Carson Cumberbatch PLC had seen a sharp drop in group net profits during the nine months ended December 31, 2013 with earnings down 59% to Rs.2 billion from Rs.4.9 billion a year earlier although at company level both revenue and profits were up – revenue up 8% to Rs.695.1 million and the net profit up 18% to Rs.496.9 million.
Segmentally, the Carsons group’s portfolio and asset management business had boosted pre-tax profits 267% to Rs.1.08 billion during the nine months under review while its beverage business saw the pre-tax profit up 18% to Rs.1.4 billion.
Investment holdings were down 5% to Rs.197 million, oil palm plantations down 87% to Rs.948 million and leisure down 63% to Rs.36 million.
In the 9-month review of operations, Carsons said that the sharp drop in its group net profit was predominantly the result of increase in foreign exchange losses and drop in fair value gain of biological assets (oil palm plantations) year-on-year.
"Reported foreign exchange losses which was at Rs.4.6 billion for the period, surged 385% relative to that of the previous financial year, triggered by translation losses on US dollar denominated long term loans of the plantation sector," the review explained.
"Of the Rs.4.6 billion foreign exchange loss, Rs.0.5 billion was realized, resulting in a significant unrealized loss of Rs.4.17 billion which is a non-cash change since the underlying US dollar borrowings are naturally hedged against dollar earnings of the sector."
It explained that the other significant contributory non-cash item affecting the consolidated results - fair value gain of biological assets - had decreased by Rs.1.55 billion due to commodity price drop, plantation profile etc against the comparative period the previous year.
However, when comparing the adjusted group profitability for the first nine months of 2013 and the comparative period the previous year, the nine months had "proved to be a positive one for Carson Cumberbatch PLC with the adjusted profit before-tax improving by 9.75% year-on-year to settle at Rs.5.4 billion.’’
Investment holdings were down 5% to Rs.197 million, oil palm plantations down 87% to Rs.948 million and leisure down 63% to Rs.36 million.
In the 9-month review of operations, Carsons said that the sharp drop in its group net profit was predominantly the result of increase in foreign exchange losses and drop in fair value gain of biological assets (oil palm plantations) year-on-year.
"Reported foreign exchange losses which was at Rs.4.6 billion for the period, surged 385% relative to that of the previous financial year, triggered by translation losses on US dollar denominated long term loans of the plantation sector," the review explained.
"Of the Rs.4.6 billion foreign exchange loss, Rs.0.5 billion was realized, resulting in a significant unrealized loss of Rs.4.17 billion which is a non-cash change since the underlying US dollar borrowings are naturally hedged against dollar earnings of the sector."
It explained that the other significant contributory non-cash item affecting the consolidated results - fair value gain of biological assets - had decreased by Rs.1.55 billion due to commodity price drop, plantation profile etc against the comparative period the previous year.
However, when comparing the adjusted group profitability for the first nine months of 2013 and the comparative period the previous year, the nine months had "proved to be a positive one for Carson Cumberbatch PLC with the adjusted profit before-tax improving by 9.75% year-on-year to settle at Rs.5.4 billion.’’
The period under review had seen investment holdings continuing to lose – a loss of Rs.197 million against a loss of Rs.209 million a year earlier, oils and fats posting a loss of Rs.167 million against a loss of Rs.1.46 billion a year earlier while real estate saw profitability double to Rs.64 million and leisure saw the pre-tax profit down 63% to Rs.36 million.
Discussing segmental performance, the review said that its portfolio and asset management business had been affected by the announcement of a possible cutback in quantitative easing by the Federal Reserve signaling a sell off across global markets.
Although the ASPI had touched a high of 6,488 points during May last year, it had thereafter headed down though during the latter part of the year the market resurged with foreign buying coming in on selected stocks.
"Further, the continuous drop in yields in the alternate asset class on the fixed income side also attracted funds to equities at lower forward valuations," the review said.
The portfolio and asset management segment comprising Ceylon Guardian Investment Trust PLC and its subsidiaries reported a consolidated profit after-tax of Rs.1.02 billion for the nine months under review against a profit of Rs.274.2 million posted a year earlier.
The increase in profits was triggered by realized gains made during the period in view of market movements.
Oil palm crop production for the nine months was lower than the previous year due to biological factors and the drought which prevailed for the most part. However better crops were expected in the second half partly offsetting the crop deficit.
Carsons expected consumption of palm oil based products as likely to increase, thereby improving prospects for oil palm plantations. However, the possibility, of lower commodity price prices resulting from a stronger dollar remains a concern.
Favourable industry conditions and substantial re-engineering efforts undertaken in the oils and fats segments had enabled the losses to be slashed from Rs.1.42 billion to Rs.171.8 million during the period under review.
In the beverage segment, the pre-tax profit improved to Rs.1.4 billion from Rs.1.2 billion a year earlier while the leisure segment benefited from increased tourist arrivals although most of the star rated hotels continued to experience stagnant occupancy levels.
Discussing segmental performance, the review said that its portfolio and asset management business had been affected by the announcement of a possible cutback in quantitative easing by the Federal Reserve signaling a sell off across global markets.
Although the ASPI had touched a high of 6,488 points during May last year, it had thereafter headed down though during the latter part of the year the market resurged with foreign buying coming in on selected stocks.
"Further, the continuous drop in yields in the alternate asset class on the fixed income side also attracted funds to equities at lower forward valuations," the review said.
The portfolio and asset management segment comprising Ceylon Guardian Investment Trust PLC and its subsidiaries reported a consolidated profit after-tax of Rs.1.02 billion for the nine months under review against a profit of Rs.274.2 million posted a year earlier.
The increase in profits was triggered by realized gains made during the period in view of market movements.
Oil palm crop production for the nine months was lower than the previous year due to biological factors and the drought which prevailed for the most part. However better crops were expected in the second half partly offsetting the crop deficit.
Carsons expected consumption of palm oil based products as likely to increase, thereby improving prospects for oil palm plantations. However, the possibility, of lower commodity price prices resulting from a stronger dollar remains a concern.
Favourable industry conditions and substantial re-engineering efforts undertaken in the oils and fats segments had enabled the losses to be slashed from Rs.1.42 billion to Rs.171.8 million during the period under review.
In the beverage segment, the pre-tax profit improved to Rs.1.4 billion from Rs.1.2 billion a year earlier while the leisure segment benefited from increased tourist arrivals although most of the star rated hotels continued to experience stagnant occupancy levels.
This was mainly due to the emergence of unclassified accommodation offering more competitive prices than the star rated hotels.
Carsons has a stated capital of Rs.1.1 billion, a capital reserve of Rs.287.6 million and revenue reserves of Rs.7.83 billion. Total assets ran at Rs.10.9 billion and total liabilities at Rs.1.68 billion.
Bukit Darah PLC with 45.68% is the biggest shareholder of Carsons followed by Tower Investments (Pvt) Ltd. (10.66%), Fulcrum (Pvt) Ltd (9.79%) and Lake View Investments (Pvt) Ltd (8.79%). The EPF owns 2.61% of the company where the controlling interest is held by the Selvanathan family.
Carsons has a stated capital of Rs.1.1 billion, a capital reserve of Rs.287.6 million and revenue reserves of Rs.7.83 billion. Total assets ran at Rs.10.9 billion and total liabilities at Rs.1.68 billion.
Bukit Darah PLC with 45.68% is the biggest shareholder of Carsons followed by Tower Investments (Pvt) Ltd. (10.66%), Fulcrum (Pvt) Ltd (9.79%) and Lake View Investments (Pvt) Ltd (8.79%). The EPF owns 2.61% of the company where the controlling interest is held by the Selvanathan family.
The Carsons share traded at a high of Rs.459 and a low of Rs.340 during the nine months under review with net assets per share standing at Rs.47 for the company and Rs.153.52 for the group.
The directors of the company are: Messrs. Tilak de Zoysa (Chairman), H. Selvanathan(Deputy Chairman), M. Selvanathan, I. Paulraj, D.C.R. Gunawardena, S.K. Shah, P.C.P. Tissera, V.P. Malalasekera, M. Moonesinghe, E. Mohideen and R.Theagarajah.
www.island.lk
The directors of the company are: Messrs. Tilak de Zoysa (Chairman), H. Selvanathan(Deputy Chairman), M. Selvanathan, I. Paulraj, D.C.R. Gunawardena, S.K. Shah, P.C.P. Tissera, V.P. Malalasekera, M. Moonesinghe, E. Mohideen and R.Theagarajah.
www.island.lk
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