Economic woes, political uncertainty on the local front will downgrade Sri Lanka's sovereign rating in the fourth quarter of  2019, Director/Chief Executive of Janashakthi PLC Ramesh Schaffter said.

“Sri Lanka’s GDP recorded only modest growth of only 3.2% in 2018, suggesting the economy continues to remain highly vulnerable to global and domestic disturbances. On the global front, ongoing monetary policy normalization measures in the USA meant emerging economies such as Sri Lanka experienced large capital outflows, as well as increased pressure on exchange rates.”

“To add to these economic woes, political uncertainty on the local front further exacerbated the situation, prompting the country’s Sovereign rating to be downgraded in the fourth quarter of the year. Moreover, the USD 1.5 billion IMF bailout package was also suspended in November 2018, but was subsequently reinstated following successful negotiations,” Schaffter told shareholders in the annual report 2018/2019.

In the year 2018/2019, the group increased its revenue to Rs.7.18 billion from Rs. 5.95 billion reported in the previous financial year and reported a net profit after tax of Rs.1.69 billion compared to an after-tax profit of Rs. 8.56 Billion.

Janashakthi PLC acquired 98.1% of Dunamis Capital PLC following the increase in stake to 41.14% in September 2018.

Consequently, Janashakthi PLC also becomes the ultimate parent of First Capital Holdings PLC and Kelsey Developments PLC and KHL Corporate Services Limited, subsidiaries of Dunamis Capital PLC.

Meanwhile highlighting about future plans Schaffter noted that they expect to offer some very bankable synergies that would strengthen the capacity to respond to new opportunities and enable each of their businesses to grow in their own right.

“We would remain especially mindful of our gearing levels and continue to focus on the timely divestment of the non-core investments in order to bring down gearing levels and improve the overall capital profile over time,” he said.

Schaffter further noted that next year they will largely focus on driving growth through new business in an attempt to leverage on the immense opportunity that exists within the Life Insurance industry.

“As a sales-centric organization, we have created significant changes in our sales and distribution networks to facilitate growth and have identified critical geographies and important partners as key focuses of our business for 2020,” he added.

Janashakthi PLC was incorporated in 9 May 1994 under the name of Acland Finance Limited.

The company underwent two name changes between 1994 and 2002 prior to changing its name to Janashakthi Limited on 9 September 2004.

The company listed its Debentures on the Colombo Stock Exchange (CSE) on 1 December 2014 for its Debentures and underwent a further name change as a result to Janashakthi PLC on 29 January 2015.

The principal business of the company is that of an investment holding company investing in its subsidiaries and providing related services.

The Janashakthi Group operates in the insurance, finance, investment and real estate sectors. Janashakthi PLC is the ultimate parent company of the Group and it owns 79.75% of its main subsidiary Janashakthi Insurance PLC which is listed and has a market capitalization of LKR 6.79 billion.

The Company owns 90.98% of Orient Finance PLC which has a market capitalization of LKR 1.92 billion.