John Keells group processed food manufacturing subsidiary, Keells Food Products PLC (KFP), posted a net profit of Rs.89.34 million for the quarter ended September 30, a 6 percent year-on-year (YoY) decline, amid low revenue expansion.
Earnings per share fell to Rs. 3.50 from Rs. 3.75 YoY.
Revenue increased only 3 percent YoY to Rs. 806.53 million, while cost of sales rose 2 percent YoY to Rs. 553.79 million. The performance of the company could be a reflection of the tightening disposable incomes due to higher interest rates and rising cost of living. Administrative expenses increased 30 percent YoY to
Rs. 40.33 million.
The net assets per share edged down to Rs. 67.50 from Rs. 69.39 at the start of the financial year, while the total asset base remained relatively unchanged at
Rs. 2.41 billion.
The first 6 months of the year witnessed net profits contracting 10 percent YoY to Rs. 149.81 million, while revenue increased 5 percent YoY to Rs. 1.54 billion, and cost of sales increased 5 percent YoY to Rs. 1.07 billion. Other large scale poultry and processed meat manufacturers in the market have been posting large net profits so far this year.
However, Sri Lanka consumes significantly less processed food compared to its other Asian peers, indicating massive scope of growth.
KFP group comprises of KFP, which produces and markets products in Sri Lanka, and its 100 percent owned Indian subsidiary John Keells Food India (Private) Limited. The company had said that it was planning to resume exports to India this year, after regulations limited exports over the past 2 years.
The John Keells Group controls 89.89 percent of the shares in KFP through John Keells Holdings PLC, its tea brokerage John Keells PLC and tour company Walkers Tours Limited. The group divested 1.29 percent of the shares owned by its subsidiary Mack Air (Pvt) Limited in order to keep KFP in line with the 90 percent minimum public float limit to remain listed on the Colombo Stock Exchange.