Sri Lanka's Ceylon Grain Elevators March profits up 45-pct

ECONOMYNEXT - Sri Lanka's Ceylon Grain Elevators, a feed milling firm and poultry processing group, said profits rose 45 percent in the March 2018 quarter to 243 million rupees from a year ago.

The profitability of the group increased mainly due to the improved prices for chicken meat and feed, said Primus Cheng Chih Kwong, chief executive of Ceylon Grain Elevators, which is controlled by Singapore’s Prima group.

The company reported earnings of 4.05 rupees a share in the quarter, according to interim accounts filed with the stock exchange. .

The company’s share was last traded at 70 rupees at mid-day Monday.

March 2018 sales were down two percent to 3.8 billion rupees from a year ago because of lower layer feed sales and lower exports of broiler chicks and lower demand for eggs.

Primus Cheng said group sales were impacted by the decrease in Layer Feed sales volume consequent to the lesser number of Layer birds on ground.

“Lower export revenue from Broiler Parent Stock Day Old Chicks (DOCs) and the decreased demand for Layer DOCs due to the depressed market for table eggs had further reduced group revenue,” he said.
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He said the decreased cost of production with better feed formulation had helped improve group profitability.

“The bottom line of the group could have been better if not for increase in corporate tax rate from 12% to 28%,” he said.

Sri Lanka’s TAFL March profit eroded by avian flu impact, tax hike

ECONOMYNEXT – Sri Lanka's Three Acre Farms (TAFL), a breeder farm and poultry processing firm, said net profit fell 12 percent to 166 million rupees in the March 2018 quarter from a year ago.

Production and exports were affected by an avian flu epidemic and a hike in corporate tax, it said in a stock exchange filing.

Sales rose four percent to 657 million rupees during the period.

Three Acre Farms reported earnings per share of 7.06 rupees for the March quarter. The stock was last traded at 103.80 rupees.

Chief Executive Officer Primus Cheng Chih Kwong said group profitability was adversely affected by a drop in Parent Stock Day Old Chicks (DOCs) production and export.

This was a result of import restrictions placed on Grandparent Stock DOCs caused by avian flu epidemic in the suppliers’ countries, he told shareholders.

“Moreover, the unsold Layer DOCs due to poor demand together with the increase in corporate tax rate had further narrowed the net profit margins.”

Group revenue increased during the period as a result of improved market conditions for Broiler Day Old Chicks, although the demand for Layer DOCs had been adversely affected by continued volatility in the table egg market, Primus Cheng said.

Sri Lankan shares hit 5-week closing low on fuel price hike, foreign outflows

Reuters: Sri Lankan shares ended at a near five-week low on Monday, led by industrial shares such as John Keells Holdings, while foreign outflows and the recent fuel price hike weighed on sentiment, stockbrokers said.

State-run fuel retailer Ceylon Petroleum Corp (CPC) raised retail prices for gasoline and diesel on Thursday midnight in response to the hike in oil prices, while Lanka IOC, a subsidiary of Indian Oil Corp, increased fuel rates the same day.

“The fuel price hike hit overall market sentiment. The increase could hit cost of production and services in almost all the companies. So investors expect lower profits,” said Jaliya Wijeratne, CEO, First Capital Equities.

The Colombo stock index fell for a sixth straight session and ended 0.52 percent weaker at 6,444.96, its lowest close since April 10. The index lost 0.4 percent last week, in its third straight weekly decline.

The day’s foreign selling accounted for 80 percent of the turnover, which stood at 924.4 million rupees ($5.86 million), less than this year’s daily average of 1.03 billion rupees.

Foreign investors net sold 333.2 million rupees worth of equities on Monday, extending net foreign outflow to 668.5 million rupees worth of equities so far this year.

John Keells Holdings, whose transport business is seen to be affected due to the price hike, ended 1.2 percent down, while top mobile phone operator Dialog Axiata, closed 1.4 percent lower despite posting a rise of 78.6 percent in first-quarter net profit, and Lanka IOC ended down 4.5 percent.

Garment exporter Teejay Lanka Plc accounted for 65 percent of the day’s turnover.

The market shrugged off the central bank’s policy decision on Friday as it was widely expected, brokers said.

The central bank kept its key policy rates steady, a little more than a month after it unexpectedly cut the main lending rate, forecasting a modest recovery in the economy this year after growth slumped to a 16-year low in 2017.

Analysts said the depreciation of rupee also weighed on investor sentiment as it is likely to hit profits of some listed firms that rely heavily on imports.

The rupee hit a fresh low of 158.00 per U.S. dollar on Monday on importer demand for the U.S. currency.

Analysts said concerns over political instability following President Maithripala Sirisena’s decision to suspend the parliament last month after 16 legislators from his ruling coalition defected also weighed on sentiment.

Sirisena last week urged his own coalition government and the opposition to end a power struggle in order to achieve ambitious goals including anti-corruption measures.

($1 = 157.8000 Sri Lankan rupees)

(Reporting by Shihar Aneez, Editing by Sherry Jacob-Phillips)