Plantations help Richard Pieris stay afloat in 2Q

The diversified Richard Pieris and Company PLC (RICH) managed to maintain a 2 percent growth in its bottom line for the second quarter of the 2018 financial year (2Q18), compared to the corresponding period last year with a net profit of Rs.868.16 million despite escalating costs, with the group’s plantation segment providing impetus 
for growth.

RICH’s basic earnings per share increased marginally to Rs. 0.43 year-on-year (YoY). Revenue for the quarter increased 7 percent to Rs. 13 billion YoY. However, cost of sales increases overtook at 8 percent YoY to reach Rs. 9.6 billion.

As a result, the group’s gross profits increased by 4 percent YoY to Rs. 3.4 billion. Administrative expenses recorded an increase of 12 percent YoY to Rs. 1.5 billion, further affecting bottom line growth.

The group’s plantation segment continued to be the best performer during the 6 month period so far in the 2018 financial year, with Rs. 858.8 million in operating profits, more than tripling compared to the equivalent period last year due to recovery in global commodity prices, while revenue from the segment grew 25 percent YoY to 
Rs. 4.7 billion.

The retail segment of the group recorded a Rs. 832.5 million operating profit with a growth of 6.5 percent YoY. All other business interests of the group, including rubber, tyre manufacturing, plastic and furniture production, and financial services recorded operating losses, despite recording revenue growth.

Overall, the first half of the financial year 2018 saw RICH’s net profit increasing 3 percent YoY to Rs. 1.5 billion, while both revenue and cost of sales grew at an equal 10 percent, recording Rs. 26 billion and Rs. 19.3 billion respectively.

The asset base of RICH improved 1 percent to Rs. 50.5 billion at the end of the second quarter of 2018 compared to the start of the financial year. The group managed to reduce its borrowings by 11 percent to Rs. 9.4 billion in the same period.

RICH’s largest shareholder is Skyworld Overseas Holdings Ltd, owning 25.37 percent of the firm’s shares. The second largest shareholder Camille Consulting Corp increased its ownership in RICH to 16.10 percent of the shares, compared to 15.57 percent at the end of March 2017.

The Deutsche Bank stake fell marginally to 11.05 percent of the shares, while Sezeka Limited increased its stake in RICH to 9.02 percent compared to 8.57 percent during the six months.

The Employees’ Provident Fund was the fifth largest shareholder with an 8.35 percent stake in RICH.