Keells Food Products Dec. quarter earnings dips 21%

The market leader in processed foods, Keells Food Products PLC (KFP), reported earnings of Rs.3.03 per share or Rs.77.1 million, down 21 percent from a year ago as the revenues fell during the festive December quarter, where strong sales are generally recorded.  
According to the interim results filed with the Colombo Stock Exchange, the John Keells group subsidiary saw its revenues falling by 5.0 percent year-on-year (YoY) to Rs.796.1 million. 
For the nine months ended December 31, the company made an earning of Rs.8.90 a share or Rs.226.9 million, 14 percent lower from the same period last year.  The revenue rose by only 1 percent YoY to Rs.2.33 billion.  Generally there is a positive co-relation between the company’s performance and relatively higher disposable incomes, higher tourist arrivals and festivities, but the December quarter performance appears to have defied them all. 

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 the company reaches the in-home consumers through modern and general trade channels, hotels restaurants and catering establishments (HORECA) constitute the company’s largest 
customer segment. 
The main product category of the company, sausages, accounts for nearly 50 percent of the overall volumes.  Meanwhile, the company’s segmental results showed that both manufacturing and trading businesses have suffered setbacks in revenues and profits during the quarter.  As of December 31, 2016 John Keells Holdings PLC and John Keells PLC held 74.94 percent and 10.09 percent stake in KFP, respectively.