Sri Lanka’s Bairaha Dec profits down as costs rise
ECONOMYNEXT– Sri Lanka’s Bairaha Farms Plc posted a net loss of 742,875 rupees in December 2019 quarter, from a 43.66 million rupee profit a year earlier on falling revenue and rising costs, interim financials showed.
The group reported a loss of five cents per share for the quarter. For the nine months to December, Bairaha reported 6.72 rupees in losses per share on net losses of 107.51 million rupees.
Bairaha, which owns poultry breeder farms, broiler farms, hatcheries and a meat processing factory, closed trading on Monday 6 rupees down at 107 rupees a share at the Colombo Stock Exchange.
Revenues for the December quarter was 1.16 billion rupees, falling five percent from a year earlier, while cost of sales grew 12 percent to 1.02 billion rupees, leading gross profits to fall 59 percent to 147.55 million rupees.
Revenue fell as market players had expanded plants by 10 percent, expecting a tourist boom to grow the demand for chicken, industry officials said.
The industry had also expected poultry demand in the local market to continue its growth, from 9 kilogrammes per capita consumption in 2017 to 10 kilogrammes in 2018.
However, the Easter Sunday bombings had caused tourist arrivals to fall 19 percent.
Sales had also declined as the economy took successive hits from a balance of payments crisis, the constitutional dilemma and terror attacks.
Cost of sales meanwhile grew due to rising prices of maize, which is used to produce chicken feed.
Poultry producers who expanded are expected to maintain high production as the industry outlook turned favorable with tax cuts and a pickup is now being witnessed in consumer demand.
Meanwhile, Bairaha’s finance costs in December fell 13 percent from a year earlier to 16 million rupees.
Long-term borrowings fell 6.4 percent to 278.61 million rupees in December from the start of the financial year in April, while current borrowings grew 22.9 percent to 229.89 million rupees.
Bairaha drew down cash reserves of 429.73 million rupees to 162.04 million rupees during the nine months, and the firm’s asset base fell 0.5 percent to 3.19 billion rupees.(Colombo/Jan27/2020)