Sri Lanka’s Lankem records impressive performance despite pandemic
Lankem Ceylon PLC of Sri Lanka has reportedly posted a strong Q4 performance for the FY 2020/21 recording a Pre-Tax Profit of Rs. 229 million against a loss of Rs. 185 million reported in 2019-20.
The company had achieved quarterly revenue of Rs. 1billion recording a growth of 78% in comparison to the same period as last year.
According to reports, these results were achieved amidst the Covid-19 pandemic that disrupted markets, including global supply chains, resulting in organisations having to change their strategies putting a huge strain on operating models.
Despite these challenges, the company has been able to change their strategies accordingly ensuring the right product mix was available at the right time to meet seasonal demand and as a result, Paint and the Crop Protection divisions of the Company had met and delivered exceptional performance in meeting seasonal demands, local media reports stated.
“The company closed the financial year on a high, achieving a revenue of Rs.3.4 billion in comparison to Rs.2.9 billion achieved in the previous year, recording a growth of 18%,” Lankem Ceylon Managing Director Suren Goonawardene has been quoted as saying.
“The Gross Profit of Rs. 827 million is an increase by 46% compared to 2019/20. The improvement in margin is a result of optimising the sales mix in addition to the stringent cost management initiatives that were implemented by restructuring the operation at our manufacturing plants.
“This has resulted in a drastic reduction of operational losses while the ongoing business restructuring has greatly supported company performance. In challenging times it was imperative that the operation be able to have an agile structure to be able to not just survive but compete. This resulted in the EBIT of the company closing at Rs. 521 million against Rs. 66 million reported in 2019-20.”
The reduction of interest rates has immensely contributed towards improved liquidity, mainly due to the accommodative monetary policy introduced by the Central Bank of Sri Lanka to support the revival of economic activity.
Goonawardene has further stated, “For the first time after FY 2014/15 the company has reported a Profit Before Tax of 36 million signalling a positive momentum for the future of the company. This turnaround of performance is primarily attributable to the dedicated team members of the company who relentlessly performed amidst tough market conditions.
“The standard of expectation from every individual member has been set at a very high level, and it is positive to note that each member across all departments raised to the occasion to contribute in their own domain to achieve overall goals set by the company.”
Lankem Ceylon as a Group which comprises hospitality, packaging and distribution clusters has reportedly posted a revenue of Rs. 17.6 billion recording a growth of 14% against the previous FY with better than expected results reported from the distribution sector. In addition, SunAgro Lifescience Ltd., a fully owned subsidiary of Lankem which also specialises in high end products used in Crop Protection market has further reported an impressive performance contributing Rs. 92 million to the bottom line of the group.
OSL take:
Many Sri Lankan private sector companies have recorded impressive growth rates despite facing challenges of the global Covid 19 pandemic. Sri Lanka’s ongoing development programme and the improvements in the ease of doing business environment have further strengthened the country’s economy as well as businesses. Sri Lanka is also fast becoming a business hub in the South Asian region given it’s geographical positioning in the Indian ocean and the many trade agreements as well as trade concessions enjoyed by the country. All these have expanded business/investment opportunities in Sri Lanka.
| Article Code : | VBS/AT/20210614/Z_4 |