June 3, 2015 (LBO) – Sri Lanka’s Ceylon Cold Stores says that the growth potential for carbonated soft drinks may be limited due to growing health concerns of consumers, even though there has been an increase in disposable income.
“I am confident that the increase in disposable income witnessed in the last quarter will act as a catalyst for greater demand of our frozen confectionery products whilst the growth potential for carbonated soft drinks may be constrained to an extent in the medium to long term due to a growing segment of health conscious consumers,” Susantha Ratnayake, Chairman of Ceylon Cold Stores said.
The company’s beverage range was extended during the year by introducing a fruit flavour based green tea with minimal carbonation under the “twistee” sub brand, to cater the growing demand.
“These new additions to the portfolio aim to cater to the emerging trend for lifestyle Beverages in tandem with the global movement towards healthier lifestyle choices,” Ratnayake said.
“Research and Development initiatives are ongoing to facilitate the use of natural flavours and colours when re-inventing existing products and introducing new products to the market.”
The Company posted revenues of 9,768 million rupees in the year ended March 2015, representing a growth of 10 per cent over the previous financial year.
The recurring profit increased by 53 per cent during the same period where the previous years’ results included a one off gain of 366 million rupees on lease rights foregone and a gain of 72 million rupees on change in the fair value of investment property.
After excluding the aforementioned impacts, the profit after tax for the year increased by 43 per cent.
“The domestic Carbonated Soft Drinks (CSD) market remained sluggish for a good part of the year, with consumers typically spending less in the first few months of the year,” the company said.
“However, the final quarter offered some respite following an upswing in consumer spending which edged up industry growth culminating in an expansion of 3 percent.”