Sri Lanka’s Melstacorp Plc records 50 percent increase in profits in June 2019 quarter
Interim accounts of Sri Lanka’s Melstacorp Plc have reportedly recorded a 50 percent increase in profits from a year earlier to Rs. 1.2 billion in the June 2019 quarter from a year ago due to a sharp decrease in distribution costs and other expenses.
The diversified holdings company has reportedly reported earnings of Rs. 1.02 a share in the quarter.
Melstacorp was trading a rupee up at Rs. 45.00 a share last Friday (16).
During the quarter, net revenue grew 11.84 percent from a year earlier to Rs. 23 billion, cost of sales grew 15.25 percent to Rs. 15 billion leading to a narrow 5.83 percent rise in gross profits to Rs. 7.9 billion, local media reports stated.
Report further stated that other operating income had gained 39.71 percent to Rs. 370 million.
Distribution costs have fallen 25.93 percent to Rs. 370 million and other operating expenses have declined 50.36 percent to Rs. 11.9 million.
Net finance cost has risen 55 percent to Rs. 884 million.
Losses from valuation of financial assets have grown 102.05 percent to nearly Rs. 3 billion.
Meanwhile, the beverages segment which includes listed Distilleries Company of Sri Lanka have reported a 77.5 percent growth in profits from a year earlier to Rs. 2.9 billion in the June quarter with a marginal revenue growth of 3.2 percent to Rs. 21 billion.
Plantations had reported a Rs. 116 million loss in the quarter, down 189 percent from a profit of Rs. 40 million a year earlier, reports have further noted.
Losses from telecommunications which includes voice and broadband services provider Lanka Bell have fallen 14 percent from a year earlier to Rs. 372 million with revenue declining marginally 7 percent to Rs. 708 million.
Profits from financial services, which include Continental Insurance, have grown 25.5 percent to Rs. 110 million as revenues surged 90 percent from a year earlier to Rs. 1.4 billion.
Earnings from diversified businesses have fallen 88.8 percent to Rs. 68 million with a marginal increase in revenue to Rs. 12.8 billion in the quarter from Rs. 10.9 billion a year earlier.
OSL take:
The increase in profits in this June quarter recorded by Sri Lanka’s Melstacorp Plc is indicative of the growth and strength of the country’s private sector. It is also testament of the country’s business conducive environment. Sri Lanka’s geographical positioning in the Indian Ocean, the ease of doing business environment and the many trade agreements as well as the trade concessions enjoyed by the country makes the island an attractive business destination in the South Asian region. Also, foreign businesses/investors could look at forming partnerships/joint ventures with local companies and use Sri Lanka’s trade agreements to expand in to foreign markets.
| Article Code : | VBS/AT/20082019/Z_3 |