Keells Food Products PLC (KFP) reported substantially lower profits for the quarter ended September 2021 (2Q22), as the company saw its sales continuing to languish as weak demand amid virus related restrictions on consumer activity added to mounting woes coming from the 
rising costs. 

The largest processed meat producer in the country reported revenues of Rs.1.06 billion for the three months under review, up 11 percent from the same period last year, as people cut down on company’s products when escalating prices started hurting consumer wallets. 

The company also experienced increased overheads during the quarter, something which was largely expected with the rising production costs amid import controls, weaker rupee, rising commodities prices amid supply chain bottlenecks witnessed around the world. 

The company saw its cost of sales rising by 17 percent  year-on-year (YoY) to Rs.801.7 million in the quarter, which dented its gross profit by 5 percent YoY to Rs.259 million.  

KFP Chairman Krishan Balendra in his annual review released in May said they confronted challenges in sourcing key raw materials such as chicken and pork.  

“Prices of chicken and pork recorded a gradual increase in recent months and have touched historically high prices driven by escalating costs of animal feed,” First Capital said in a post earnings review on the company in July. 

KFP saw its operating profit falling by as much as 42 percent to Rs.56.2 million in the September quarter from the same period last year.  The producer and the marketer of Krest and Elephant House branded processed foods reported earnings of Rs.1.85 a share or Rs.47.1 million in the July-September period compared to Rs.3.01 a share or Rs.78.9 million in the corresponding period last year. For the six months ended in September 2021, the company reported earnings of Rs.2.65 a share or Rs.67.6 million, down 43 percent, on revenues of Rs.1.95 billion, which was up 19 percent from the same period last year. 

The John Keells Group held 89.95 percent stake in Keells Food Products PLC as of September 30.