Sri Lanka’s Dunamis Capital December quarter net up 13.8-pct

EconomyNext – Sri Lanka’s Dunamis Capital said December 2014 quarter net profit rose 13.8 percent to 84 million rupees from a year ago.

Earnings per share for the quarter were 69 cents, according to interim results filed with the stock exchange. 

Revenue for the quarter ended 31 December 2014 shot up 175 percent to 659 million rupees from a year ago

For the nine months ended 31st December 2014 Dunamis Capital reported earnings per share of 5.87 rupees with net profits at 722 million rupees, up from 48 million rupees the year before.

Dunamis Capital group’s Executive Chairperson Manjula Mathews attributed profit growth mainly to the contribution of its financial services unit, First Capital Holdings PLC.

The group comprises of First Capital Holdings, Kelsey Developments and Premier Synthetic Leather Manufacturers (Pvt) Ltd.

Mathews said after-tax profits of First Capital Holdings were 1.09 billion rupees compared with 263 million the previous year.

“The unit’s primary dealer arm remained the key contributor to profits. The continued decline in secondary market interest rates coupled with favourable macro-economic factors created trading opportunities which yielded exceptional returns,” she said.

The group’s property development arm, Kelsey Developments, reported consolidated after tax losses of 29 million rupees for the period compared with profits of 162 million the previous year, in which a one-off capital gain of 177 million rupees had been realised.

“The company was unable to recognise any of the revenues attributable to its most recent housing development, ‘Templer’s Square’ but had to recognise a substantial part of the overheads due to the revenue recognition policy adopted, which resulted in losses,” Mathews said.

Templer’s Square is expected to yield a profit of about 250 million rupees over the next two years, she noted.

“Kelsey has also entered into an agreement to purchase land in Negombo for a consideration of 487 million rupees, on which the company expects to launch a housing development within the first half of the next financial year,” she added.
 
"As the persistent low interest rate regime in the country drives demand for housing, Kelsey’s contribution to the group’s outlook for revenues and profits in the near term is positive," Managing Director Dinesh Schaffter said.

At company level profits of 268 million rupees were reported for the nine months compared to 40 million rupees the previous year.

"The company’s equity portfolio contributed a significant 115 million rupees to its profits, and a share buy-back of a subsidiary resulted in a one-off gain of 153 million rupees," he said.

"However, opportunities at First Capital for exceptional gains are limited and the main focus will be on fee-based activities."