Sun, 03 Jul 2022 Today's Paper

Higher disposable income, festive demand drive Keells Food 3Q profits

20 January 2016 03:24 am - 0     - {{hitsCtrl.values.hits}}

A A A

The market leader in processed foods, Keells Food Products PLC (KFP) saw its net profit for the quarter ended December 31, 2015 (3Q16) rising 7 percent to Rs.98 million over the corresponding period last year, the interim results released to the Colombo Stock Exchange showed. 

The earnings per share (EPS) improved to Rs.3.85 from Rs.3.58. 

The performance was largely driven by higher disposable incomes coupled with the festive demand seen during December. 

Apart from them, increased tourist arrivals, new product developments which secured revenue flows, increased efficiencies and stringent cost controls too had contributed to better performance, stock brokerage SC Securities wrote in a post-earnings release of KFP.  

KFP, a John Keells group subsidiary saw its revenue increasing 17 percent year-on-year (yoy) to Rs.842. 3 million while the cost of sales rose by a similar percentage to Rs.596. 2 million, resulting in a gross profit of Rs.246.1 million, up 15 percent yoy. 

This increase in cost of sales has largely been due to the increase in pork and chicken prices during the past reported quarter. 

Further, KFP had ramped up production in October and November, targeting the months of December and January since the company generally identifies the month of January as a peak period for sales, SC Securities said. 

Despite the expected slow-down in consumption demand, the company expects continued, improved demand conditions going forward. Meanwhile, the distribution expenses during the quarter under review rose 21 percent yoy to Rs.67.2 million. KFP has increased its cost allocation on advertising and promotional activities as well as the increased freezer truck hire chargers due to the increased number of deliveries. Sri Lanka’s per capita consumption of sausages, meatballs, slices and crumbed items are relatively low compared to regional markets and thus the company has been spending on building awareness and market development campaigns.   

While KFP reaches the domestic consumers through modern and general trade channels, hotels restaurants and catering establishments (HORECA) constitute its largest customer segment. The main product category of the company—sausages— accounts for nearly 50 percent of the overall volumes.l Meanwhile, administrative expenses rose 17 percent yoy to Rs.33.9 million while other operating expenses rose 33 percent yoy to Rs.20.9 million during the quarter under review.  

The company has paid a bonus for the month of December. Further, the depreciation expenses have increased 06.0 percent yoy to reach Rs.2 million. 
Company’s operating profits rose 9 percent yoy to Rs.124.7 million. Notably, finance costs fell 24 percent yoy to Rs.3.2 million mainly due to the reduction in borrowing costs and the reduction in interest bearing borrowings. During the 9 months to December 31, 2015, the interest bearing borrowings of the company dropped 28 percent to Rs.96.3 million. Finance income rose by 56 percent yoy to Rs. 4.6 billion. 

For the 9-months ended December 31, 2015, the company increased its net profit 45 percent yoy to Rs.264 million with an EPS of Rs.10.36. 

The revenue rose 19 percent yoy to Rs.2.3 billion while the gross profit rose 24 percent yoy to Rs. 683.4 million.  The segmental results showed the manufacturing segment posting a profit before tax (PBT) of Rs.113.9 million, up 8.5 percent. During 3Q16, the manufacturing segment has witnessed a sales volume growth of 16-17 percent. The trading segment’s PBT rose to 12.2 million from Rs.8.5 million during the same period last year. In the trading sector, the company has observed increased demand for French fries, which are imported and sold, as well as the raw meat sold during 3Q16.

As of December 31, 2015, John Keells Holdings PLC and John Keells PLC held 74.94 percent and 10.09 percent stake in KFP, respectively. However the public held only 8.38 percent, below the 20 percent requirement by the regulator’s minimum listing rules for a Main Board listed company. 
 
Order Gifts to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Vegetables, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

Sell your vehicle & house fast with hitad.lk only cost is Rs.400, Advertise in Hitad.lk for free to sell your mobile phone. Want to sell your Pet, Advertise for Free in hitad.lk Search for Houses in Sri Lanka and find the best place through Hitad.lk find your best tuition place. Find the best partner for you, visit hitad.lk Find anything at any time hitad.lk.

  Comments - 0

Order Gifts to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Vegetables, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

 

Sell your vehicle & house fast with hitad.lk only cost is Rs.400, Advertise in Hitad.lk for free to sell your mobile phone. Want to sell your Pet, Advertise for Free in hitad.lk Search for Houses in Sri Lanka and find the best place through Hitad.lk find your best tuition place. Find the best partner for you, visit hitad.lk Find anything at any time hitad.lk.


Add comment

Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Reply To:

Name - Reply Comment




Order Gifts to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Vegetables, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

 

Sell your vehicle & house fast with hitad.lk only cost is Rs.400, Advertise in Hitad.lk for free to sell your mobile phone. Want to sell your Pet, Advertise for Free in hitad.lk Search for Houses in Sri Lanka and find the best place through Hitad.lk find your best tuition place. Find the best partner for you, visit hitad.lk Find anything at any time hitad.lk.