Melstacorp records Rs. 8.9 bn PAT for 2018-19

Harry-Jayawardena

Aug 16, 2019 (LBO) – The Melstacorp group’s profit after tax for the financial year 2018-19 was 8.9 billion rupees compared to the previous year’s figure of 6.2 billion rupees, up by 41 percent.

Group turnover reached 156 billion rupees and the group contributed 64 billion rupees as taxes during the same financial year. Melstacorp has a market capitalization of 51 billion rupees.

For the period under review, the beverage sector revenue reached Rs. 87 billion and the net profit after tax was Rs. 5.8 billion. The company has noted a substantial decrease in alcohol volume during the year. Tax contribution by the sector to the State was reduced. Periceyl, the second liquor company of the Group saw its profitability shrinks when compared with last year due to a notable decline in volumes.

Lanka Bell, a subsidiary recorded a positive EBITDA during the year. The sector lost Rs. 2 billion for the financial year. Chairman, D. H. S. Jayawardena said in the annual report, “We continue to look at the most desirable options to exit this industry.”

Another subsidiary, Continental Insurance recorded a 26 percent year-on-year increase in gross written premium. The Company recorded a gross written premium of Rs. 4 billion during the year.

Jayawardena said in his statement, “With the Group holding exceeding 50%, Aitken Spence PLC which had been an associate of the Group since 1990s, completed its first full year as a subsidiary of Melstacorp. Aitken Spence is one of Sri Lanka’s geographically most diversified conglomerates deriving 43% of its profits from overseas operations with a presence in eight countries in the tourism and maritime and logistics sectors. Overseas assets represent 35% of total assets of the Aitken Spence Group. Bogo Power, which was commissioned in December 2011 has been profitable since the commencement of operations.”

In the plantation sector the company has invested over Rs. 500 million on capital expenditure for field development, upgrading the factories and machinery, buildings, agricultural vehicles, replanting and crop diversification during the year under review. The annual report notes ‘Although the plantation sector has been reporting losses, we continue to support and finance operations with the expectation of a turnaround of the plantation in the interest of the industry and the nation.’

In October 2018 Fitch Ratings rated Melstacorp a National Long-Term Rating of “AAA (lka)” with a Stable Outlook. Fitch has also placed the subsidiary Distilleries Corporation a National Long-Term Rating of “AAA (lka)” with a Stable Outlook. Note 26 Cash and Cash Equivalents of the report states that at group level the favorable balances classified under current assets total Rs 10.7 billion (Rs 11.7 billion 2018) and at group level unfavorable balances classified under current liabilities total Rs 35.6 billion (Rs 18.5 billion 2018).