May 22, 2012 (LBO) – Sri Lanka’s Nestle Lanka Plc, a unit of a Swiss food firm said profits in the March 2012 quarter fell 25 percent to 461 million rupees as the firm was hit by higher energy prices and currency depreciation. Nestle Lanka reported earnings of 8.60 rupees per share for the quarter. The stock fell 5.60 to close at 1,179 on Tuesday.
The firm said revenues rose 13.9 percent to 7.32 billion rupees, expenses kept pace, rising 13.95 percent to 4.87 billion rupees and gross profits rose 14 percent to 2.45 billion rupees.
But the firm had to spend another 250 million rupees on foreign exchange purchases. It also lost 50 million rupees on foreign currency borrowings.
Energy prices were also hiked in the first quarter.
“2012 is turning out to be a testing year,” Alois Hofbauer, managing director of NestlÃ© Lanka Plc, said in a statement.
“We are operating in an even more difficult environment than the year before and are facing multiple challenges.”
Sri Lanka’s rupee fell from 110 to around 130 in the first quarter after credit taken by state utilities to manipulate energy prices put pressure on Sri Lanka’s dollar peg.
Currency depreciation in addition to pushing up costs, will also