Technology providers to list on CSE and Nasdaq

Technology Providers, one of Sri Lanka's youngest IT companies, intends to go public with a listing on the Colombo Stock Exchange (CSE) and Nasdaq Exchange by year end, a senior company official said.

We hope to be the first Sri Lankan IT company listed on the Nasdaq, Joint Deputy Chairman Technology Providers, Kris Canekeratne said.

Founded in 1995, Technology Providers (TP) is a leading provider of outsourced software design and development services primarily for the US market with offices in Colombo and Boston USA.

The local operation is a 100 per cent offshore software development company with a customer base that includes Lotus Corp., Moore Corp., Symantec, INSCI Crop., and Unisys Corp.

TP also provides IT delivery services to emerging high tech USA companies like e-docs Inc and e-Share Inc.

TP targets large software companies, systems integrators and other large commercial organisations.

"TP also backs emerging high tech companies by using their Human Resource Venture Capital (HRVC) programme.

"TP mitigate all technology development risks for the entrepreneur at a fraction of the normal R&D costs in return for equity for the investments made by TP", he said.

"We provide complete business solutions and consider ourselves as technology providers and partners," he said.TP recently signed a US$ 2.7 mn contract with Unisys Corp.

The underlying goal of TP is to provide talented Sri Lankan engineers access to emerging technology and unparalleled opportunities to design and build cutting-edge software products for the most innovative and competitive US software market.

The staff has doubled to 150 since its inception.

"The demand for IT services far exceeds its capacity. If we have another 100 engineers on staff, we have another few customers", he said.

While being hesitant to disclose annual revenues, Canekeratne said revenues have doubled every year with nearly a third of the revenues pouring in from their local operations.

"Our business is not capital intensive but we are looking at ways to raise capital for expansion", he said. "There is no hurry for it yet."

"However, we want to provide all employees with financial rewards and we are going through the paces for an employees share option scheme," he added.

Sampath Bank's nine month record flies high

Strong growth in lending portfolio, stabilising margins and lower tax rates have enabled Sampath Bank, the favourite betting horse of most brokerages to post good earnings for the nine months to September 1998. The Bank has reported profits of Rs. 291 mn up 27 per cent from the last financial year.

"We expect the Bank to maintain this momentum during the year to record a profit of Rs. 384 mn for FY 1998 and to record an average profit growth at around 17 per cent over the next two years", CT Smith Stockbrokers said.

Savings deposits account for 51 per cent and current accounts for 12 per cent of total deposits. The balance 37 per cent represents call and fixed deposits. The deposit mix gives Sampath arguably one of the lowest cost and flexible fund bases among the commercial banks, the CT Smith report said.

Non-performing loans account for less than 4 per cent of total loans. Sampath has made specific provision, of around 2.12 per cent of total loans. Loan portfolio is well diversified, with exposure to the troubled tea sector accounting for only 4 per cent of total loans and advances.

The Bank has capital adequacy ratios of 11.3 per cent and 12.4 per cent. These ratios are well above the required Basle International Standard of 4 per cent and 8 per cent. Together with the Rs. 500 mn debenture issue, it is estimated that tier 2, capital adequacy ratio will be around 14.5 per cent by year-end.

Sampath recently initiated a 2-year plan to upgrade existing IT equipment. This programme will be completed by September at a cost of Rs. 300 mn. The IT upgrade will make Sampath Y2K compliant with new capabilities and flexibility giving it a competitive edge in the sector.

Sampath has a ROE and ROA of 25 per cent and 1.94 per cent respectively. With projected growth in earnings of 19.1 per cent and retention of 86 per cent, the rates may decline to around 24 per cent and 1.92 per cent over the next two years.

However, returns remain strong and are the highest in the sector.

The smallest of the four listed commercial banks, with only 32 branches, the Bank has pioneered the use of IT extensively in the commercial banking industry by introducing ATM and integrating branches by an on-line, real time processing network providing UNIBANK services.

The IT edge has enabled it to offer a variety of services and products; the ATM card, the first debit card, the credit card, home banking and telephone banking.

The stock has a free float of 69 per cent and is among the most liquid shares on the market. The share has dropped nearly 45 per cent from its 18 month high of Rs. 90 on the back of the foreign sellout in the market.

Shipping

• North-East passenger ferry service
• Shipping men meet to discuss tariffs

North-East passenger ferry service

Asset Maritime (Pvt) Limited has come forward to assist the Sri Lankan Government with a passenger service between Trincomalee and Jaffna.

Responding to the plea of the Governor, Northern and Eastern Provinces, for a reliable passenger service for civilians, Asset Maritime (Pvt) Ltd. has made arrangements to supply an up-to-date, fully equipped passenger ferry, with 350 seating capacity, TV, and fully air-conditioned for the comfort of the passengers.

As part of the service, a sandwich and a soft drink will also be served to each passenger. In the past, civilians travelling to Jaffna have had to undergo immense hardship and been subjected to a two-day journey by sea on an overcrowded cargo ship which operated not even once a month.

They can now look forward to a service that operates practically every day of the week and arrive at their destination, be it Jaffna or Trincomalee, in approximately four hours.

This service is due to commence early in March under the aegis of the President, Governor of the Northern and Eastern Provinces and the Commissioner General of the Essential Services Division of the Presidential Secretariat.

Furthermore, the ICRC has come to an agreement with the governor and the commissioner to provide protection at all times by having two of their representatives on board.

The most important condition of this service is that no military personnel, equipment or cargo will be transported on this vessel.

Shipping men meet to discuss tariffs

By Gunapala Ranasinghe

"We have no intention of opposing or interfering in the policy decisions of any country", said the Commercial Attache of the US Embassy at the discussions with Shipping Agents convened by the Finance Ministry.

Representatives of the Ceylon Association of Ships Agents, the Association of Container Terminal Depot Operators, The Sri Lanka Association of Vessel Operators were present at this meeting, which discussed disputes pertaining to the Maritime Industry, in particular on Port Tariff. Deputy Secretary Finance Ministry, P.B. Jayasundera presided.

Mr. Jayasundera said that it was not a meeting to arrive at decisions of any kind, but would enable representatives to get a knowledge of the work, in the Maritime Industry. Director of Merchant Shipping, P.A. Ratnayake and officers of the Exchange Control were present too.

The meeting also discussed the forming of a Maritime Authority to regulate the industry as was disclosed by Mr. Jayasundera for which he said arrangements are under way. President Kumara-tunga would be informed as she is in charge of the Shipping Division. But the industry would be consulted on all matters, said the Deputy Secretary to the representatives present.

The representatives pointed out that a minimum tariff would help to create a level playing field.

Business briefs...

UAL's profits surge to Rs.102.9 in 1998

Union Assurance (UAL) celebrated its tenth year of opertions with very good performance in all areas of its operations resulting in an increase in its profits after tax from Rs. 76.1 m in 1997 to Rs. 102.9m. in 1998, a growth of 35%.

The profit after tax and transfer to tax equalisation resere was Rs. 95.7m. in 1998 compared to Rs. 70.3m. in 1997. The earnings per share increased from Rs. 5.27 in 1997 to Rs. 7.18 in 1998.

In 1998 UAL did well in both life and general insurance business. The total permium increased from Rs. 1,182.5m. in 1997, to Rs. 1,308.1m. in 1998. General insurance profit increased from Rs. 66.6m. in 1997 to Rs. 88.9m. in 1998, a growth of 33%. Life surplus accruing to shareholders also increased from Rs. 15.0m. in 1997 to Rs.19.5m. in 1998. The Life Fund which was Rs. 498.7 m as at end 1998, reflected an increase of 42% when compared to 1997.

UK trade delegation for Sri Lanka

A trade delegation from ''The Potteries'', the area where Britain's ceramic industry is based, will be visiting Colombo from 8 to 12 March to develop partnerships with Sri Lankan industry. The delegation will comprise 30 companies, the majority of which will be suppliers to the ceramics industry. The delegation will be led by Richard Ward, Chief Executive of Staffordshire Training & Enterprise Council (TEC).

Ceylinco Life achieves record growth

Ceylinco Insurance's Life Division sold a record 50,124 new policies in 1998, which is a growth of 20 per cent. The new business premium income generated a spectacular 44 per cent growth, says a company release.

This was a healthy growth in the context of the general economic climate in the country, Ceylinco Insurance Director/General Manager R. Renganathan said.

The company ended its financial year on December 31, 1998 with Rs. 1.034 billion in total premium income, which was an increase of 10 per cent compared to 1997. It said sales of Group Insurance had been particularly successful in 1998, with a growth of 55 per cent over the previous year.

The company was the first private sector life insurer to record more than a billion rupees in premium income in a financial year, a milestone it achieved in mid December '98. The company paid out Rs. 41.9 million in settlement of claims during the year.

ICSA Seminar on Debentures at Hotel Lanka Oberoi

Debentures have recently become a notable feature in the development of the Investment Portfolio of Finance Institutions in Sri Lanka. The signs are that another leading bank may be preparing its own debenture issue in the near future.

The Institute of Chartered Secretaries and Administrators will organise a halfday seminar at the Hotel Oberoi on 11 March at 2.30 pm and bring together some of the leading analysts to discuss the relevant issues of interest to the institutionalised and private investors given the current economic climate in Sri Lanka

The seminar "Why Debentures " is convened by the institute of Chartered Secretaries and administrators Sri Lanka and sponsored by Sampath Bank.

Nexia anniversary and get-together

B.R.de Silva & Company, chartered accountants, celebrated their 45th anniversary last week at Hotel Trans Asia.

The occasion marked an anniversary-alumni get-together and a regional meeting of the Nexia International. The guests hosted were Nigel Hodgers, Executive Director Nexia, United Kingdom, and Selwyn Mar, Chairman of the Asia Pacific Region along with other partners and representatives. The past alumni members, and the present members and staff headed by Nihal de Silva, senior partner were also present, along with CEO's of reputed companies.

The late Mr.B.R.de Silva founded B.R.de Silva & Company in 1954 with only 14 clients and 11 staff members. Under his guidance the company produced 180 professional accountants and at present with over 2000 alumni members the company has come a long way, and is a member of the prestigious NEXIA.

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