Monday 13 July 2015

Lanka Century Group reverses losses this year

Lanka Century Investment (LCI) Group posted a net profit attributable to shareholders of Rs 33.9 million for the year ended March 31,2015.

This is despite a loss of Rs 663 million the previous year on a 9.4% gain in revenue to Rs 9.3 billion.

The Group also generated Rs 407 m in operating cash flow for the year versus Rs 124 million the previous year. Cash and short-term deposit balances as at March 31,2015 were Rs 902 million versus Rs 884 million the previous year.

During the year the Group divested all non-core activities to focus on manufacturing and exports in textiles, porcelain, and leather footwear.

In addition to the Group focusing its activities on core sectors, strategic changes were also made in operating companies to refocus on higher growth emerging markets, higher value addition, and product innovation to shift the group into higher value added manufacturing in each of these sectors.

To empower the implementation of these initiatives, the management teams in each of the operating companies have been significantly strengthened during the year.

In the textile sector, South Asia Textile Industries Lanka (Private) Limited delivered an outstanding performance generating a profit of Rs 379 million for the year versus Rs 109 million the previous year.

The company has embarked on a significant plant modernisation and capacity expansion programme which will further improve quality, on-time delivery, yields, energy efficiency, and enhance capacity in the future.

In the leather and footwear sector, Ceylon Leather Products PLC had a difficult year with weak and delayed orders in its core business of supplying boots to the state sector.

In addition, the collapse in European orders for high end women’s footwear at its subsidiary company had a significant impact on the sector’s performance. However, going forward the company is restructuring its operations to focus on higher value added products in higher growth emerging markets that are related to its core business of manufacturing high quality boots.

The porcelain sector had a 35% growth in revenue to Rs 2.3 billion driven largely by the acquisition of Royal Fernwood Porcelain (RFPL) by Dankotuwa Porcelain PLC .

The porcelain sector suffered a loss Rs 105 million largely on account of consolidating the activities of RFPL which was incurring losses. However, with the consolidation and integration of activities between DPL and RFPL, the porcelain sector now has a vastly expanded manufacturing capability and product range to offer domestic and international customers.

In addition to this, DPL has also engaged with a leading science and research institution to develop nano engineered materials which will lead to much higher value added porcelain products being manufactured by the company in the future.
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