Sri Lanka’s Tess Agro struggles despite EU GSP+
ECONOMYNEXT – Sri Lanka’s Tess Agro which exports fish to Europe is struggling to make use of the reinstatement of GSP Plus trading concessions with losses expanding 10.4 percent from a year earlier to 13.2 million rupees in the March 2018 quarter, interim accounts showed.
The company reported a 4 cents loss per share in the quarter. The share last traded at 70 cents on the Colombo Stock Exchange.
The loss per share was 10 cents for the year to end March 2018 with revenue declining 33 percent from a year earlier to 310.6 million rupees, interim accounts filed with stock exchange showed.
The company which exports fish to Europe has been making losses over the previous three years after the EU slapped a ban on fish exports from Sri Lanka for failing to prevent poaching.
Despite EU reinstating GSP Plus trade concessions in June 2017, pick up in export volumes was slow due to challenges in sourcing fish.
"As a result of the ban many fishermen had abandoned their livelihood," the company’s chairman Faika Fernando told shareholders in the 2016/17 annual report.
Gross profit in the March quarter grew 7 percent from a year earlier to 6 million rupees with revenue declining 33 percent to 47 million rupees and cost of sales falling at a faster 37 percent to 41 million rupees.
Administrative expenses declined 5 percent to 9.3 million rupees, selling and distribution costs rose 140 percent 6.7 million rupees.
Net finance cost increased 20 percent to 3.1 million rupees.
Less than 1 percent of its revenue is made selling fish to the Sri Lankan market for which it operates a cannery. (COLOMBO, 08 June 2018)