Cargills 1Q12 group revenue, PAT up
http://www.sundaytimes.lk/110821/BusinessTimes/bt10.html
Sri Lankan food and retail conglomerate Cargills recently reported a group revenue of Rs. 11.2 billion, up 25% year-on-year, and a profit after tax (PAT) of Rs. 330 million, a 6% year-on-year increase, for the three months to end-June 2011, the first quarter (Q1) of its 2011/2012. This was also said to include a “pre-operating cost of approximately Rs. 100 million excluding the interest cost incurred to fund new investments during the last two quarters of the previous financial year.”
Additionally, according to Managing Director Abdul Wahid, the company revealed that it had “now fully revamped its biscuit facility and re-engineered the product range which would be launched during the upcoming quarter.”
Further noted by Mr. Wahid, “‘Cargills Food City’, Sri Lanka’s No 1 modern retail chain continued to maintain a steady growth in transactions and volume while consolidating its position in the industry with the opening of its 4th outlet in the Northern region in Kilinochchi, taking the total number of stores to 164. The retail sector invested Rs. 250 million to increase it’s modern trade footprint during the quarter.”
He also added that “FMCG brands comprising, Magic, Kist, Finest, Sams, Goldi and newly acquired Kotmale , reported volume growth in excess of 20%… Millers Brewery Limited, the new investment, commenced limited production during the 1st quarter and market acceptance of the renowned ‘3 Coins’ brand indicates a promising off take. Aggressive expansion has been planned for the brewery.”
In addition, capital expenditure in terms of additions of property, plant and equipment for Q1 2011/2012 was shown to have more than doubled, to Rs. 491 million, compared to the corresponding period the year before. While a segmental analysis highlighted the fact that revenues in food and beverages, wholesale distribution and leisure businesses all grew year-on-year by 25%, 12% and 7%, respectively, with photo processing being the only segment to fall, by 29% year-on-year. At the same time, segment related profitability dropped for all businesses except the food and beverages unit which witnessed of 25% year-on-year growth in the “Segmental profit before unallocated overheads” line item.
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Carson to replace ‘long haul’ Carlsberg JV in India with more Lion exports
http://www.sundaytimes.lk/110612/BusinessTimes/bt30.html
Sri Lankan diversified multinational Carson Cumberbatch has signalled that it may opt out of the Indian brewery market where it has a 22.5% stake in the Indian joint venture with Carlsberg to focus more on the domestic market as well as exports to India by Lion.
According to comments in the group’s Financial Year 2011 annual report by its Chairman Tilak De Zoysa, who indicated that faced with a choice between more investment in the “long haul” Indian market, or the “fairly lucrative” local market, the “likely” option would be a sell out of its Indian stake to Carlsberg.
Mr. De Zoysa also revealed that the company had just concluded a 30% expansion to its capacity which saw the total volume brewed during 2010-2011 to 80 million litres, in response to increased domestic demand which he identified as arising from “new regional markets, higher disposable incomes, growth in tourism and a conducive environment for entertainment events.” In total, this segment had witnessed a 61% year-on-year growth to Rs. 1.0 billion in PAT.
Additional comments by Mr. De Zoysa also hinted at a possible shift in the strategy of Carson’s plantation business, especially considering a recent US$ 36 million acquisition of a palm oil processing facility and speciality fats manufacturing unit based in Malaysia with production facilities in India. He noted that the “Indian market in particular, will offer vast growth opportunities due to its population, growing incomes and better lifestyles. This acquisition compensates the sector’s risk exposure to the vagaries of the commodity business by opening up a market with more predictable demand supply conditions and greater price stability.
The speciality fats production units in Malaysia and India supply the bulk of their produce as input into the processed food industry and thus move our plantation business closer to the value added consumer end of the industry. Meanwhile, our upstream expansion continues to grow with hectarage increasing to 97,823 ha, helping us secure further economies of scale leading to lower unit costs. Scaling up of operations has also secured us the opportunity to further mitigate our cost structures by having our own logistics and supply chain arrangements, R&D facilities, bulk buying economies, which would otherwise have not been possible with a smaller scale of operations.” This business had shown a 83% year-on-year growth to Rs. 6.7 billion in PAT.
Attributing the successes of Carson’s investment arm to what he called the “superlative performance of the Colombo Stock Exchange for the second year running,” Mr. De Zoysa indicated that the group had increased its “discretionary portfolio within the investment sector to Rs. 15 billion,” a situation he attributed to “[branching] out into several business segments that complemented its original focus on managing a listed portfolio.”
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