s benefits in exchange showed a remarkable gain of 106 percent while net profit before tax increased by 32 percent. Net profit after tax is 15 percent of the revenue, an increase of 33 percent over the previous year. The tea crop improved during the year compared to the previous year, which resulted in tea prices stabilizing and reaching sustainable levels when compared with the previous year.
The Company’s sales volumes grew 11 percent, while corresponding revenue grew by 16 percent, largely underpinned by favorable currency movements. Strong topline growth and margin expansion drove profit before tax by 32 percent to 1.6 billion rupees and the EPS by 31 percent to 76.71 rupees per share. Foreign exchange gains doubled during the year to 762 million rupees, while Dilmah engaged in currency risk mitigation mechanisms to minimize loss from the sharp depreciation of the Rupee against the USD on imports.
In fulfilling its commitment to family values, Dilmah is demonstrating the role of business in a changing world. Earnings from the MJF Group – primarily from Dilmah tea – provide funds to the MJF Charitable Foundation for its work in fulfilling the philosophy of making business a manner of human service. Dilmah Conservation initiated its Climate Reality program in collaboration with UNGC Sri Lanka to create understanding about the challenges of climate change and its profound implications. Dilmah is well placed to benefit from its emphasis on quality, single origin tea, packed garden fresh at source. The company’s continued commitment to innovation with a continuous new product development program that emphasizes innovation with tea, herb and spice ingredients will prove crucial to its success in the future. Moreover, this will be supported by Dilmah’s strong commitment to sustainability in product packaging and across business operations generally.
28.Citizens Development Business Finance
S ignificant growth in the bottom line propelled Citizens Development Business Finance (CDB) to reach the Business Today TOP 30 corporate rankings for the first time. Ranked at number 28, CDB recorded a 22 percent growth in the bottom line. Total assets recorded a growth of 20 percent at 91 billion rupees while profit before taxes was at 2.7 billion rupees, showcasing a growth of 34 percent. CDB’s profit after tax recorded at 1.8 billion rupees with a growth of 24 percent. In the backdrop of a challenging operating environment, CDB became one of the leading financial institutions in Sri Lanka, increasing its asset base by 18 percent to reach 89 billion rupees. The bottom-line performance is achieved despite an increase of 58 percent in taxes and a three-fold increase in impairment charges, aligned with regulatory requirements and accounting standards. Gross non-performing loans are detailed at 6.68 percent and net basis indicated at 3.84 percent. The net NPL ratio excluding revolving repossessed stock was reflected at 1.5 percent.
CDB has empowered the aspirations of customers by providing innovative product offerings to all segments of the Sri Lankan society through physical touch points and digital platforms. This continued commitment to innovation and customer satisfaction will bode well for the Company’s future outlook. CDB’s extraordinary commitment towards sustainability has reaped rewards as the Company continues to raise the bar in social and environmental consciousness. CDB was recognized as the first ISO 14064-1 verified financial institution in South Asia by Sri Lanka Carbon Fund in 2015/16 and since has continued to be a carbon-verified organization proactively working to reduce its carbon footprint. In a move that is expected to rationalize some operating costs, in 2019/20, following CBSL directives, CDB will undertake the merger of 90.38 percentowned specialized leasing subsidiary, Unisons Capital Leasing (UCL), and the fully-owned subsidiary Fortune Properties with CDB. The clear strategic direction and value of resilience augurs a positive outlook for CDB in the year to come.
29. Expolanka Holdings
A consistent approach to growth ensured Expolanka Holdings retained its number 29 position in the Business Today TOP 30 2018-2019. The Group enhanced its global network of operations during the year, strengthening its presence in key growth markets such as China, Vietnam, Indonesia and many others in the Far East, and is committed to continue to do so in the future. Performance was driven by a 23 percent growth in Group revenue yearon-year, which pushed the topline over 95 billion rupees in the financial year. Within an extremely competitive industry, the growth reflected a continuing strategy adopted at Expolanka, which focused on growing market share and the topline. Reflecting back to 2018- 19, Expolanka recorded a growth of 50 billion rupees with a compounded annual growth rate of 11 percent. The growth in revenue was supported by the logistics sector’s compounded annual growth rate of 19 percent.
Profits from the leisure sector grew by 24 percent, accounting for 11 percent of total Group profit after tax. The flagship brand EFL is physically present in almost all key international trade routes, in varying levels of strength. The strategy of expansion has started to provide increasing performance that has boosted the Group’s after tax profits by 99 per cent year-on-year to 1.91 billion rupees. This growth has also been supported by sustained growth on the Group’s home turf, the Indian subcontinent, as well as China and the other East Asian block. Expolanka is committed to allocating resources for geographic expansion and provision, including the acquisition of physical assets, human capital and technology systems whilst providing a full range of supply chain management services to customers. Technology and digitalization of the Cargowise ERP system deployed across all EFL global operations will also be a point of focus for investment, considering its benefits of improved market/ customer intelligence and operational visibility. Expolanka’s commitment to staying relevant and ahead in an innovative and competitive logistics space ensures a promising outlook for the Group.
30. Pan Asia Banking Corporation
Diversified business model, nationwide franchise, and investment in innovation propelled Pan Asia Banking Corporation (PABC) to record a resilient performance and enter the Business Today TOP corporates ranking for the first time at number 30. Overall, the Bank’s recorded growth in its assets of 11.21 percent, which resulted in a bottom line growth of 10.87 percent to 1.54 billion rupees. PABC made progress in a number of areas both financially and operationally. Total operating income grew by 33.66 percent supported by a 12.42 percent growth in the loan book while containing the impact from rising delinquencies across the industry.
Despite industry ratios rising substantially, PABC recorded a net NPL ratio of 3.08 percent for 2018, barely unchanged from the previous year due to prudential provisioning. PABC generated 21.67 billion rupees in revenue in 2018 registering a growth of 22.55 percent from the previous year and a profit after tax of 1.54 billion rupees. By the year end, the total deposits stood at 118.63 billion rupees, up 10.67 percent from 2017. The Bank ended 2018 with total CET 1 capital of 11.34 billion rupees and Tier 1 capital ratio of 11.51 percent, while the regulatory minimum was 7.87 percent.
Continuing its commitment to innovation, PABC engaged in significant R&D, which resulted in two truly innovative product offerings. ‘Rising FD’ provided a fitting product for Sri Lankans to save in a fixed deposit while benefiting from rising interest rates in the market. With greater oversight of risk, the Bank created more consistency and a better enterprise view of managing risk. While staying on top of Basel III minimum capital and other regulatory requirements, PABC is positive that it will be able to continue to serve customers with a sharp focus on the changes in the industry and market. While continuing to raise its capital base, PABC is dedicated towards upskilling staff and enabling greater technological development. Investments of this nature will prove to be judicious for future performance.
