By Chandeepa Wettasinghe
Ceylon Cold Stores PLC (CCS), one of the two fast-moving consumer goods arms of John Keells Holdings PLC, posted a net profit of Rs.651.62 million for the quarter ended December 2015 (3Q16), growing 106 percent year-on-year (yoy).
Earnings per share (EPS) increased to Rs.6.86 from Rs.3.33 yoy, while dividend per share remained at Rs.5, against a share price of Rs.426.20 at closing yesterday, up Rs.26.20 from the previous close through minor retail trading after reaching an intraday high of Rs.429.
CCS, which operates the Keells supermarkets, and produces the Elephant House branded ice creams and soft drinks, posted a revenue of Rs.8.61 billion, which was a 22 percent growth yoy.
However, a teaser highlighting the slowdown of consumption in Sri Lanka—as warned by experts for 2016—could already be seen in the CCS financial statements.
The quarter, which usually has better growth given the festivities, recorded a quarter-on-quarter growth of just 5.9 percent, compared to 7.6 percent in 2014.
Cost of sales for 3Q16 increased 18 percent yoy to Rs.7.35 billion, leading to a gross profit of Rs.1.26 billion, which increased 59 percent yoy.
Other operating income increased from Rs.382.63 million to Rs.437.84 million yoy, while administrative expenses grew to Rs.272.45 million from Rs.228.72 million yoy, and net finance income rose to Rs.38.88 million from Rs. 4.31 million yoy.
The asset base as at December 30, 2015 rose to Rs.19.16 billion from Rs.16.50 billion as at March 31, 2015 through increases across most assets.
However, short-term investments recorded a significant growth, increasing to Rs.2.14 billion from Rs.730 million during this time period.
Total borrowings reduced to Rs.104.8 million in December from Rs.185.33 million at the start of the financial year, while the bank overdrafts increased to Rs.788.18 million from Rs.523.6 million in the same period.
The time frame also saw equity rising from Rs.10.66 billion to Rs.11.86 billion, with an increase in revenue reserves.
Profits for the first 9 months increased 106 percent yoy to Rs.1.91 billion, with revenue rising 21 percent yoy to Rs.24.55 billion and cost of sales growing 16 percent yoy to Rs.20.75 billion.
The Elephant House product portfolio brought in the largest profits for the 9 months with Rs.1.31 billion, growing from Rs.743.32 million yoy, while total revenue rose to Rs.8.34 billion from Rs.6.98 billion yoy.
However, retail segment grew at a faster pace, with profits of Rs.600.74 million compared to Rs.232.08 million yoy, while revenue rose to Rs.16.12 billion from Rs.13.54 billion yoy.
The John Keells Group owns 81.31 percent of the shares in CCS, falling just below the 20 percent public float rule which will be strictly enforced from this December.