Imtiaz Buhardeen, a high net worth investor, purchased a 10% interest in Asia Siyaka Commodities PLC through his Almas Holdings yesterday for Rs. 120.5 million.
He purchased 26.27 million shares for Rs. 4.60 each. The majority of the shares came from a foreign stakeholder, with the remainder purchased on the open market. Almas Holdings Ltd. and Almas Capital Ltd. made the purchases.
Buhardeen is optimistic about the plantation sector’s long-term prosperity. He stated that given the amazing rise in the tea and commodities export segments, and the additional boost that may be expected with the loosening of fertiliser import restrictions, which will raise volumes in the coming years.
Buhardeen, who follows a similar strategy to Berkshire Hathaway, is more interested in acquiring assets with long-term growth potential and has amassed an investment portfolio worth more than Rs. 10 billion in both shares and real estate under his brand name Almas Holdings.
With its recent acquisition of Assetline Securities’ pioneer stockbroker licence, rebranded Almas Equities, Almas Group has been at the forefront of the investing field.
Asia Siyaka (ASIY) is a renowned tea broker in Sri Lanka. Akbar Brothers controls 51% of Lanka Commodity Brokers Ltd., which is chaired by chartered accountant T. Someswaran and managed by a team of specialists.
ASIY, as a major player in the trade, handles approximately 14.77% (or 41 million kg) of the country’s total traded tea volumes. It acts as a bridge between tea manufacturers and buyers, providing warehousing solutions to ensure the smooth operation of tea auctions, market intelligence, guidance on factory and estate management, energy conservation, ongoing research on emerging industry trends, and bridging customers’ short-term working capital needs.
ASIY also owns 100% of Asia Siyaka Warehousing Ltd., which accounts for 68% of group revenue and 72% of group profit before tax. Asia Siyaka Produce Brokers, on the other hand, is a wholly owned subsidiary.
The Group returned to profitability in 2021/22, achieving a pre-tax profit of Rs. 170.76 million (compared to a loss of Rs. 29.87 million the previous year), while profit after tax was Rs. 119.17 million.
The Group’s financial stability was further backed by the outstanding financial performance, with total equity increasing by 7% and accounting for 33% of total funding. The company declared a profit after tax of Rs. 78.4 million in the first quarter of 2022/23, up from Rs. 23 million the previous year, a 240% increase with an EPS of Rs. 30 per share.
Tea exports in Sri Lanka declined 9.7% year on year to 23 million kg in August, while rupee income reached a new high as the rupee plunged from 182 to the dollar to 360 to the dollar after two years. The average rupee value of a kilogramme of exported tea reached Rs. 1,951.82, up from Rs. 750.00 the previous year.
Buhardeen believes that with the plantation industry functioning well in terms of value, Asia Siyaka would be able to capitalise on its growth narrative and provide strong returns to its stakeholders. ASIY has already paid an interim dividend of 35 cents per share for fiscal year 2023, owing to its strong first-quarter performance
