Sri Lanka’s Ceylon Cold Stores December net profit down 38-pct
ECONOMYNEXT – Profits at Sri Lanka’s Ceylon Cold Stores fell 38 percent to 351 million rupees in the December 2018 quarter from a year ago as raw material and interest costs rose, despite sharply lower tax expenses owing to a tax reversal.
Sales of the group, which operates the Keells supermarket chain and makes fizzy drinks, juices and ice creams under the Elephant House brand, rose 18 percent to 15 billion rupees, interim accounts filed with the stock exchange showed.
Quarterly earnings per share were 3.70 rupees. EPS was 8.23 rupees in the nine months to December 2018 with sales up 16 percent to 44 billion rupees.
Ceylon Cold Stores stock closed at 620.10 rupees Wednesday, down 51.10 rupees or 7.6 percent.
Retail business profits fell in the quarter despite higher sales while profits and sales at its manufacturing unit were lower.
The group’s gross profit margin for the quarter was down to 9.7 percent 10.4 percent a year ago, brokers Bartleet Religare Securities said in an analysis.
This was owing to higher costs, mainly in the retail business, and also rising raw material prices in the manufacturing unit, especially after an import duty hike on sugar in October 2018.
The accounts of Ceylon Cold Stores, part of the John Keells Holdings group, showed sharply higher selling and distribution expenses in the December quarter, as well as other operating expenses.
Tax costs fell 96 percent to just below 10 million rupees owing to a one-off tax reversal.
Bartleet Religare Securities said Ceylon Cold Stores’ finance costs grew by 2,366% to 199.9 million rupees due to increased overdraft borrowings.
(Colombo/January 30/2019 – SB)