Sri Lanka’s Cargills profits surged in June quarter


July 30, 2015 (LBO) – Profits at Sri Lanka’s Cargills (Ceylon), with interests in retailing and fast moving consumer goods, jumped to 390.6 million rupees in the June quarter against a loss of 145 million rupees reported a year earlier, the interim accounts showed.

The group reported earnings of 1.74 rupees per share for the quarter against the 0.65 rupees of loss per share recorded last year.

Group sales rose 9.0 percent to 17.1 billion rupees in the three months from a year ago.

The company says revenue growth is attributed to the strong performance of retail and fast moving consumer goods businesses and improved consumer sentiment.

The group gross profit recorded a 31.8 percent growth to close at 1.8 billion rupees compared to the corresponding quarter of 2014 while operating profit has also increased by 68.3 percent to 796.4 million rupees.

The FMCG sector has returned a stable performance with a 24.6 percent growth in turnover ending at 3.0 billion rupees, Cargills Ceylon said.

“The double-digit growth reported by our agriculture and livestock processing businesses indicates category growth driven by our strong portfolio of national brands.”

The group’s retail sector sales grew 5.7 percent to 13.4 billion rupees in the quarter.

Cargills said the business continued to be challenged by the ‘deemed’ Value-Added-Tax imposed on VAT exempted products that are essential for daily nutrition and are sourced locally.

”Continuation of this arbitrary fiscal policy is contradictory to national efforts of encouraging local agriculture and production,”

“It has far reaching implications on smallholder farmers who have been empowered by the steady markets and guaranteed minimum prices bench-marked by the private supermarket industry.” Cargills further said.