Sri Lanka JKH to invest Rs5.7bn in new ice cream, bottling plants
ECONOMYNEXT – Sri Lanka’s John Keells Holdings will invest Rs5.7 billion to set up new ice cream and beverage bottling plants to expand its frozen confectionery and beverage businesses which are seeing double digit sales growth and improved margins.
The conglomerate has just reported 8% group net profit growth to Rs3.8 billion in the September 2016 quarter from a year ago, with big gains from its consumer foods, retail and leisure businesses while transportation earnings fell.
Group sales rose 13% to Rs25.76 billion for the quarter, according to interim results filed with the stock exchange.
“Profitability of the Frozen Confectionery and Beverage businesses were driven by double digit growth in volumes and improved margins,” JKH chairman Susantha Ratnayake said in a note accompanying the results.
“In order to cater to the envisaged demand and address existing capacity constraints, investments in both a new ice cream plant and bottling line at a cost of Rs.3.20 billion and Rs.2.50 billion respectively are due to commence shortly.”
Ratnayake said the Retail sector continued its strong performance with steady growth in average basket values and customer footfall contributing positively towards a year-on-year growth in same store sales coupled with a notable incremental contribution from the newly opened outlets.
Nine new outlets have been opened during the period under review and a further eleven outlets are due to be opened during the remainder of the financial year, he said.
JKH group’s Consumer Foods and Retail industry business reported a 55% increase in pre-tax profit to Rs.1.60 billion in the second quarter of 2016/17 over the previous year.
(COLOMBO, Nov 05, 2016)