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NLF sees remarkable turnaround
The quarterly financial report of Nation Lanka Finance Plc (NLF) for the period ended March 31, 2011 reveals dramatic turnaround of the group. The group which faced a 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 suffered in the corresponding period of last year.
For the 12 month period ending March 31, 2011 losses have been-reduced to Rs.216 million compared to previous year with a massive loss of Rs.1,071 million. Accordingly, the negative earnings per share have been reduced from Rs.42.52 to Rs.5.21.
The company which was under the management of the Central Bank earlier has been recently reverted to the private sector management and a sum of Rs.500 million has been injected to the company by way of a private placement. In addition, a sum of Rs. 300 million has been raised by way of a right issue and this positive factor would be reflected in the next financial statement. For instant, it would result in the net assets value per share, increase from Rs.0.05 to Rs.1.55.
The management has been very prudent in its investment strategy and accordingly substantial portion of Rs.800 million mobilised has been invested at present only in government securities with low return. 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 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:
1. It is expected the licence 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 a satisfactory margin.
2. Diversion of investment 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%.
3. The company expects approval to function as a finance company from the Central Bank shortly which would facilitate mobilisation of deposits increasing the capacity to lend and higher profitability.
4. 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.
5. Ceylinco Stock Broking Company with a full member licence which is money spinner would transfer broker credit to National Lanka Capital Ltd., once approval is granted and this would facilitate enhancement of credit presently restricted and increased profitability.
6. The Millennium Housing Developer Ltd has now turned profitable and it is expected to generate substantial profits of around Rs.90 million in the current financial year.
It is also expected the company would record a substantial net profit even exceeding Rs.100 million during the current financial year with further steady progress in the coming years.
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 the next few months.
The quarterly financial report of Nation Lanka Finance Plc (NLF) for the period ended March 31, 2011 reveals dramatic turnaround of the group. The group which faced a 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 suffered in the corresponding period of last year.
For the 12 month period ending March 31, 2011 losses have been-reduced to Rs.216 million compared to previous year with a massive loss of Rs.1,071 million. Accordingly, the negative earnings per share have been reduced from Rs.42.52 to Rs.5.21.
The company which was under the management of the Central Bank earlier has been recently reverted to the private sector management and a sum of Rs.500 million has been injected to the company by way of a private placement. In addition, a sum of Rs. 300 million has been raised by way of a right issue and this positive factor would be reflected in the next financial statement. For instant, it would result in the net assets value per share, increase from Rs.0.05 to Rs.1.55.
The management has been very prudent in its investment strategy and accordingly substantial portion of Rs.800 million mobilised has been invested at present only in government securities with low return. 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 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:
1. It is expected the licence 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 a satisfactory margin.
2. Diversion of investment 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%.
3. The company expects approval to function as a finance company from the Central Bank shortly which would facilitate mobilisation of deposits increasing the capacity to lend and higher profitability.
4. 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.
5. Ceylinco Stock Broking Company with a full member licence which is money spinner would transfer broker credit to National Lanka Capital Ltd., once approval is granted and this would facilitate enhancement of credit presently restricted and increased profitability.
6. The Millennium Housing Developer Ltd has now turned profitable and it is expected to generate substantial profits of around Rs.90 million in the current financial year.
It is also expected the company would record a substantial net profit even exceeding Rs.100 million during the current financial year with further steady progress in the coming years.
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 the next few months.
