First Capital Holdings reports 9-month net profit of Rs. 199 m

Active trading strategies in the Government Securities market and strong gains from structuring and placement issues have enabled First Capital Holdings PLC (FCH) to post net profit after tax of Rs. 199 million for the nine months ended 31 December 2012.

In a filing with the Colombo Stock Exchange, the Group said Revenue increased by 31% to Rs. 1,160 million in the period reviewed. This increase was mainly attributed to above average returns from the company’s government securities operations as a result of First Capital’s ability to carry appropriate long term positions due to the strength of its capital base.

The company also raised a noteworthy Rs. 5 billion for a diverse group of clients through commercial paper, debentures and securitisations in the nine months reviewed, and has a fourth quarter pipeline of approximately Rs. 6 billion. First Capital’s net profit after tax for the third quarter (October-December 2012) was Rs. 86 million compared with a net loss after tax of Rs. 220 million in the third quarter of 2011/12.

Earnings per share for the period was Rs. 1.84 as against a loss per share of Rs. 0.99 in the corresponding quarter of the previous year. Group net assets per share stood at Rs. 13.13 as at 31 December 2012.

Commenting on the Group’s performance, Mangala Jayashantha, Chief Financial Officer of First Capital, said: “First Capital’s success is largely due to its ability to maximise returns in the bond market by developing large and profitable portfolios and holding favourable positions.”

He disclosed that consequent to the tax exemptions granted in the Government’s 2013 Budget, the Group will also be able to further capitalise on its corporate debt business and take advantage of the proposals in the Central Bank’s Road Map for 2013.

Focusing on new business lines for the company, he noted: “We will now see more opportunity in the corporate finance advisory space. First Capital is ready to assist corporate clients with their strategic financial issues. We are geared to work with companies to improve the odds of successful Mergers and Acquisitions (M&A) by way of fund raising in the capital markets or by providing focused and in-depth advice on M&A, both on the buy side or sell side, and on other corporate finance activities.”

“Our team of experienced corporate finance professionals are working on a variety of assignments involving a broad spectrum of industries and will definitely add significant value to our clients’ initiatives,” Jayashantha added.

One of the best performing non-bank financial service providers in the review period, the First Capital Group has been a leader in its category for over two decades. The Group has a Primary Dealership in Government securities regulated by the Central Bank of Sri Lanka, and operations as a margin provider, investment manager and a unit trust managing company all under the regulatory purview of the Securities and Exchange Commission of Sri Lanka. In addition, First Capital Markets Limited is a member of the Colombo Stock Exchange (CSE) for listed debt.

First Capital’s Board of Directors comprises Deshamanya Lalith De Mel (Chairman), Manjula Mathews, Jehaan Ismail, Dinesh Schaffter, Nihara Rodrigo, Eardley Perera, Minette Perera and Nishan Fernando.