Cold Stores 3Q net profits up 26% as segments see strong sales

John Keells group subsidiary, Ceylon Cold Stores PLC (CCS), which has interests in consumer goods manufacturing and retailing saw both its top line and bottom-line making significant gains during the December quarter supported by stronger consumption demand, which continued unabated throughout 2016/17.
The interim results filed with the Colombo Stock Exchange showed the company recording a net profit of Rs.8.67 a share or Rs.823.7 million for the quarter ended December 31, 2016 (3Q17), an increase of 26 percent on year. 
The revenue topped Rs.11.3 billion, up 29 percent from a year ago.
 For the nine months ended on December 31, the company made a net profit of Rs.28.72 a share or Rs.2.7 billion, up 43 percent year-on-year (YoY). The revenue was Rs.30.4 billion, up 30 percent YoY. 
The group’s frozen confectionary and beverage business has been driven by double digit volume growth and improved margins, Susantha Ratnayake, John Keells Holdings Chairman said.
CCS is Sri Lanka’s oldest manufacturer of carbonated soft drinks. As a result of long studies carried out on reducing sugar and increasing natural flavours to its products to appeal to the growing health conscious consumers, the company recently launched its first non-carbonated soft drink to the market in 200 millilitre tetra packs. 

The manufacturing sector of the group increased its net profits by 25 percent YoY on a revenue of Rs.3.2 billion, which also increased by 19 percent YoY.  The group in 2016 announced plans for a Rs.3 billion ice cream factory which is expected to be commissioned in two years since the announcement.
Ceylon Cold Stores is the market leader in both carbonated drinks and frozen confectionary market in Sri Lanka.
Meanwhile, the group’s retail segment increased its net profit by 24 percent YoY to Rs.344.7 million while the segment’s revenues rose by 33 percent YoY to Rs.8.1 billion.
 “The retail sector continued its encouraging performance with steady growth in footfall contributing towards a YoY growth in same store sales, coupled with the incremental contribution from recently established outlets,” Ratnayake said.
  During the December quarter, CCS opened three new Keells Super outlets bringing the total store count to 61.
As of December 31, 2016, John Keells Holdings PLC held 70.61 percent of CCS. However the state controlled private sector pension fund, the Employees’ Provident Fund, which featured among the top 10 shareholders earlier, was not even among the top 21 shareholders of the company.