Diversified conglomerate, Richard Pieris and Company PLC, increased its January – March quarter (4Q17) earnings by as much as 152 percent to Rs.890.1 million or 44 cents from a year ago, well supported by its major business segments led by retail, but the plantations business encountered challenges, the interim financial accounts showed.
This was on the back of a revenue of Rs.12.8 billion, up 18 percent year-on-year (YoY) and better management of overall cost of the group.
The group’s operating profit rose as much as 79 percent YoY to Rs.1.46 billion.
Richard Pieris, a name once synonymous with rubber and related products, over the years diversified into manufacturing of tire, furniture and plastics and financial services.
For the 12 months ended March 31, 2017, the group recorded revenue of Rs.49.1 billion, recording an increase of 14 percent YoY.
The group earnings for the year rose by a strong 48 percent YoY to Rs.3.2 billion or Rs.1.56 a share while the operating profit for the year increased by 34 YoY percent to Rs.5.3 billion. Group’s retail segment is the leading contributor with a 50 percent and 33 percent contribution to the top and bottom-lines, respectively, but the business felt the brunt of, “stiff competition coupled with the increase in value added tax”, said Dr. Sena Yaddehige, the Chairman and Chief Executive Officer of the group, in his annual
review of operations.
Richard Pieris currently operates 21 superstores under the brand, ‘Arpico’ with another 17 showrooms and 23 Arpico daily outlets generating an annual revenue of close to Rs.25 billion. Meanwhile, the group’s plantations business, which owns 54 plantation estates covering 32,097 hectares, faced challenging operating conditions from extreme weather conditions and higher cost of production, yet managed to increase the revenue by a modest 5.54 percent YoY to Rs. 3.45 billion.
“The withdrawal of government fertilizer, ban of weedicides, increase in daily labour wages from Rs.620 to Rs.730, and the negative impact of the weather pattern resulted in a higher cost of production for the company which in turn affected the margins”, the company’s annual operational review said. Richard Pieris group is the largest tea and rubber producer in the country.
Recently, the group’s financial services arm, Richard Pieris Finance Limited, which has an asset base of Rs.12.4 billion merged with Chilaw Finance PLC, a subsidiary of the group, and consequently delisted from the Colombo bourse. Group’s other key businesses such as value added rubber, tire manufacturing and furniture and plastic had satisfactory performance with their revenues and operating profits making gains. During the financial year, the company saw an exodus of non-executive directors from its board.
By end of March 2017, the state controlled private sector pension fund, the Employees’ Provident Fund held 8.35 percent stake being the fifth largest shareholder of the company.