Finlays net profit up 187% to Rs. 413.1 m in 1H, 2006

The provisional and unaudited results of the James Finlay and Company Group for the six months ended June 30, 2006 recorded a 196% increase in operating profit compared to the corresponding period of last year, its Chairman C.L.K.P. Jayasuriya said.

He said while profits from ongoing business activities increased by 11% compared to the first six months of last year, there was a one-off profit made on the sale of shares in Eagle Insurance Company Limited, amounting to Rs. 256.9 million, which resulted in the substantial increase in profitability.

The net profit after tax increased by 187% to Rs. 413.1 million. A special dividend amounting to Rs. 255.5 million (Rs. 7.30 per share) was declared and paid on April 21, 2006.

Jayasuriya said Beverage Packing division exported 4.6 million Kgs. of tea, as against 4.0 million Kgs. exported in the first six months of last year, mainly driven by the higher volume of bulk tea exports.

Total tea export turnover grew by 8.1 %. However, there was a marginal decline in profit on exports, due to an upward trend in the auction prices of tea and a change in product mix which was higher proportion of bulk tea exports in total turnover and a lower percentage of packets and teabags.

In July, three brand new IMA C27 machines were installed with an investment of Rs. 250 million, the first company to do so in Asia. These machines produce stapleless teabags, which are entirely in consumption habits towards this type of environment friendly teabags and as the pioneer, we are well placed to cater to this emerging trend, he said.

The service related divisions showed encouraging results with higher turnover and profit during the first half of the year compared with the corresponding period of last year.

The Airline, Insurance and Environmental Services Divisions in particular have demonstrated robust growth, while operating in a challenging business environment.

Jayasuriya said temperature-controlled Warehousing and Logistics Division, which is now into its second year of operation, has recorded a satisfactory performance on the back of healthy occupancy levels, while catering to some of Sri Lanka's best known brands of frozen and chilled products.

To meet increasing demand and to meet the evident need for international standards of cold chain compliance, the company is constructing a large extension to the existing facility that will double the present capacity.

The project to be completed in the fourth quarter of 2006, will create more sellable space and deliver economies of scale through the greater operational efficiencies incorporated in the design.