Sri Lanka’s Nestlé unit net up 10-pct in March 2016 quarter

May 06, 2016 (LBO) – Nestlé Lanka, a unit of a Swiss-based food group, said net profits rose 10 percent to 1.27 billion rupees in the March 2016 quarter from a year earlier.

The firm reported earnings of 23.74 rupees per share for the quarter against 21.56 rupees reported a year earlier. The stock closed at 2,110 rupees per share on Thursday.

Revenues rose 9 percent to 9.76 billion rupees in the March quarter, and cost of sales rose at a slower 4 percent to 5.97 billion rupees, while gross margins grew 18 percent to 3.78 billion rupees.

Marketing, selling and distribution expenses rose 34 percent to 1.60 billion rupees while administrative expenses rose marginally 1 percent to 529 million rupees in the quarter.

In arriving at the net profit, the company has used 28 percent as the tax rate, as the new rate of 17.5 percent proposed by 2016 budget has not yet enacted.

The company has netted off some trade related expenses (Rs323mn in Q1 2016) from revenue which were earlier reported as part of Marketing, selling and distribution expenses.

Nestlé Lanka currently has a public shareholding of 9.18 percent with 5,381 public shareholders. Market capitalization of the public holding is 10.0 billion rupees.