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CIC Holdings crop solutions biz performs better with revival in agri activities

27 November 2018 12:00 am - 0     - {{hitsCtrl.values.hits}}


The turnaround at CIC Holdings PLC appears to be facing some tough challenges as the agricultural and industrial giant is still striving to plough ahead beating the headwinds faced by its multiple businesses, though its crop solutions business fared well during the September quarter. 

The diversified group reported a net profit of Rs.53.39 million or 56 cents a share for the July-September quarter (2Q19), compared to 20 cents a share reported for the same period, last year. The positive earnings were possible from a tax reversal of Rs.104 million, as the group reported a pre-tax loss of Rs.40.2 million. The top line during the quarter under review little changed at Rs.7.6 billion, barely up from the same period, last year but considerably up from Rs.6.7 billion earned in the previous quarter.

The group has been restructuring its diverse businesses since 2015 into five broad clusters—crop solutions, healthcare, industrial solutions, livestock and agri produce. 

During the process, CIC exited from the consumer and export of industrial chemicals sectors. 

The crop solutions cluster consists of fertilizer, seeds, plant nutrition and protection solutions. CIC Holdings was once the biggest supplier of fertilizer to Sri Lanka’s paddy cultivating community under the government-sponsored subsidy scheme. 

This business still remains the group’s largest segment in revenue and operating profits. 

The group was seen containing its direct costs as the group’s cost of sales declined by 2.25 percent year-on-year (YoY) to Rs.5.8 billion, from last year’s Rs.5.9 billion. 

However, the distribution expenses rose by 23 percent YoY to Rs.899 million, while the financing cost rose sharply to Rs.630 million, doubling from last year’s Rs.314 million. 

Meanwhile, for the six months ended September 30, 2018, the group made a net profit of Rs.30.52 million or 32 cents a share, compared to a net loss of Rs.67.91 million reported for the same period, last year. 

However, the profit before tax was sharply down to Rs.76.2 million, from Rs.276.2 million a year ago, on hefty financing costs. 

The group revenues were Rs.14.3 billion, down 5.77 percent YoY.     

The crop solutions cluster, which still stands as the group’s cash cow, reported an operating profit of Rs.531.5 million, compared to Rs.236.1 million reported for the same period, last year. 

The cluster revenue was Rs.4.4 billion, down from Rs.4.7 billion a year ago. 

The Captain family-controlled Paints & General Industries Limited holds a 53.31 percent stake in CIC Holdings and the Employees’ Provident Fund has a 9.06 percent stake being the company’s second largest shareholder. 


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