June 06, 2013 (LBO) – Profits at Sri Lanka’s Cargills (Ceylon) Plc, fell 58 percent to 123 million rupees partly due to a retail tax and higher interest costs on new investments but the group said it was taking counter measures. Cargills reported earnings 55 cents per share for the quarter, in accounts filed with the Colombo Stock Exchange. In the year to March earnings were 2.58 rupees per share on total profits of 577 million rupees, which 46 percent.
The group which operates the island’s largest retail chain said it was hit by new valued added tax where it was not allowed to reclaim taxes on stocks purchased earlier.
“Despite the inadequate time provided to adjust to the new policy, the Retail team partly mitigated the adverse one-off impact of the policy change by curtailing inventory,” the group told shareholders.
“While the challenges in the external environment remain, ˜Cargills Food City™ is committed to maintaining its consistent ‘low price’ positioning across all categories and has not passed on the VAT to its customers.
In the March 2013 quarter group revenues rose 2.53 percent, cost of sales rose 1.71 percent and the firm grew gross profits at a faster 9.33 percent. Other direct income also r