Encouraged by the buoyancy of the economy, the relatively new Free Lanka Capital Holdings Ltd has reported exceptional results in the year ended March 2011.
Recording a gross revenue of Rs. 6.5 billion for the Group during the financial year 2010/11 as compared with Rs 4.9 billion the previous year - a 33% increase, the Group’s provisional financial results show a profit increase of over 300%. Profit before tax amounted to Rs 1,374 million in 2010/11 as against Rs 341 million the previous year, which is an increase of 303%. Profit after tax recorded, a 319% increase year-on-year with the figure for 2010/11 at
Rs 1,270 million compared to Rs 303 million in the earlier financial year.
The performance is considered as most satisfactory by financial analysts who attribute the success to increase rubber and tea prices as well as sound management of the numerous activities coming under the purview of several subsidiary companies.
The group’s earnings are mainly from the plantation sector that is Maturata and Pussellawa Plantations. These two plantations comprise approximately 19,000 acres of tea and 13,000 acres of rubber. Maturata comprises of 19 tea estates while Pussellawa comprises of 11 tea estates and 9 rubber estates and 4 estates with a mix of tea and rubber. The tea produced in these estates have won many awards last year.
Pussellawa also produces green tea in two factories. The company also has invested in commercial timber with over a million trees being planted on their properties. To take advantage of high rubber prices the group has completed an aggressive replanting exercise which commenced in 2005 wherein a sum of Rs. 1 bn has been invested in new planning and replanting of rubber. Steps have also been taken to upgrade current rotavane manufacturing methods in some of the tea factories. Utilizing existing spare capacity at it’s factories, the company aims to increase further bought leaf intake in low grown factories.
Leveraging assets and opportunities available on the estates Free Lanka Capital Holdings has embarked on number of mini hydro power projects. Presently it’s subsidiary Hydro Power Free Lanka generates approximately 3.2 MW of electricity in it’s mini hydro power plants in Sanquhar and Delta. The company has signed standard power purchase agreement with the Ceylon Electricity Board for 2 projects,Thebuwana at Kuruwita and Stellenberg at Gampola and the construction has already commenced. Power generation is scheduled to commence in November this year. Construction of two more projects at Ragala will commence soon and work is due to be completed by April2012.
The Group is also into real estate and commercial development through Free Lanka Properties (Pvt) Ltd. The first project undertaken in this sector is the development of a commercial complex in Borella with 80,000 sq. ft of rentable space. The property for this complex has already been acquired by the Company.
Leisure is another sector that the Group is developingthrough two subsidiary companies. One is Tea Leaf Resort Holding (Pvt) Ltd., which will develop star class boutique style hotels in Kandy and Padukka areas which offer accommodation to a total of 92 rooms.
The main shareholders of Fee Lanka Capital Holdings are Free Lanka Capital (Pvt) Ltd. (70%), Browns Investments (Pvt) Ltd. (4.12%) and Perpetual Holdings Ltd. (4.27%).Browns Investments Ltd and Perpetual Holdings Ltd own the total share capital of Free Lanka Capital (Pvt) Ltd.
source - www.dailymirror.lk
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