Kelani Cables - 6 months net profits soar 150%

PROFITS: Kelani Cables Ltd has recorded a remarkable increase in net profits for the second quarter ended September 30, 06 with Rs. 115 m compared Rs. 42.5 for the corresponding period last year.

This represents an impressive increase of 172%.

For the six months period the group has recorded a net profit of Rs. 220 m in comparison to Rs. 87 m for the previous corresponding period which is an increase of 152%. Accordingly annualized net profit of Rs. 440 m would result, in a very high earnings per share of Rs. 40.40.

The turnover for the period ended September 30 records Rs. 1436 m against Rs. 800 m for the corresponding period for 2005 - 06 with an increase of 79.5%.

As evident from the substantial increase in profits and turnover the group has tremendously benefited from construction boom in high rise commercial and apartment buildings, large scale housing projects in the country during the recent past.

Due to the large housing projects proposed and several incentives given for infrastructure development in the recent budget the turnover and net profits of the group are expected to accelerate in the near to medium term.

The group which is a subsidiary of ACL Cables Ltd has a paid up capital of Rs. 109 m and a substantial reserves amounting to Rs. 1002 m with a ratio of almost 1:10.

The annualised earnings per share of Rs. 40.40 has a price earnings ratios of only 3.5 considering the price of Rs. 142 on November 30, 06 which is a substantial discount to overall P.E. of 14.8 and sectoral P.E. of 10.6.

The shareholders of ACL Cables have been recently rewarded with a 1 for 1 bonus and 30% dividend and similarly it is expected that Kelani Cables Ltd too would reward its shareholders very early.