A transformative contribution from its financial services unit has significantly bolstered the half-year profits of Dunamis Capital PLC, enabling the Group to post profit after tax of Rs 878 million for the six months ending 30th September 2014 against a net loss of Rs 0.22 million in the corresponding six months of the previous year.
The Group improved revenue by an impressive 68.6 per cent to Rs 1.8 billion and pruned its cost of sales by 13 per cent to Rs 742.5 million, achieving a five-fold improvement in gross profit from Rs 212 million in the first half of 2013-14 to Rs 1.05 billion for the period under review.
Dunamis Capital PLC is the holding company of First Capital Holdings PLC, Kelsey Developments PLC and Premier Synthetic Leather Manufacturers (Pvt) Ltd.
Provisional financial statements filed with the Colombo Stock Exchange show that the Group converted a loss of Rs 29.5 million on fair value of financial investments held for trading in the first half of last year, to a gain of Rs 419.7 million this year, and improved other operating income for the six months to Rs 188 million.
Net profit attributable to equity holders of the parent company amounted to Rs 664.7 million compared to an attributable loss of Rs 0.15 million for the first half of last year.
Earnings per share as at 30th September 2014 stood at Rs 5.40, while the Group’s net assets per share had improved from Rs 10.84 to Rs 16.32.
Commenting on the Group’s results, Dunamis Capital’s Chairperson Manjula Mathews said, “We are pleased with our performance to date which has considerably exceeded expectations but expect profits to moderate significantly in the second half of the year.”
Net profits of the Group’s financial services unit First Capital Holdings PLC grew to Rs 868 million for the period from Rs 95 million a year earlier. “The unit’s primary dealer arm remained the key contributor to profits as ideal trading conditions created opportunities for exceptional returns,” she added.
“Kelsey Developments PLC, the Property Development arm of the group showed improved performance during the first six months of 2014-15 in line with our expectations,” she reported, disclosing that the company’s consolidated profit after tax was Rs 22 million for the period.
Meanwhile, Premier Synthetic Leather Manufacturers, which commenced commercial operations during June 2014, posted an operating loss of Rs 44 million for the six months. “The unit has made steady progress in its sales efforts and we expect the company to be a strong contributor to group profits in the coming years,” Mathews said.
Elaborating on what lies ahead for the subsidiaries of Dunamis Capital PLC, she said: “Premier Leather will focus its efforts on strengthening its distribution network and will continue to engage actively with all potential customers. Kelsey plans to launch another large scale housing development before the end of the next quarter. With the persisting low interest rate regime in the country driving demand for housing the company’s outlook in the near term is positive in terms of future revenue and profits. At First Capital Holdings PLC, opportunities for exceptional gains are limited and the main focus will be on managing risks and maintaining acceptable income levels in our primary dealer while expanding the breadth of our investment banking services.”
In July 2014 Dunamis Capital PLC raised Rs 1 Billion in long term debt through a listed issue of 5 year Debentures.
The Board of Directors of Dunamis Capital PLC comprises of M. Mathews (Executive Chairperson) and Messrs D. Schaffter, N.E. Rodrigo, A.D.E.I. Perera, C. L. de Silva, S. Wickramasuriya and N. C. de Mel.
