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Monday April 15th, 2024

Sri Lanka’s Ceylon Grain Elevators profits grow in June with exports

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) 
 
 
 

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Iran President to visit Sr Lanka on April 24 anid rising tension, inaugurate Omaoya power project

ECONOMYNEXT – Iranian President Ebrahim Raisi will arrive in Sri Lanka on April 24 on a one-day official visit to inaugurate Tehran-assisted $529 million worth Uma Oya multipurpose development project with 120MW hydro power generation capacity, official sources said.

The announcement on President Raisi’s visit comes two days after Iran launched explosive drones and fired missiles at Israel in its first direct attack on Israeli territory, a retaliatory strike that raised the threat of a wider regional conflict.

“The President is visiting to inaugurate the Omaoya project. He will be on a one-day visit,” an official at Iran embassy in Colombo told EconomyNext.

A Sri Lankan Foreign Ministry official confirmed the move.

This is the first time an Iranian President coming to Sri Lanka Iranian after then President Mahmoud Ahmadinejad’s visit in April 2008.

The Omaoya project was originally scheduled to be completed in 2015, but had been delayed several times due to unexpected issued faced during the project cycle and funding issue after the United States imposed economic sanctions on Iran and economic crisis in Sri Lanka.

The project was started in 2010 and the funding was to be received as loan grant from the Iranian government. However, Iran was able to provide $50 million before the sanctions. Sri Lanka has to bear the cost after the sanctions.

The project includes storing water in two reservoirs with dams before being brought through a 23 km tunnel to two turbines located underground and generating hydro power with a capacity of 120 megawatts and added to the national grid.

After power generation, the water is expected to be brought to three reservoirs while supplying water to 20,000 acres of old and new paddy fields in both the Yala and Maha cultivating seasons.

The Memorandum of Understanding (MOU) for the construction was signed between the two countries in 2007 while Sri Lanka’s Cabinet approved the execution of the contract agreement between the Executing Agency, Sri Lanka’s Ministry of Irrigation and Water Management (MOIWM) of the GOSL and Iran’s FARAB Energy and Water Projects (FC).

When commencing the project on March 15, 2010, the scheduled date of completion of the project was on March 15, 2015. But the schedule completion date was extended to December 31, 2020 due to the unexpected water ingress into the head race tunnel and followed by social impacts.

The trade between the both countries suffered after the US sanctions. However, Sri Lanka inked a deal in December 2021 with Iran to set off export of tea to Iran against a legacy oil credit owed by state-run Ceylon Petroleum Corporation to the National Iranian Oil Company.

Sri Lanka owes $251 million for crude imported before the US imposed sanctions on Iran. (Colombo/April 15/2024)

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Sri Lanka to discuss two contentious points with bondholders: report

ECONOMYNEXT – Sri Lanka and sovereign bondholders are to discuss two matters in the near future which the two sides failed to reach agreement at March talks in London, a media report quoting a top aide to President Wickremesinghe as saying.

Sri Lanka and bondholders had discussed four matters on restructuring international sovereign bonds in late March and agreement had been reached on two, President’s Chief of Staff Sagala Ratnayake was quoted as saying on state-run ITN television.

A restructuring proposal by bondholders was not in line with IMF requirements, and Sri Lanka had sent a counter proposal, he said.

The matters will be discussed at round of talks in the near future.

Sri Lanka was optimistic of reaching an agreement with the bondholders before June, officials have said.

According to matters already in the public domain, sovereign bond holders are keen to get a bond tied to dollar gross domestic product, as they feel IMF growth projections are too low.

In past re-structuring so-called value recovery instruments, a type of warrant, gave their owners extra payments if a country did better than expected and were tied to items like oil prices.

Bondholders had initially proposed bond which would have a lower hair cut initially, and it will have additional hair cuts if growth is low (about 3.1 percent) as projected in an IMF debt sustainability analysis. (Colombo/Apr15/2024)

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BIMSTEC Secretary General visits Sri Lanka, discusses regional cooperation

ECONOMYNEXT – The Secretary General of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), discussed measures to enhance regional cooperation, during his visit to the island last week.

Ambassador Indra Mani Pandey, Secretary General of BIMSTEC visited Sri Lanka from 07 – 12 April 2024, following his assumption of office as Secretary General of BIMSTEC in January this year.

The Secretary General “met with senior officials of relevant Ministries/Agencies to discuss measures to enhance regional cooperation under various BIMSTEC initiatives,” the Foreign Ministry said in a statement.

Several BIMSTEC countries have bilateral trade agreements, such as Sri Lanka and India, Thailand and Myanmar, Sri Lanka and Thailand, but no collective regional agreement to enable intra-regional leverage.

During the visit, Secretary General Pandey held discussions with Ministry of Foreign Affairs officials and paid courtesy calls on the President and the Minister of Foreign Affairs.

Secretary General Pandey participated at an event on “Regional Cooperation through BIMSTEC” organized by the Lakshman Kadirgamar Institute (LKI) on 9 April. (Colombo/April15/2024)

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