Melstacorp Limited, which houses Sri Lanka’s largest hard alcohol maker, reported earnings of Rs.1.34 per share or Rs.1.67 billion in net profits for the October-December quarter, down 7 percent from a year ago as finance costs and taxes rose sharply while the telecommunication unit weighed on the group performance.
Filing interim results for the first time after Melstacorp becoming the holding company of the diversified conglomerate in a complex share swap last year, the group recorded a gross revenue of Rs.27. 5 billion, up 17 percent from the same period last year.
The group beverage segment, which makes alcohol, made up over 90 percent of the total revenue of the group.
The finance cost rose by a massive 155 percent Year-on-Year (YoY) to Rs.337. 4 million, which is attributable to the rising rates of the borrowings by the economy.
The weighted average prime-lending rate rose more than 280 basis points during the 12 months to December 31, 2016.
The group’s tax expense during the quarter rose by 81 percent YoY to Rs.1.46 billion.
Meanwhile, for the nine months ended on December 31, 2016, the group reported earnings of Rs.4.66 a share or Rs.5.88 billion profit recording an increase of 16 percent YoY.
The group top line before taxes, duties and levies rose by a strong 29 percent YoY to Rs.81.9 billion.
The beverage sector revenue was more than Rs.74 billion.
The troublesome telecommunication segment reported a massive loss of Rs.974.1 million expanding from Rs.439 million YoY.
The group plantation business however contracted its losses to Rs.119 million despite the recent challenges the sector faced on a revenue of Rs.1.8 billion largely unchanged YoY.
Business tycoon Harry Jayawardena had over 57 percent stake in Melstacorp as of December 31, 2016, directly and through other entities controlled by him— Milford Exports (Ceylon) (Pvt.) Ltd, Lanka Milk Foods (CWE) Ltd. and Stassen Exports (PVT) Ltd.
Norges Bank, the Central Bank of Sweden, held 25 million shares or 2.14 percent stake being the 7th largest shareholder.