Citrus Leisure PLC (REEF) has returned to profitability, posting a net profit of Rs.255.41 million for the fourth quarter of 2016 (4Q16), recovering from a net loss of Rs.164.77 million in the previous year, backed by better revenue and revaluation of strategic investments. The last quarter that REEF made a quarterly profit was in the fourth quarter of 2014, with a net profit of Rs.26.67 million. Revenue for 4Q16 increased 49.25 percent year-on-year (YoY) to Rs.377.97 million, while cost of sales increased 43.87 percent YoY to Rs.81.33 million.
The operating expenses decreased to Rs.52.70 million from Rs.154.86 million YoY, while a strategic investment in the Liberty Plaza complex ensured that associate company profits shot up to Rs.276.68 million from a loss of Rs.5.26 million YoY through a change in value of investment properties.
The group’s asset base improved to Rs.7.90 billion from Rs.7.54 billion a year ago, mainly through increased investments in associate companies, while long-term borrowings increased to Rs.2.01 billion from Rs.1.63 billion and short-term borrowings decreased to Rs.1.56 billion from Rs.1.60 billion in the same period. REEF’s first property, Citrus Hikkaduwa, posted a revenue of Rs.110.90 million, improving 13 percent YoY, while the flagship Citrus Waskaduwa contributed Rs.215.60 million in revenue, improving 46 percent YoY. Citrus Silver, which manages the business boutique hotel The Steuart by Citrus in Colombo, which opened in July 2015, contributed Rs.49.90 million to the top line. The 2016 (FY16) financial year saw REEF taking steps towards profitability, narrowing its net loss to Rs.40.96 million from Rs.390.17 million a year ago.
REEF was last in the green during the 2012 financial year, with a net profit of Rs.3.46 million. The revenue for 2016 strengthened 76.31 percent YoY to Rs.1.09 billion, while the cost of sales increased 82.49 percent YoY to Rs.278.40 million. The administrative expenses increased 115.60 percent YoY to Rs.506.15 million, possibly due to the addition of the new Colombo City property.
The share of the associate companies’ profits once again contributed Rs.274.35 million, improving from Rs.30.95 million YoY. Citrus Waskaduwa posted a revenue of Rs.651.30 million, increasing 104 percent YoY during its first full year of operations, while Citrus Hikkaduwa contributed Rs.295.70 million, increasing 9 percent YoY. Citrus Silver contributed Rs.128.50 million in revenue.