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Central Finance Group recorded a Rs. 822 million net profit for the financial year 2003/4 as against Rs. 566 million recorded in the previous year.

The growth in profit is attributed to the resilience of the economy and effective management of resources as contributory factors.

Chairman of Central Finance Company, C. Wijenaike in his revive on annual performances said that the Central Finance has recorded the best year to-date in CF's history with inceptions rising to Rs. 6.4 billion and earnings increasing to the highest ever profitability of Rs. 763 million up from Rs. 505 million in 2003.

"Core business inceptions also expanded by 26% and core earnings by 46%, at Rs. 1.240 billion of net interest and operating income. CF's dividend was increased to 40% from 30% last year.

CF continued to expand its branch network which now covers 17 branches and four marketing outlets to cater to a rapidly expanding rural sector which brought in new business inceptions despite the fierce competition in the leasing business." Wijenaike said.

"We were also able to maintain our deposit growth with total deposits at March 31, 2004 recording Rs. 9.4 billion (as against Rs. 8.1 billion in 2003) with a significant increasing in deposits over the 12 months' category despite the reduction in deposit rates due to market conditions. However, we continue to look after our senior depositors and this year we attracted Rs. 675 million under our new senior citizens' deposit scheme which enjoys a higher interest rate than under other schemes," he said.

"Our associate companies in the tea sector have performed better than they did last year. Substantial improvements in operating results were also recorded in our associate in the banking sector as well as in our subsidiary in the UPVC manufacturing industry Central Industries. Increased dividends from Central Industries, Central Securities, Mark Marine and Tea Smallholder Factories Ltd. contributed to the increase in Group profitability. The Group also increased its stake in Tea Smallholder Factories from 27.37% to 29.30% during the year," he said.

Tea smallholder Factories Ltd's profit after tax increased by 125% from Rs. 28.6 million in 2002/2003 to Rs. 64.4 million in 2003/2004. The turnover increased 9% from Rs. 1.07 billion in 2002/2003 to Rs. 1.17 billion in 2003/2004.

Nation's Trust Bank Ltd's profit after tax increased by 454% from Rs. 45.5 million in 2002 to Rs. 252 million in 2003. The profit after tax from the core banking business increased by 125%. Customer deposits grew by 30% from Rs. 5.04 billion in 2002 to Rs. 6.57 billion in 2003, while loans and advances grew by 22% from Rs. 6.84 billion in 2002 to Rs. 8.36 billion as at end 2003.

CF Venture Fund was able to record a marginal operating profit of Rs. 0.8 million for the financial year 2003/2004 as compared to an operating profit of Rs. 18.7 million reported during the previous year. The previous year profits however included an exceptional profit of Rs. 21.3 million earned from divestment from a venture capital investment.

Capital Suisse Asia Ltd. (CSA) reported a net loss of Rs. 119,176 million for the financial year ended December 3, 2003 compared to a loss of Rs. 8 million for the preceding year.

CSA's main subsidiary, Zyrex Power Company Ltd. (ZPC) posted a revenue of Rs. 51 million compared to Rs. 61 million for the preceding year. The decline in revenue was due to its main hydro power plant at Delgoda being non-operational for three months due to damages sustained resulting from the unprecedented flooding that occurred in May 2003. However, ZPC was successful in re-commissioning the plant within three months and currently the generation is being carried out satisfactorily.

The company's net profit for the year was Rs. 14.8 million as against a net profit of Rs. 17.8 million (excluding capital gains) for the preceding year.

Central Securities Ltd. also achieved a profit after tax of Rs. 13.98 million compared with Rs. 7.8 million achieved the previous year.

Central Industries Ltd's turnover increased by 39% over the previous year to Rs. 632.5 million. The profit after tax was Rs. 34.1 million compared to Rs. 22.9 million in the previous year.

Mark Marine Services (Pvt) Ltd. turnover improved marginally from Rs. 58.5 million in 2002/2003 to Rs. 62.2 million in 2003/2004. However, the net profit after tax improved from Rs. 24.5 million in 2002/2003 to Rs. 36 million in 2003/2004. This was mainly due to the reduction in finance charges as a result of redemption of debt and reduction in the interest rates for long term debt. The improved profitability enabled the Company to declare a 25% dividend during the year under review.

CF Insurance Brokers (Pvt) Ltd. (CFIB) profit after tax on its operating activities was Rs. 4.1897 million for the year ended December 31, 2003 as against Rs. 1.128 million the previous year. However, as an extraordinary provision of Rs. 25.349 million had to be made for diminution in value of investments, a net loss of Rs. 21.16 million was recorded.

Dehigama Hotels Co. Ltd. provides office space which houses the Head Office of Central Finance and some of its subsidiaries in Kandy. This office complex is one of the finest appointed prime properties in Kandy utilising 90 perches of land. Even though turnover was marginally reduced at Rs. 5.528 million in the current year as against Rs. 5.672 million in the previous year, the profit before taxation was substantially higher at Rs. 2.58 million against Rs. 870,331 in the previous year.

Kandy Private Hospitals Ltd. (KPH) recorded further improvement in the operations of KPH with turnover increasing to Rs. 33.1 million from Rs. 27.3 million in the previous year.

Profit before tax was Rs. 6.858 million as against Rs. 4.8 million in the previous year, while profit after tax was Rs. 6.684 million as against Rs. 3.790 million in the previous year.

Central Transport and Travels (Pvt) Ltd. continues to provide hiring services to the Group. Net hiring income increased to Rs. 3.870 million from Rs. 3.514 million in the previous year.

Central Mineral Industries (Pvt) Ltd. continues as a producer of dolomite powder used extensively in agriculture and industry. The turnover for the year at Rs. 12.5 million is an increase over the previous year. However, due to the increase in costs, gross profit decreased to Rs. 4.380 million as against Rs. 4.769 million of the previous year.

(SP)

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