No dividend from Carson’s after difficult year, but company upbeat for future

Four Malaysian and Indonesian plantations sold, refining in India stopped

Carson Cumberbatch PLC, regarded as one of the country’s most successful and widely respected conglomerates quoted on the Colombo Stock Exchange with a presence in the South East Asian region has closed the financial year ended March 31, 2017, without being able to pay its shareholders any dividend.

The group which entered the plantation sector with rubber over 100 years ago has interests in many diverse sectors including oil palm plantations in Indonesia, oils and fats (in Malaysia and India), beverages, portfolio and asset management, real estate and leisure.

According to the recently released annual report, the Carsons Group saw revenue dip 16% to Rs. 64.5 billion while the profit attributable to shareholders grew 57% to Rs. 1.29 billion. But there was a loss after tax of Rs. 1.46 billion from continuing operations, down 174% from a profit of Rs. 1.99 billion a year earlier.

The bottom line included a gain of Rs. 5.2 billion from the disposal of certain Malaysian and Indonesian plantations belonging to the group.

Net assets per ordinary share had grown a marginal 1% to Rs. 159.01 while the market value of the share had declined 40% to Rs. 163 from Rs. 270 the previous year.

The group carried net assets of Rs. 59.45 billion, up 2% from Rs. 58.29 billion a year earlier in its books.

‘There have been challenges along the way, but the company looks to the future with confidence, trusting that the excellence of its people and the strategic strength of its plans will serve to overcome challenges and deliver exceptional results and returns to its many stakeholders," the report said.

It says "we are not short term opportunists; we focus on strategic objectives and we build compliant businesses." Their vision is to become a regional holding company and given the opportunities existing within the rapidly developing economies of the region, they believe that their horizons in all their core businesses should extend to South and South East Asia with Sri Lanka remaining their priority.

With 69,000 hectares of oil palm planted in Indonesia and a total land bank of 139,000 hectares, palm oil is a core business of the group. It entered Indonesia in 1996 by setting up a company, PT Agro Indomas in Central Kalimantan with a land bank of 12,000 hectares. Their second plantation in Indonesia, PT Agro Bukit, commenced development in 2005 and since then they’ve expanded to 69,000 hectares.

Carson’s brewing business took a blow during the year under review with their state-of-the art brewery in the Biyagama Investment Promotion Zone getting inundated by floods, disrupting production and causing major damage. Additionally, the industry was hit by sharply increased taxes pricing beer out of the reach of many consumers.

Four of the Malaysian oil palm plantations and one in Indonesia had been disposed during the year under review and palm oil refining operation in India was scaled down and subsequently ceased altogether. They are now in the process of disposing the assets of the business. The refining business had lost Rs. 1.1 billion in the year under review against the previous year’s loss of Rs. 0.83 billion. The Indian operation lost Rs. 0.79 billion until its cessation.

Carson’s had a stated capital of Rs. 1.1 billion, a group capital reserve of Rs. 3.2 billion and revenue reserves of Rs. 26.9 billion in its books as at March 31, 2017. Total assets stood at Rs. 156.4 billion and total liabilities at 97 billion.

Bukit Darah PLC with 45.68% is the top shareholder of Carson’s, followed by Tower Investments (10.66%) and Fulcrum (Pvt) Ltd. (9.79%). Other corporate shareholders follow with the EPF with 2.85% standing at No. 6. The Selvanathan family of Messrs. Mano and Hari Selvanathan are the beneficial controlling interest.

The directors of the company are Messrs. Tilak de Zoysa (chairman), H. Selvanathan, M. Selvanathan, I Paulraj, DCR Gunawardena, SK Shah, PCP Tissera, VP Malalasekera, Faiz Mohideen, R. Theagarajah, and Ravi Dias.

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