NestlÃ©â€™s Sri Lanka unit Sept quarter net profit up 16-pct
ECONOMYNEXT – Net profits at Sri Lanka’s Nestlé unit rose 15.6 percent to 941 million rupees in the September 2018 quarter from a year ago despite lower sales as it restrained costs amid sharply higher tax payments.
Sales of the local unit of the Swiss food multinational fell three percent to 9.3 billion rupees in the period, interim accounts filed with the stock exchange showed.
Cost of sales fell 12 percent to 5.59 billion rupees with gross profit up 13 percent to 3.7 billion rupees.
Nestlé Lanka’s basic earnings per share were 17.52 rupees in the September 2018 quarter.
EPS in the period to September 2018 was 48.77 rupees with net profit up 6.7 percent to 2.6 billion rupees.
Tax costs rose sharply in the September 2018 quarter, up 48 percent to 366 million rupees as Nestlé Lanka became subject to a higher effective tax rates under a new tax law from April 2018.
This led to profit being liable to tax at 28 percent.
Before the new law became effective Nestlé Lanka’s qualifying export profits were taxed at a concessionary rate of 12 percent, profit from its ready-to-drink milk business was taxed at the concessionary rate of 10 percent and profit from offshore business earned in foreign currency exempt from income tax.
(COLOMBO, 14 November 2018)