First Capital reports higher revenue, trading income in 1st H2013
First Capital Holdings PLC, a nonbank financial service provider, has recorded healthy gains in revenue and trading income in the first six months of the 2012/2013 current year, but seen a decline in the gain on fair value of financial investments held or trading.
Income for the first half of 2013-14 was up 32.7 per cent to Rs 909.8 mil- lion, and net trading income grew by 47 per cent to Rs 253 million, the company said in a statement to the media.
However, the gain on fair value of financial investments held for trading declined by Rs 126.3 million over the corresponding six months of the previous year, and coupled with a 66.7 per cent increase in administrative expenses, contributed to lower pre and post tax profits, interim financial statements released by the company showed.
Profit before tax at Rs 128.9 million for the six months, fell by Rs 8.7 million over the corresponding period of last year.
Taxes of Rs 27.6 million on dividends resulted in taxation for the period increasing six fold to Rs 33.5 mil- lion. Consequently, profit after tax for the six months at Rs 95 million was Rs 37 million below that of the first half of the previous year.
“First Capital Treasuries Ltd, our primary dealer arm, displayed sustained performance during the period under review,” the Group’s Director/CEO Jehaan Ismail said. “There was also contribution from the struc- turing and placement of corporate debt securities, though not to the level we expected. In addition to taking trading and strategic investment positions, the Primary Dealer business also benefited through the reduction of policy rates made by the Central Bank of Sri Lanka. Policy rates were cut by 50 basis points in May 2013 and there was also another 50 basis point cut in October 2013.”
“Primary dealers were allowed to deal in corporate debt securities in July 2013 and this should give our overall business a new dimension,” he said, but noted that competition in the business is also on the rise with the Central Bank issuing three primary dealer licenses since 1stApril 2013.