|
|
 |
 |
| Sunday, 22 September 2002 |
 |
|
 |
Business |  |
| News Business Features Editorial
|
Brewery and oil palm do well for Carsons Carson Cumberbatch and Co, Ltd., its subsidiaries and associates have reported a consolidated turnover of Rs. 1.07 billion for the first quarter of 2002/03, a growth of 36 per cent over the first quarter of the previous year. Consolidated profit before tax was Rs. 225.74 million, a growth of 345 per cent. Consolidated profit after tax was Rs. 224.74 million for the quarter. The core businesses of brewery, oil palm plantations and investment holding sectors, were the main contributors to revenue and profit. Within the last five years, Carsons invested heavily in expanding capacity in both the brewery and plantation sectors, and has become one of the key players in the Colombo Stock Exchange. During the last financial year, Carsons commissioned its new palm oil processing facility and completed planting its 15,000 hectare oil palm plantation in central Kalimantan, Indonesia. This operation has been successful in recording a positive return this quarter with the entire plantation coming into maturity and an increase in commercial production of processed palm oil. Sector turnover was Rs. 272.72 million and profit before tax Rs. 11.17 million for the first quarter. The recovery in palm oil price in world markets following the reduced supplies of edible oils and increased demand from the major consuming markets of India and China, further strengthened the performance of the plantation business. These prices are expected to hold for the next few months, enabling the sector to generate a reasonable return this year. Nevertheless, adverse weather conditions as well as increased field maintenance and fertilisation costs could erode these returns to some extent. The Malaysian plantations of the Group are presently undergoing a planned replanting programme to ensure competitiveness in the long run. A consolidated turnover of Rs. 604.68 million and profit before tax of Rs. 156.69 million were recorded by the Group's brewery business. A modest growth in sales was recorded, which together with the cost savings resulting from consolidation of operations at one location, translated to better performance for the quarter, when compared with the previous year. Nevertheless, low consumer purchasing power and regulatory constraints continued to affect shareholder returns. The removal of the Excise Special Provisions tax in the last budget is expected to benefit the industry in the long term. The brewery sector reduced the prices of its products with an alcohol content of less than fiver per cent by a wider margin than the actual tax reduction, while the prices of its beers with a higher alcohol content remained unchanged, in a display of its commitment to the soft liquor industry. The Lion Brewery has been a long-time advocate of a liberalised regime governing soft alcohol as a measure to combat the prevalence of illicit liquor in the country. The brewery sector has taken the position that the only way to lure consumers away from the illicit trade, is to provide them with a relatively cheaper legal product that is also widely available. In this respect, soft liquor needs to be both price competitive and easily accessible vis-a-vis illicit liquor. This requires the reduction of prohibitive excise taxes on beer and the granting of more "beer only" retail licences. The gradual recovery in the local stock market presented some opportunities for the investment sector to enhance the quality of its holdings through acquisitions to the strategic and trading portfolios. Several blue chip stakes acquired previously for trading purposes were disposed of to realise capital gains and thereby enhance shareholder returns. Continuation of the internal portfolio re-alignment exercise which commenced last year, also contributed to the liquidity and profitability of this sector. A turnover of Rs. 249.32 million and profit before tax of Rs. 139.53 million was recorded by the investment holding sector, which mainly comprises The Ceylon Guardian Investment Trust Limited and its subsidiaries. Carsons Management Services (Pvt.) Ltd., the management services provider to the Carsons Group, managed the Guardian Group portfolio. The newly formed Guardian Fund Management Company Limited continued to manage The Sri Lanka Fund. The investment management operation plans to expand the scope of this Fund to enable it to make use of the new investment opportunities that will arise with the process of economic growth, liberalisation, deregulation and privatisation. Carsons' other business interests include real estate and property management, airline representation and leisure. The real estate sector continues to earn stable returns, while its portfolio of office and warehouse complexes and land bank continues to lend strength to the asset base of the Group. Divesting from the hotels sector, which has been consistently turning in losses is being considered by the Group. The airlines business, on the other hand, is an area for which the company sees much future potential, given the expected liberalisation of the country's aviation policy. In keeping with its philosophy of investing in businesses which contribute to sustained shareholder value addition, Carsons has made a decision to explore opportunities in the infrastructure sector, as a possible diversification strategy |
|
News | Business | Features
| Editorial | Security Produced by Lake House |
