BRS Morning Shout

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BRS MORNING SHOUT

10th August 2016

COMPANY UPDATE
1. SUN (LKR 51.00) Q1 FY 17 EPS LKR 1.53 (+28% YoY)
Sunshine Holdings PLC SUN

SUNs bottom line improved 30% YoY to LKR 408mn (Q1 FY 16 LKR 314mn)

The bottom line growth was primarily supported by margin expansion in Agri segment.

EBIT margin in Q1 FY 17 was 11% (Q1 FY 16 was 10%)

EBIT reported during the quarter was LKR 519mn (Q1 FY 16 LKR 399mn)

GP margin in Q1 FY 17 improved to 26% from 23% previously.

Cost of sales increased 6% YoY to LKR 3.41bn.

Group top line improved 11% YoY to LKR 4.62bn, on the back of revenue growth in Healthcare and FMCG segments.

Revenue from Healthcare improved 18% YoY to LKR 1.95. But profit declined 6% due to higher cost of sales.

Profits from FMCG declined by 49% YoY although revenue showed an improvement of 14% YoY. The drop in
profits is attributable to higher cost of sales, which came as s results of higher NSAs.

Revenue from energy segment too declined 24% YoY, primarily due to lower rainfall during the quarter.

Agri segment on the other hand was the key contributor to group bottom line during the quarter. Profit from
the segment surged 83% YoY to LKR 238mn on the back of loss reduction in tea business and margin expansion
in palm oil.

PER11x (TTM EPS LKR 4.68)

PBV1.1x (NAV LKR 44)

Sector PER - 16x, PBV1.1x.

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65, Braybrooke Place, Colombo 2, Sri Lanka
research@bartleetreligare.com, +94 11 5220200

2. DIST (LKR 265.00) Q1 FY 17 EPS LKR 6.41 (+9.55% YoY)

Distilleries Company of Sri Lanka PLC DIST

DISTs bottom line improved 7.6% YoY to LKR 1.8bn (NP margin 7%) in Q1 FY 17.

Beverage segment contributed 103% to the group bottom line from 93% in the previous year, while diversified
sectors contribution dropped to 5% (Q1 FY 16 15%).

Net revenue grew 23.3% YoY to LKR 9.34bn in Q1 FY 17, majorly aided by beverage segments 91% contribution. The segments top line grew 38% YoY for the quarter.

Increase in finance costs and decline in finance income resulted in the bottom line to grow relatively lower.

PER 12.2x (TTM EPS LKR 21.72)

PBV 1.2x (NAV per share LKR 217.49)

Sector PER 16.4x

Sector PBV 1.2x

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BRS Morning Shout

65, Braybrooke Place, Colombo 2, Sri Lanka
research@bartleetreligare.com, +94 11 5220200

ECONOMY

Mirroring lackluster interna-

Asian shares hit a one-year

exited from the fully-owned sub-

high on Wednesday while the

Lankas trade deficit grew

sidiary Ever Paint and Chemical

dollar and Treasury yields slid

15.7% to $ 814 million from $

Industries Ltd., at a loss of Rs.

on weak U.S. productivity

703 million in May 2015 as

226 million. (4)

data and sterling recovered

from a one-month low. (7)

Sri Lanka's Continental Insur-

Receipts from workers remit-

ance, has sought a public listing,

tances increased by 11.1% to

Distilleries Corporation of Sri

day as a global supply over-

$597.2 million in May 2016 in

Lanka, its holding company Dis-

hang weighed on markets,

comparison to the decline of

tilleries Corporation of Sri Lanka

while talk of a potential pro-

1.4%recorded in the previous

said. (5)

ducer meeting to discuss

month. (2)

Royal Ceramics Lanka Plc has

INTERNATIONAL

tional commodity prices, Sri

exports dropped by 12%. (1)

BUSINESS

Oil prices dipped on Wednes-

propping up prices lent some

Sri Lankas LOLC is to issue and

support . (8)

Secondary market bond yields

list 150 million US dollars worth

continue to remain steady with

foreign currency denominated

the liquid maturities of

notes and bonds on the Singa-

for the third straight quarter

01.09.23 and 01.06.26 trading

pore Stock Exchange. (6)

in the spring this year, sug-

U.S. worker productivity fell

at levels of 12.15% and 12.45%

gesting that corporate profits

to 12.50% respectively. (3)

may continue to decline. (9)

See page no 05 for website references

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BRS Morning Shout

POLITICAL UPDATE
The Supreme Court has ordered Parliament to stop considering a bill to raise Value-Added Tax (VAT) because the
drafting of the proposed legislation had not followed due process, the assembly Speaker said on Tuesday. - http://
www.ft.lk/article/560582/Supreme-Court-blocks-bill-raising-rate-of-VAT#sthash.uM4KNEc6.dpuf
The Committee on Public Enterprises (COPE) interim report for the first three months of 2016 was yesterday presented to Parliament by COPE Chairman Sunil Handunnetti, outlining details of investigations on 19 public enterprises. - http://www.ft.lk/article/560550/COPE-report-on-19-public-enterprises-presented-to-Pliment#sthash.haQ7slaz.dpuf
Muslim civil society in Sri Lanka's Eastern Province has stressed that North and East should not be merged when
devolving power to the provinces under a new constitution. - http://www.colombopage.com/archive_16B/
Aug09_1470723441CH.php

FOREX MARKET (as at 09.08.2016)

Buying
(Rs)

Selling
(Rs)

Source: www.cbsl.gov.lk

COMMODITY MARKET (as at 09.08.2016)

Source: http://www.nasdaq.com/markets/commodities

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BRS Morning Shout

E-paper References
1 http://www.ft.lk/article/560587/Export-woes-continue
2 http://www.ft.lk/article/560587/Export-woes-continue
3 http://www.ft.lk/article/560544/Secondary-market-Treasury-bond-yields-remain-at-pre-rate-hike-levels
4 http://www.ft.lk/article/560572/Royal-Ceramics-exits-paint-subsidiary-at-Rs--226-m-loss
5 http://www.economynext.com/Sri_Lanka_s_Continental_Insurance_seeks_public_listing-3-582117.html
6 http://www.lankabusinessonline.com/lolc-to-issue-usd150mn-listed-foreign-currency-bonds-insingapore/
7 http://www.reuters.com/article/us-global-markets-idUSKCN10L04O
8 http://www.reuters.com/article/us-global-oil-idUSKCN10L039
9 http://www.reuters.com/article/us-usa-economy-idUSKCN10K19F

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