No dividend recommended as earnings plunge
Lanka Milk Foods PLC (LMF) has seen a sharp downturn in profitability both at group and company levels in the year ended March 31, 2014 with the group attributable profit slumping 83.71% to Rs.61.1 million from Rs.374.9 million the previous year while the company saw its profit plunge 81% to Rs.44 million from the previous year’s Rs.231.2 million.
LMF Chairman Harry Jayawardena has said in the company’s annual report that although overall country economic indicators have improved during the year, "the milk powder sector continued to face challenging conditions."
Lakspray generates 44.27% of the group’s turnover followed by Ambewela (17.33%), yoghurt (12.99%) and fresh milk (6.95%),
Jayawardena expressed the hope that the government and the Consumer Affairs Authority will take a well informed decision to allow price increases in line with rising global prices of powdered milk in order to ensure a level playing field in the industry.
Jayawardena’s daughter, Ms. D.S.C. Jayawardena also said as much in the annual report stating:
"The profitability of the powdered milk arm suffered during the year due to the refusal by the Consumer Affairs Authority to allow companies engaged in the marketing and distribution of powdered milk to hike their prices in keeping with the global price rise in the rates of powdered milk."
"This ongoing and unfavourable status quo for the last two years is eroding the profitability of the powdered milk business in the country and gives rise to an urgent need for the renewed appraisal of price structures," she said.
Although LMF had made several representations to the concerned authorities to consider the plight of powdered milk companies, no positive response has been forthcoming so far.
LMF which owns 12% of the Distilleries Company of Sri Lanka, one of the country’s strongest listed corporates, has recommended no dividend for the year under review.
Mr. Harry Jayawardena said that LMF has sustained market leadership in several segments of the dairy industry through accelerated innovation and meaningful engagement with consumers.
"We are confident that our strong management systems and newly improved operational processes will combine to deliver much strong profitability in the upcoming financial year," he said.
The company which is into milk production running a herd of over 2,000 cattle in its dairy farms had injected Rs.875 million into its subsidiary, Lanka Dairies (Pvt) Limited to expand production capacity from 2,650 litres per hour to 8,500 litres per hour. New state of the art machinery enabled them to supply milk in the latest screw cap in one-litre slim packs in keeping with international standards.
Ms. Jayawardena said that the demand for fresh milk had reached a peak during the year enabling LMF to function at optimum capacity with the demand for fresh milk outstripping supply at the end of the period under review.
Ambewela Yoghurt had delivered a strong performance during the year with the Ambewela products boosting turnover Rs.847 million from Rs.683 million the previous year. Lanka Dairies earned revenue of Rs.1.2 billion during the year, up from Rs.1.08 billion the previous year.
"Ambewela products and Lanka Dairies were the two best performing companies in the Lanka Milk Foods Group in the period under review. Meanwhile, Lanka Milk Foods (CWE) PLC earned revenue of Rs.2,446 million during 2013/14 and posted a gross profit of Rs.171 million during the same period," she said.
She further reported that the upsurge in demand for fresh milk has accelerated their expansion plans in order to expand capacity further to meet the higher demand.
LMF has a stated capital of Rs.999.95 million, a capital reserve of Rs.105.1 million, an available for sale reserve of Rs.7.47 billion and revenue reserves of Rs.1.4 billion in its books.
Total assets ran at Rs.11.6 billion and total liabilities at Rs.1.6 billion.
Millford Exports (Ceylon) Limited with 33.57%, Mills Enterprises Limited with 15.3% and Melstacorp (Pvt) Limited with 14.87% are the biggest shareholders of the company.
Net assets per share had grown to Rs.247.08 from Rs.212.93 the precious year while the share closed for the year at Rs.107.10, down from Rs.108.30 the previous year.
The directors of the company are: Messrs. D.H.S. Jayawardena (Chairman), R.K. Obeyesekere, Zaki Alif, Mr. C.R. Jansz, Ms. D.S.C. Jayawardena, D.S.K. Amarasekera and Dr. A. Shakthevale.
www.island.lk
Lanka Milk Foods PLC (LMF) has seen a sharp downturn in profitability both at group and company levels in the year ended March 31, 2014 with the group attributable profit slumping 83.71% to Rs.61.1 million from Rs.374.9 million the previous year while the company saw its profit plunge 81% to Rs.44 million from the previous year’s Rs.231.2 million.
LMF Chairman Harry Jayawardena has said in the company’s annual report that although overall country economic indicators have improved during the year, "the milk powder sector continued to face challenging conditions."
Lakspray generates 44.27% of the group’s turnover followed by Ambewela (17.33%), yoghurt (12.99%) and fresh milk (6.95%),
Jayawardena expressed the hope that the government and the Consumer Affairs Authority will take a well informed decision to allow price increases in line with rising global prices of powdered milk in order to ensure a level playing field in the industry.
Jayawardena’s daughter, Ms. D.S.C. Jayawardena also said as much in the annual report stating:
"The profitability of the powdered milk arm suffered during the year due to the refusal by the Consumer Affairs Authority to allow companies engaged in the marketing and distribution of powdered milk to hike their prices in keeping with the global price rise in the rates of powdered milk."
"This ongoing and unfavourable status quo for the last two years is eroding the profitability of the powdered milk business in the country and gives rise to an urgent need for the renewed appraisal of price structures," she said.
Although LMF had made several representations to the concerned authorities to consider the plight of powdered milk companies, no positive response has been forthcoming so far.
LMF which owns 12% of the Distilleries Company of Sri Lanka, one of the country’s strongest listed corporates, has recommended no dividend for the year under review.
Mr. Harry Jayawardena said that LMF has sustained market leadership in several segments of the dairy industry through accelerated innovation and meaningful engagement with consumers.
"We are confident that our strong management systems and newly improved operational processes will combine to deliver much strong profitability in the upcoming financial year," he said.
The company which is into milk production running a herd of over 2,000 cattle in its dairy farms had injected Rs.875 million into its subsidiary, Lanka Dairies (Pvt) Limited to expand production capacity from 2,650 litres per hour to 8,500 litres per hour. New state of the art machinery enabled them to supply milk in the latest screw cap in one-litre slim packs in keeping with international standards.
Ms. Jayawardena said that the demand for fresh milk had reached a peak during the year enabling LMF to function at optimum capacity with the demand for fresh milk outstripping supply at the end of the period under review.
Ambewela Yoghurt had delivered a strong performance during the year with the Ambewela products boosting turnover Rs.847 million from Rs.683 million the previous year. Lanka Dairies earned revenue of Rs.1.2 billion during the year, up from Rs.1.08 billion the previous year.
"Ambewela products and Lanka Dairies were the two best performing companies in the Lanka Milk Foods Group in the period under review. Meanwhile, Lanka Milk Foods (CWE) PLC earned revenue of Rs.2,446 million during 2013/14 and posted a gross profit of Rs.171 million during the same period," she said.
She further reported that the upsurge in demand for fresh milk has accelerated their expansion plans in order to expand capacity further to meet the higher demand.
LMF has a stated capital of Rs.999.95 million, a capital reserve of Rs.105.1 million, an available for sale reserve of Rs.7.47 billion and revenue reserves of Rs.1.4 billion in its books.
Total assets ran at Rs.11.6 billion and total liabilities at Rs.1.6 billion.
Millford Exports (Ceylon) Limited with 33.57%, Mills Enterprises Limited with 15.3% and Melstacorp (Pvt) Limited with 14.87% are the biggest shareholders of the company.
Net assets per share had grown to Rs.247.08 from Rs.212.93 the precious year while the share closed for the year at Rs.107.10, down from Rs.108.30 the previous year.
The directors of the company are: Messrs. D.H.S. Jayawardena (Chairman), R.K. Obeyesekere, Zaki Alif, Mr. C.R. Jansz, Ms. D.S.C. Jayawardena, D.S.K. Amarasekera and Dr. A. Shakthevale.
www.island.lk
No comments:
Post a Comment