ECONOMYNEXT-Sri Lanka's Ceylon Grain Elevators, a feed milling and poultry firm, said profits rose 8.2 percent in the June 2019 quarter to 187.8 million rupees from a year ago with better export demand, amid falling local sales for processed meat and broiler chicks following the Easter Sunday attack.
Earnings per share for the quarter were 3.13 rupees. Earnings per share for the six months to June were 7.10 rupees. The firm's share last traded at 61.90 rupees on Friday, closing 4.90 rupees higher.
Revenue grew 10 percent in the June quarter from a year earlier to 4.3 billion rupees, while cost of sales rose 10 percent to 3.9 billion rupees, leading to gross profits rising 11 percent 441.9 million rupees.
“The consistent feed quality and improved demand for day old chicks (DOCs) strengthened the Group revenue,” Chief Executive Cheng Chih Kwong, Primus told shareholders in an earnings release statement.
“Export market revenue from parent stock DOC’s also led to an increase in the revenue during the quarter," he said.
"However, the demand for processed chicken and broiler DOCs were adversely affected during the second quarter due to the aftermath of the April 2019 terror attack."
He said that lower demand for meat from hotels, restaurants and cafes following the attack led to lower demand for broiler DOCs from farmers.
He said that cost of production grew due to short supply of maize, which narrowed margins.
"It was noted that the issue of permits to import maize at the right time with the right quantitiy would be a definite relief to the industry at this juncture."
Net finance cost for the firm grew 47 percent to 24 million rupees in the June quarter after adopting the new SLFRS 16 standard on operating leases.
Lease liabilities for the quarter grew to 761.5 million rupees as at end June from the start of the financial year in January for a warehouse complex leased from the state under the new standard, balanced by a rise in right of use assets.#
For the six months to June, profits after tax from the milling and farming segment fell to 239 million rupees from 311.5 million rupees a year earlier due to rising operating costs despite a growth in revenue.
Profits from the poultry breeding and commercial meat segment grew to 377.7 million rupees from 316 million rupees with higher interest income.
(COLOMBO, Aug 12, 2019)