Sri Lanka’s Cargills (Ceylon) net down 24-pct

Aug 20, 2012 (LBO) – Profits of Sri Lanka’s Cargills (Ceylon) Plc, which interests in retailing and fast moving consumer goods fell 24 percent to 245 million rupees, as higher interest costs bit into the bottom line, interim accounts showed.

The group reported earnings of 1.10 rupees for the quarter.

Revenues rose 25 percent to 14.1 billion rupees and cost of sales rose 25 percent to 12.6 billion rupees but the firm also managed to grow gross profits 26 percent to 1.46 billion rupees.

But interest costs rose 115 percent to 274 million rupees. The group reported current borrowings of 8.7 billion rupees.

Cargills said newly acquired businesses are “yet to realize their expected potential.”

Cargills bought into confectionary and beer businesses when interest rates in Sri Lanka were low.

The firm said major investments were planned for the newly acquired units.

Cargills runs Sri Lanka’s largest retail chain and holds the franchise for KFC in Sri Lanka.

The group would continue to expand the retail chain and KFC outlets with ‘utmost confidence’ the firm told shareholders.

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