Wednesday 14 February 2018

Sri Lanka's Richard Pieris December profits edge down

ECONOMYNEXT - Sri Lanka's Richard Pieris and Company saw profits fall 4 percent in the December 2017 quarter to 809.8 million rupees as margins fell on plastics and rubber exports, despite strong plantations performance and gains in financial services. .

Earnings in the quarter were 40 cents a share. In the nine months to December earnings were 1.13 rupees a share on total profits of 2.3 billion rupees, flat from a year earlier, interim accounts filed with the stock exchange showed.

Richard Pieris shares closed 10 cents lower on Monday at 13 rupees.

Revenue in the quarter grew 7 percent to 13.6 billion rupees, cost of sales increased 9 percent to 10.2 billion rupees, leading to flat growth in gross profits to 3.4 billion rupees.

Administrative expenses at 1.5 billion rupees and distribution costs at 788.7 million rupees were flat from a year earlier.

The group reported a gain of 30 million rupees from the sale of financial assets in the quarter, compared to a 2 billion rupee loss a year earlier.

It also transferred 34.5 million rupees of financial assets available for sale to the life fund of Arpico Insurance, a subsidiary.

Revenue from retail grew 7 percent to 20 billion rupees in the nine months to December and profits grew 9 percent to 1.4 billion rupees, but the company did not disclose reasons for the gain.

The company operates a chain of over 60 retail stores across the island, including 21 hypermarkets under the Arpico brand and 17 showrooms for its plastics, rubber and furniture products.

Plantations revenues grew 24 percent from a year earlier to 7.8 billion rupees, profits surged 180 percent to 1.2 billion rupees.

The company has 54 estates covering 32,097 hectares in tea, rubber, palm oil, coconut and spices like cinnamon.

Rubber revenues grew 9 percent to 3.6 billion rupees and profits declined 4 percent to 622 million rupees.

In this segment the company exports a range of rubber products, including mattresses and soles for high end footwear brands to over 40 countries including the US, EU and India. In the previous financial year the company began exporting to China, Vietnam and Bangladesh.

Revenues from tyres, which includes rethreading and dealerships of Indian and South Korean brands, grew 6 percent to 3.4 billion rupees, but profits fell 38 percent to 286 million rupees.

Revenue from plastic ware and furniture fell 6 percent to 5.6 billion rupees and profits halved from a year earlier to 410 million rupees.

Revenue from financial services grew 27 percent to 2.4 billion rupees and profits grew 35 percent to 345 million rupees. The segment includes Richard Pieris Finance, Richard Pieris Securities and Arpico Insurance.

Revenue from a segment classified others fell 4 percent to 1.9 billion rupees, profits falling 10 percent to 904 million rupees. The segment includes IT services and the central commercial unit of the group.

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