The performance of the Cargills Ceylon PLC was satisfactory for the quarter ended June 30, 2017 in light of the weak consumption environment, and external weather challenges including flooding and landslides, and a severe drought that continues to impact the Eastern, North Central and North Western Provinces.
Nevertheless, Cargills’ focus on price, quality and availability continued to resonate with its customers as indicated in the performance for the quarter. Group revenue grew 9.1% Year-on-Year (YoY) to Rs.22,881 million(Mn) for the quarter, resulting in operating profit growth of 10.5% YoY to Rs.1,596 Mn. Group Net Finance Costs increased 86.2% YoY to Rs.367Mn for 1Q 2017/18 on account of a YoY increase in Group debt and the rise in the market interest rates. Additions to PPE rose 130% YoY to Rs.937Mn.
Net Debt contracted 3.9% vis-à-vis the previous quarter to Rs.13.1Bn as at 30th June 2017, resulting in a Net Debt to 12M trailing EBITDA of 1.84X.
Share of Associate Profit rose to Rs.14.1Mn for the quarter (vs. a loss of Rs.29 Mn in the corresponding period) on account of the performance of associate Cargills Bank.
The loan book of Cargills Bank increased by 80.8% YoY to Rs.16.4Bn as at 31st March 2017 (Cargills Bank is consolidated one quarter in arrears due to the differing financial year-ends of Cargills Bank and Cargills (Ceylon) PLC).
Profit before tax rose 2.1% YoY to Rs.1,243 Mn for 1Q 2017/18, while Profit after Tax declined 1.6% YoY to Rs.795 Mn.
The Retail business reported a turnover of Rs.18,233Mn for the period, a growth of 9.2% YoY, while operating profit was Rs.896Mn, a growth of 7.6% over last year. Cargills successfully kept prices of key essentials below market prices in spite of rising inflation during the quarter. Three new KFC outlets were opened in 4Q 2016/17, which have performed well and supplemented same store growth during the period.
Sources : dailynews