Friday, July 1, 2022

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SL Dollar earning-rich companies confident  of economic recovery 

Several Sri lankan companies earning US dollars from foreign operations /subsidiaries expressed confidence of economic recovery in the island nation with collective efforts of public and private sectors.

 The business leaders were also questioned about the current and upcoming operating environment especially with higher interest rates and planned increase in taxation. However, all of them stressed on the importance of ensuring business continuity and impact of higher taxation as secondary.

Expolanka’s Mushtaq Ahamed said the current financial performance of Expolanka Holdings PLC (Expo) reflects the efforts and investments into a strategy initiated 10 years ago. 

t involved great customer acquisition and procurement strategies. It was emphasised that 95% of the revenue comes from foreign operations/subsidiaries of EXPO established outside Sri Lanka. 

Of the Hayleys turnover 50% or $ 600 million comes from exports and Executive Director Sarath Ganegoda highlighted the Group’s diversification strategy and how the company has aligned its portfolio of investments and the Hayleys short, medium and long term directions. 

He also pointed out that on-going economic and political crises indeed have posed challenges to this strategy hence Hayleys is taking a relook at the entire diversification strategy and adjusting the way forward accordingly. In terms of restrictions on lifestyle white goods and electronics imports, 

LOLC’s Group MD Kapila Jayawardena acknowledged that it is turbulent times both locally and globally. Whilst noting the research presented was good overall, some of the forecasts made may look different going forward especially with the steep devaluation of the currency and hike in interest rates. 

He said that as per LOLC Balance Sheet, local and foreign assets are equal at 50% each whilst 40% of profits come from overseas. 

“If you do a trend analysis, during the past 10 years the Group has been consistently investing overseas,” he said, adding that in 2020, the sale of stake in PRESAC, Cambodia valued at $ 1 billion, and repatriation of sales proceeds saw Rupee appreciate. 

He said that LOLC Group is investing considerably in the Maldives, which offers the highest Return of Investment in the leisure sector within the Asia Pacific region. 

JKH’s Deputy Chairman Gihan Cooray revealed of a couple of re-rating investments of the Group. 

One was Cinnamon Life, which is nearing completion and will soon begin to generate cash. In the medium to long-term of the transportation sector is the investment in the Colombo West Terminal project which will enhance JKH’s exposure to a high growth strategic sector..

Teejay Lanka CEO Pubudu De Silva said the global apparel market is heading towards $ 2 trillion mark whilst the local industry has grown to increase its share despite the challenges. Pre-COVID apparel exports were $ 5.6 billion, and they dropped to $ 4 billion due to the pandemic and recovered to $ 5 billion mark thanks to the sheer resilience. 

Speaking about Teejay, he said that the Company invested $ 26 million to expand capacity in India and expressed confidence of becoming a $ 300 million company in FY22.  The focus is on further capacity fulfilment. 

Hela Apparel’s Group CEO and Director Dilanka Jinadasa said that Hela having expanded from a Rs. 500 million business 10 years ago to a Rs. 200 billion turnover in FY22 needs a lot of working capital given the rapid growth and the challenge was whether the banking sector can support with the required dollar liquidity.

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