High net worth investor Imtiaz Buhardeen via his Almas Holdings yesterday, acquired a 10% stake of Asia Siyaka Commodities PLC for Rs. 120.5 million.
He bought 26.27 million shares at Rs. 4.60 each. The bulk of the shares was from a foreign shareholder, and the balance was collected from the market. Purchases were via Almas Holdings Ltd. and Almas Capital Ltd.
Buhardeen is hopeful of sustainable growth in the plantation sector. He said considering the phenomenal growth in the tea and commodity export segment and the further enhancement that may be expected with the relaxation of import of fertiliser which will boost the volumes in years to come.
Buhardeen, who follows a similar strategy to Berkshire Hathaway, is more interested in acquiring assets that have long-term growth prospects and has built up an investment portfolio in excess of Rs. 10 billion in both equities and property under his brand name Almas Holdings.
Almas Group has been at the forefront of the investment arena with its latest acquisition of the pioneer stockbroker license of Assetline Securities renamed Almas Equities.
Asia Siyaka (ASIY) is one of Sri Lanka’s leading tea brokers 51% is held by Akbar Brothers controlled-Lanka Commodity Brokers Ltd., chaired by chartered accountant T. Someswaran and run by a team of experts.
ASIY, as one of the main players in the trade, handles approximately 14.77% (or 41 million kilograms) of the country’s total traded tea volumes. It acts as an intermediary between the manufacturers and buyers of tea providing warehousing solutions ensuring the smooth functioning of tea auctions, providing customers with market intelligence, guidance on factory and estate management, energy conservation, ongoing research on emerging industry trends and bridging the short term working capital needs of customers.
ASIY also holds a 100% stake in Asia Siyaka Warehousing Ltd., which contributes 68% of the group revenue and 72% of the group Profit before tax. However, Asia Siyaka Produce Brokers is another fully owned subsidiary.
In 2021/22 the Group returned to profitability recording a pre-tax profit of Rs. 170.76 million (compared to a loss of Rs. 29.87 million in the previous year) while profit after tax clocked in at Rs. 119.17 million.
The strong financial performance also supported the Group’s financial stability during the year, with total equity increasing by 7% and accounting for 33% of the Group’s total funding. In the first quarter of 2022/23, the company reported a profit after tax of Rs. 78.4 compared to Rs. 23 million, an impressive 240% growth over the last year's first quarter with an EPS of Rs. 30 per share.
Sri Lanka tea exports fell 9.7% from a year ago to 23 million kilograms in August, but rupee incomes hit a record, as a result of the rupee collapsing from 182 to the dollar to 360 to the dollar after two years. The average rupee value of a kilogram of exported tea also hit Rs. 1,951.82, compared to an average of Rs. 750.00 in the last year.
Buhardeen said with the plantation sector performing at its best in terms of value Asia Siyaka can easily capitalise on its growth story providing healthy returns to its stakeholders. ASIY with its impressive first quarter performance has already paid an Interim Dividend of 35 cents per share for FY 2023.